Grasshopper Bancorp, Inc. and Auto Club Trust, FSB have announced a definitive merger agreement, under which Grasshopper Bank, N.A., a subsidiary of Grasshopper, will acquire Auto Club Trust. This cash and stock transaction has been unanimously approved by both companies’ boards and is expected to close in the first half of 2025, pending regulatory approvals and customary closing conditions.
The merger brings together Grasshopper Bank’s advanced digital platform and Auto Club Trust’s offerings, which cater to AAA members within The Auto Club Group’s (ACG) 14-state territory. Michael Butler, Chairman and CEO of Grasshopper, noted, “This transaction combines our digital banking expertise with Auto Club Trust’s strong customer experience, offering a myriad of financial services to AAA members.”
Auto Club Trust, a federally chartered savings bank headquartered in Dearborn, Michigan, is a subsidiary of ACG, the second-largest AAA Club in North America, and its property-casualty insurance affiliate. Auto Club Trust has approximately $495 million in assets, providing financial services to over 13 million AAA members across its territory.
Grasshopper Bank, with $835 million in assets, is a digital bank serving the business and innovation economy. Following the merger, Grasshopper Bank will become the exclusive provider of depository and lending services to AAA members in ACG’s region, expanding its consumer and business banking offerings.
Joseph J. Richardson, President & CEO of The Auto Club Group, stated, “This merger enables ACG to continue offering robust banking products to our members while benefiting from Grasshopper’s digital banking capabilities.”
Transaction Highlights:
– Combined institution will have approximately $1.4 billion in assets.
– Grasshopper Bank will serve over 13 million AAA members in ACG’s territory with exclusive depository and lending services.
– Grasshopper will raise $35 million in new equity, and ACG will receive a 4.9% ownership stake in Grasshopper.
– Transaction is expected to result in 48.5% accretion to Grasshopper’s tangible book value at close.
Squire Patton Boggs (US) LLP acted as legal advisor, and MJC Partners, LLC served as financial advisor to Grasshopper and Grasshopper Bank. Nelson Mullins Riley & Scarborough LLP served as legal advisor, and Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to The Auto Club Group and Auto Club Trust.
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