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Horizon Community Bank to Combine with Arizona Federal Credit Union
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Very Positive)
Tags
Rhea-AI Summary
Horizon Community Bank has entered a definitive agreement for Arizona Federal Credit Union to acquire it in a purchase and assumption transaction. As of December 31, 2021, Horizon Community reported $539.5 million in total assets. The $91.4 million deal will enhance Arizona Federal's presence in western Arizona, adding 12,000 clients and expanding its services. The acquisition is subject to regulatory and shareholder approval and is expected to complete by the end of 2022. Post-transaction, the combined assets will exceed $3.3 billion, serving over 155,000 members.
Positive
Arizona Federal's acquisition will expand its market presence in western Arizona.
Horizon Community's 12,000 clients will gain access to a wider range of financial services.
After the merger, the combined entity will have over $3.3 billion in assets, strengthening its market position.
Negative
Horizon Bancorp and Horizon Community intend to wind down and dissolve following the acquisition.
LAKE HAVASU CITY, Ariz.--(BUSINESS WIRE)--
Today Horizon Community Bank (“Horizon Community”), an Arizona state-chartered bank headquartered in Lake Havasu City, Arizona and wholly-owned subsidiary of Horizon Bancorp, Inc. (OTC: HRRB) (“Horizon Bancorp”), announced that it has entered into a definitive agreement for Arizona Federal Credit Union (“Arizona Federal”) to acquire Horizon Community pursuant to a purchase and assumption transaction. Horizon Community was founded in 2002 and currently operates six branches in Fort Mohave, Kingman, Lake Havasu City, Mesa, Parker and Quartzsite, Arizona. As of December 31, 2021, Horizon Community reported $539.5 million in total assets, $259.9 million in total loans, $471.7 million in total deposits and $43.4 million in total equity.
Arizona Federal, a $2.8 billion member-owned financial cooperative, will benefit by expanding into new market areas in western Arizona, further diversifying its assets, and adding talent and expertise. The acquisition will also help the credit union continue investments in new products and services and help fund the expansion of services to additional new markets throughout Arizona.
The 12,000 clients of Horizon Community will benefit by gaining access to Arizona Federal’s full suite of financial services, including consumer loans, insurance, credit cards, investments, small business services, SBA and commercial loans, and more.
After successfully acquiring and integrating the operations of Pinnacle Bank in 2019, Arizona Federal’s board of directors endorsed acquisition opportunities as a component of the credit union’s future growth strategy. “We believe that quality growth and diversification is essential to continued success in our industry, and we intend to achieve it both organically and through mergers or acquisitions,” explained Ronald L. Westad, President and CEO of Arizona Federal.
That strategy aligned well with Horizon Community as they explored future options for their organization. “Arizona Federal has demonstrated their competency and commitment to community banking and they will be a great partner for our bank,” said Ralph Tapscott, President and CEO of Horizon Community. “I’m excited for Horizon employees to join together with Arizona Federal employees to bring additional financial services and resources to the communities we serve,” he added.
The credit union is committed to keeping and operating each of the existing Horizon Community branches. “We’re excited to welcome Horizon Community Bank clients as new members,” Westad added. “We believe this will create significant long-term value for all stakeholders.”
The transaction, which is subject to regulatory and shareholder approval, has been approved by the Boards of Directors of both institutions and is expected to be completed by the end of 2022.
After the completion of the proposed transaction, the combined organization will have more than $3.3 billion in assets and serve over 155,000 members at 21 locations throughout Arizona. Deposits of Arizona Federal will continue to be federally insured by the National Credit Union Administration.
Subject to the terms and conditions of the definitive agreement, Arizona Federal will acquire substantially all of the assets and assume substantially all of the liabilities of Horizon Community for cash consideration of $91.4 million, subject to certain adjustments. Following the purchase and assumption transaction, Horizon Bancorp and Horizon Community intend to wind down and dissolve. Based on Horizon Bancorp’s outstanding shares on a fully-diluted basis as of December 31, 2021, and after taking into consideration the anticipated satisfaction of certain obligations of Horizon Bancorp and Horizon Community excluded from the purchase and assumption transaction, including holding company indebtedness and tax liabilities, Horizon Bancorp expects that its shareholders would be entitled to receive approximately $18.91 per share upon liquidation, subject to certain adjustments. Arizona Federal has also agreed to cover a portion of Horizon Community’s expected federal income tax liability associated with the sale of its assets in the transaction.
Arizona Federal was advised by Honigman LLP, as legal counsel, and McQueen Financial, as financial advisor. Horizon Community was advised by Fenimore Kay Harrison LLP, as legal counsel, and Hovde Group, LLC, as financial advisor.
About Arizona Federal Credit Union
Arizona Federal is a $2.8 billion not-for-profit, local cooperative providing financial services and expertise to more than 145,000 member/owners. Founded in 1936, the credit union empowers members to take hold of their financial future through the delivery of leading-edge self-service tools and mobile apps, competitive rates on loans and deposits, robust home loan solutions, identity protection services and SBA and commercial loans. Arizona Federal has a history of local community involvement and is the sponsor of the Live Nation Theatre venue and exclusive credit union partner of the Phoenix Rising FC. The credit union has 14 locations in the Phoenix area and is part of the CO-OP network that gives members nationwide account access at 5,000 credit union branches and 30,000 ATMs. Deposits are federally insured by the National Credit Union Administration.
Horizon Bancorp, Inc. (OTC: HRRB), the holding company for Horizon Community Bank, has $539.5 million in total assets as of December 31, 2021 and is headquartered in Lake Havasu City, Arizona. It owns, as its sole subsidiary, Horizon Community Bank, a locally owned and operated bank with branches in Fort Mohave, Kingman, Lake Havasu City, Mesa, Parker and Quartzsite, Arizona, plus loan offices in Goodyear and Phoenix, Arizona. The Bank has 90 employees that provide high-touch, customized financial services to largely small business and commercial clients. The Bank operates a mortgage operation and is a leader in government guaranteed lending. Consumer services are also offered in the communities the bank serves. FDIC insured.
Certain statements contained in this press release may be considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors – many of which are beyond the control of Horizon Bancorp – could cause actual conditions, events or results to differ materially from those anticipated, discussed, projected, expressed or implied by forward-looking statements. We caution you not to place undue reliance on the forward-looking statements contained in this press release. Factors that could cause actual results to differ materially from the expectations of Horizon Bancorp and Horizon Community include the nature and amount of the liabilities remaining at Horizon Bancorp and Horizon Community following the proposed transaction, including material federal income tax liabilities, the results of any litigation involving Horizon Bancorp and Horizon Community, and the amount of costs and expenses associated with liquidating Horizon Bancorp and Horizon Community, all of which must be satisfied or provided for before Horizon Bancorp may distribute its residual assets to its shareholders. Forward-looking statements speak only as of the date they are made. Horizon Bancorp and Horizon Community do not undertake any obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.
What is the acquisition deal between Horizon Community and Arizona Federal?
Horizon Community Bank is being acquired by Arizona Federal Credit Union in a purchase and assumption transaction valued at $91.4 million, subject to approval.
How will the acquisition impact Horizon Community's clients?
Horizon Community's 12,000 clients will have access to Arizona Federal's extensive suite of financial services post-acquisition.
When is the acquisition of Horizon Community expected to be completed?
The acquisition is expected to be completed by the end of 2022, pending regulatory and shareholder approval.
What are the financial implications for Horizon Bancorp shareholders after the acquisition?
Horizon Bancorp expects its shareholders to receive approximately $18.91 per share upon liquidation after the acquisition.
