Horizon Bancorp in Michigan City, Ind., has agreed to buy LaPorte Bancorp in LaPorte, Ind.
The $2.7 billion-asset Horizon said in a press release Thursday that it will pay $94.1 million in cash and stock for the $543 million-asset LaPorte. The deal, which is expected to close in the third quarter, values LaPorte as 122% of its tangible book value.
Horizon said in supplemental materials that it expects the deal to be 5% accretive to earnings per share in 2017. It should take about 2.6 years to earn back the deal’s dilution to Horizon’s tangible book value. Horizon also said it expects to incur about $7.9 million in merger-related charges, though it should be able to cut LaPorte’s expense base by 55%, with most of those cuts coming this year.
LaPorte has about $129 million in mortgage warehouse loans. Horizon said it plans to keep about $50 million of those loans, with plans to invest the balance in securities. Horizon said the moves will likely cost it about $2.5 million in annual revenue.
Horizon said it will close three LaPorte branches, in the Indiana cities of Michigan City, Chesterton and LaPorte, after completing the acquisition. Horizon will also close LaPorte's loan production office in St. Joseph, Mich.
LaPorte's chief financial officer, Michele Thompson, will join Horizon's board.
LaPorte Savings Bank, formed in 1871, has seven branches in northwest Indiana. LaPorte completed a second-step conversion from a mutual thrift to a stock-owned bank in October 2012.
The deal is Horizon’s second acquisition since February, when it announced plans to buy Kosciusko Financial in Mentone, Ind.
Stephens Inc. and Barnes & Thornburg advised Horizon. Raymond James and Luse Gorman advised LaPorte.
Paul Davis contributed to this article.