Grasshopper Bancorp is set to acquire Auto Club Trust through a cash and stock transaction, a move that has been unanimously approved by the boards of directors from both companies. The deal, which is subject to regulatory approval and customary closing conditions, is anticipated to be finalized in the first half of 2025.
This strategic acquisition will combine Grasshopper Bank’s expertise in digital banking with Auto Club Trust’s established marketing strengths. The merger will not only expand the range of products and services offered to their growing client base but will also enhance the overall customer experience. Both institutions will remain committed to addressing the evolving needs of their customers while ensuring compliance with industry regulations and laws.
Upon closing, Grasshopper Bank will exclusively power the depository and certain lending services for AAA members across a 14-state territory under the Auto Club Group (ACG). This partnership marks a significant expansion of Grasshopper Bank’s customer base and its business banking affinity program offerings. The bank will continue to operate its existing business lines while serving its current clients.
Key highlights of the transaction include the creation of a robust financial institution with approximately USD 1.4 billion in assets. The merger is expected to deliver a 48.5% accretion to Grasshopper Bancorp’s tangible book value at closing. Additionally, Grasshopper Bank plans to raise around USD 35 million in new equity, and ACG will receive a 4.9% ownership stake in the bank.
This merger aims to strengthen both organizations, creating new opportunities for growth while prioritizing customer satisfaction and regulatory compliance.
“We look forward to adding Grasshopper Bank’s award-winning digital banking experience to Auto Club Trust’s existing marketing strategy while expanding the consumer and business products provided to this community over time,” Grasshopper and Grasshopper Bank Chairman and CEO Michael Butler said in the release.
“This merger will allow ACG to continue offering banking products to our members while leveraging Grasshopper’s capabilities and resources to grow the reach of our financial services,” The Auto Club Group President and CEO Joseph J. Richardson said in the release.
—————————————————————————————————
About Innovation Streets:
Welcome to InnovationStreets.com! Get the latest insights from the finance and technology industries. Discover industry updates on fintech innovations, regulatory developments, industry insights, events, and collaborations between banks, insurers, and fintechs. A platform for C-level executives to submit thought leadership content for their peers. Subscribe for updates!