Michigan City bank buying Auburn-based Peoples Bancorp

Established 90 years ago and based in Auburn, Peoples operates 16 branches of Peoples Federal Savings Bank in northeast Indiana and southwest Michigan. It had total assets of $486.6 million as of Dec. 31, 2014.

Horizon Bancorp is more than four times as large as Peoples, with total assets of $2.1 billion at the end of last year. Its owns Horizon Bank, which dates back to 1873 and operates 31 offices in northern and central Indiana and southwest and central Michigan.

Northeast Indiana offices of Peoples Federal Savings Bank are in Auburn, Avilla, Columbia City, Garrett, Howe, Kendallville, LaGrange, Middlebury, Topeka, Waterloo and Woodburn.

A news release said Horizon Bancorp would pay approximately $73.1 million to acquire Peoples Bancorp, which has stockholder equity of $61.3 million.

Under the terms of the merger, shareholders of Peoples will receive 0.95 share of Horizon common stock and $9.75 in cash for each share of Peoples’ common stock. Horizon common stock had a closing price of $23.02 Wednesday.

Shares of Peoples Bancorp rose by 16.7 percent to $30.34 in Thursday’s trading after news of the merger.

The companies said the transaction is expected to be completed in the third quarter of 2015, subject to approval by federal and state regulatory authorities and the shareholders of both banks.

The merger agreement also provides that Peoples Federal Savings Bank will be merged into Horizon Bank. Maurice F. Winkler III, president and chief executive officer of Peoples, will be appointed to serve on the board of directors of Horizon and Horizon Bank.

“We are excited to become part of the Horizon Bank family and the increased opportunities this provides our customers and community,” Winkler said in a news release. “Horizon’s demonstrated commitment to preserve true community banking, which means local decision-making, community involvement and personal one-on-one service, will be keys to our joint and future success.”

“We are enthusiastic about this merger, which is consistent with Horizon’s philosophy of partnering with banks that hold core values similar to ours and a commitment to serving their local communities,” Horizon CEO Craig M. Dwight said in the news release.

“Peoples Federal Savings Bank was founded with the goal of helping people purchase the home of their dreams, which complements Horizon’s robust retail mortgage business,” Dwight said. “Horizon will add value to Peoples’ customer base through our customer service guarantees and extensive product menu. In addition, Peoples’ agricultural, business banking and wealth management services align well with Horizon’s primary revenue streams.”