MutualFirst Financial in Muncie, Ind., has agreed to buy Universal Bancorp in Bloomfield, Ind.

The $1.6 billion-asset MutualFirst said in a press release Wednesday that it will pay $65.6 million in cash and stock for the $400 million-asset parent of BloomBank. The deal is expected to close in the first quarter.

MutualFirst said it expects the deal to be accretive to its 2018 earnings per share. It should take about 2.2 years to earn back the deal’s expected 3.1% dilution to MutualFirst’s tangible book value. MutualFirst plans to cut BloomBank’s annual noninterest expense by 25%.

"Merging with Universal is a very beneficial transaction that will enable us to increase the value of the franchise for the benefit of our shareholders,” Dave Heeter, MutualFirst’s president and CEO, said in the release. “We will continue to pursue all strategies available to maintain and improve financial performance in order to maximize shareholder value."

Keefe, Bruyette & Woods and Silver, Freedman, Taff & Tiernan advised MutualFirst. Boenning & Scattergood and SmithAmundsen advised Universal.

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