Heartland And German American Bancorp: A Sensible Merger, But Not My Taste
- The merger between German American Bancorp and Heartland BancCorp aims to capture operating synergies and expand German American Bancorp's presence in Ohio, particularly Columbus.
- Despite potential synergies and growth, the combined entity's valuation appears high, trading at a forward P/E multiple of 15.4 and a price to tangible book value of 2.94.
- Heartland's a solid little business, but the price of the combined company looks awfully high, even in light of potential performance improvements.
- Given the high valuation and mixed financial outlook, I recommend a 'hold' rating for both German American Bancorp and Heartland at this time.
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It has been a busy time for the banking industry. I have seen multiple instances now of consolidation between companies, often involving relatively small players in the market. This makes sense. The last couple of years have been a trying time for
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