CRAWFORDVILLE, Ind. - Union Community Bancorp announced Tuesday that it has a deal to buy hometown rival Montgomery Financial Corp. for $18.5 million in cash and stock.
Montgomery's subsidiary, Montgomery Savings, would be merged into Union Federal Savings and Loan, the lead subsidiary of $127 million-asset Union Community Bancorp. The post-merger company would have about $270 million of assets and would be the only banking institution headquartered in Crawfordville.
Montgomery, founded in 1888, and Union, founded in 1913, have two offices each, and they will eventually be consolidated, said Joseph E. Timmons, Union Community's chief executive officer. Three Montgomery directors are to be added to Union's seven-member board of directors, and Montgomery's CEO, J. Lee Walden, is to become Union's chief financial officer.
The deal lets Montgomery shareholders choose between getting 1.1244 share of Union common stock, based on its Monday closing price of $15.18, or $15 cash for each share they own. The deal is expected to close in the fourth quarter.