Horizon Bancorp bulking up in Michigan with branch deal

The $6 billion-asset Horizon Bancorp will expand in 11 counties across Michigan as part of a deal to acquire 14 branches from Huntington Bancshares in Columbus, Ohio.

Huntington is shedding the branches as part an agreement to divest certain locations to comply with U.S. Department of Justice antitrust concerns in connection with its acquisition of TCF Financial in Detroit. Such branch divestitures are common requirements in deals involving two large banks with overlapping footprints.

Horizon Bancorp will nearly double its number of branches in Michigan when it completes the purchase of the TCF Bank branches Huntington Bancshares is divesting.

Huntington said Tuesday after markets closed that it had secured all regulatory approvals to close the TCF deal during the second quarter as planned. The transaction is expected around June 9, Huntington said.
The $126 billion-asset Huntington announced the $6 billion, all-stock acquisition in December 2020. After closing, Huntington will have about $170 billion of assets and a national lending footprint, though its branches will be concentrated in the Midwest.

The branches Huntington is divesting are all currently TCF branches and Horizon, in Michigan City, Indiana, has agreed to pay $17.1 million for them. The deal will boost Horizon’s total branch count to 88, with 59 in Indiana and 29 in Michigan.

It picks up $976 million in deposits — about 20% of its current funding base. Horizon agreed to pay a 1.75% premium on deposits acquired.

The buyer also gains $278 million in loans, or 8% of its current total, across central and northern Michigan. The acquired loans include residential mortgages and small business loans.

Horizon projected the deal would be 17% accretive to 2022 earnings per share. Horizon estimated it would need two years to earn back 5% tangible book value dilution.

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