The all-digital
On Tuesday, the New York City-based Grasshopper, which has $835 million of assets, said it had entered a definitive merger agreement to acquire Auto Club Trust in a cash-and-stock transaction. Auto Club Trust, which is based in Dearborn, Michigan, and has $495 million of assets, is a federally chartered savings bank and a subsidiary of the Auto Club Group, a North American AAA club.
Grasshopper specializes in banking for small businesses, startups, venture capital and private equity; Small Business Administration and commercial real estate lending; and banking-as-a-service.
The transaction was unanimously approved by the boards of directors of each company and, assuming regulatory authorization, is expected to close in the first half of 2025. It will bump Grasshopper's asset size to $1.4 billion and afford the bank a potential audience of more than 13 million AAA members in the 14 states ACG covers. Grasshopper will raise about $35 million in new equity as part of the transaction, and ACG will be issued a 4.9% ownership stake in Grasshopper.
"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," said
ACG President and CEO Joseph Richardson said the merger would let his company continue to offer banking products but with greater reach.
Grasshopper
