IONIA, Mich. - Independent Bank Corp. has announced an agreement to buy Mepco Insurance Premium Financing Inc. of Chicago.
Mepco is a 40-year-old company that specializes in financing insurance premiums and automobile warranty contracts, the banking company said Tuesday. Mepco lends throughout the United States but predominantly in Illinois and California.
Under the terms of the definitive agreement, Independent Bank is to pay Mepco shareholders $10 million initially, plus a five-year earn-out and an additional amount based upon Mepco's receipt of funds, if any, from current litigation. Everything will be paid as 50% cash and 50% Independent Bank common stock.
Mepco had assets of about $96 million at Dec. 31 and finance receivables of about $89 million. Independent Bank said it expects 2% to 3% accretion in earnings per share this year from the deal, which is expected to close in April.
Independent Bank is the latest bank to get into insurance premium financing. In December BB&T Corp. announced an agreement to buy Southeastern Fidelity Corp. of Tallahassee, Fla., and plans to combine it with an existing premium financing subsidiary, Prime Rate Premium Finance Corp. in Florence, S.C. The deal was scheduled to close in the first quarter.
In addition Webster Financial Corp. in Waterbury, Conn., bought Budget Installment Corp., a Rockville Centre, N.Y., premium finance company, in January.
