Northwest Bancshares Inc., Warren, Pa., will acquire MutualFirst Financial, Muncie, Ind., the holding company parent of Mutual Bank.
The acquisition will hand Northwest an additional $2.1 billion in total assets, $1.6 billion in total deposits, $1.5 billion in loans, and 39 new banking locations in Indiana and Michigan.
When the transaction is consummated, the combination of the two banking companies will leave the Pennsylvania-based bank with approximately $12.7 billion in assets, $10.3 billion in deposits and a total of 221 branch locations in four states.
“Indiana is an attractive market with a business-friendly environment which we have targeted as part of our Mid-Atlantic and Midwest expansion plans,” said Ronald Seiffert, president and CEO of Northwest. “Maintaining MutualFirst’s executive management team and the presence of similar cultures allows us to consistently serve the customer base with little to no disruption.”
“We are very excited about joining the Northwest team,” said David Heeter, president and CEO of MutualFirst, who will be named regional CEO and market leader for Northwests Indiana franchise.
“MutualFirst represents a unique and sizable opportunity that is highly accretive to both Northwest’s franchise value and shareholder value. Northwest will maintain a robust capital position following the merger, giving the combined company significant capital to pursue future acquisitions, pay attractive dividends and continue to grow organically, all of which enhance shareholder value,” Seiffert said.
The merger agreement was unanimously approved by both company boards. The banks concluded that shareholders of MutualFirst will be entitled to 2.4 shares of Northwest common stock for each common share of MutualFirst. The deal is valued at $346 million, or $39.89 per share.
The expansion will immediately grow Northwest’s earnings per share, excluding merger costs, and increases its stand-alone earnings per share by more than 10 percent on a run-rate basis.
“We believe MutualBank’s customers and employees will embrace Northwest’s culture and values and appreciate the additional products and services of a larger community bank which should also create additional growth potential,” Sieffert said.