NEW YORK, NY and DEARBORN, MI, October 8, 2024 – Grasshopper Bancorp, Inc. (“Grasshopper” or the “Company”) and Auto Club Trust, FSB (“Auto Club Trust”) today announced that they entered into a definitive merger agreement pursuant to which the Company’s banking subsidiary, Grasshopper Bank, N.A. (“Grasshopper Bank”), will acquire Auto Club Trust in a cash and stock transaction. The transaction has been unanimously approved by the boards of directors of each company and, subject to customary closing conditions, including regulatory approval, is expected to close in the first half of 2025.
With total assets of approximately $495 million, Auto Club Trust is a federally chartered savings bank headquartered in Dearborn, Michigan. Auto Club Trust is a subsidiary of The Auto Club Group (“ACG”) – the second largest AAA Club in North America – and its property-casualty insurance affiliate, Auto Club Insurance Association. Together they provide a broad range of membership, property and casualty insurance, life insurance, and financial services offerings to ACG’s more than 13 million AAA members and insureds in ACG’s 14 state-territory.
Grasshopper Bank, with approximately $835 million in total assets, is a digital bank built to serve the business and innovation economy. It has a long history of leveraging technology to provide clients with a frictionless banking experience, both directly and through white label offerings via its embedded finance platform. Once the transaction is finalized, Grasshopper Bank will be the exclusive bank powering depository and certain lending offerings to AAA members in ACG’s 14 state-territory. This will represent an expansion of Grasshopper Bank’s consumer and business banking affinity program offering, and Grasshopper Bank will continue to operate its other business lines and serve its current client segments.
“This transaction brings together Grasshopper Bank’s premier digital platform with Auto Club Trust, a bank known for providing AAA members in the ACG territory with a great experience across a myriad of offerings,” said Michael Butler, Grasshopper and Grasshopper Bank’s Chairman and Chief Executive Officer. “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.”
“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,” said Joseph J. Richardson, President & CEO, The Auto Club Group.
Transaction Highlights
- Creates a high-performing financial institution with approximately $1.4 billion in assets.
- Establishes Grasshopper Bank as the exclusive provider of certain depository and lending
- services to over 13 million AAA members solely in the ACG territory.
- As part of the transaction, Grasshopper will raise approximately $35 million in new equity and ACG will be issued a 4.9% ownership stake in Grasshopper.
- Results in 48.5% accretion to Grasshopper’s tangible book value at close.
Squire Patton Boggs (US) LLP served 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, served as financial advisor to The Auto Club Group and Auto Club Trust.
About Grasshopper Bank
With total assets of approximately $835 million, Grasshopper Bank is a client-first digital bank serving the business and innovation economy. Grasshopper Bank replaces the traditional one-size-fits-all approach to banking with a suite of products and services tailored to specific industries and a passionate team of experts with deep expertise in their fields. Grasshopper Bank’s banking solutions cover small businesses, startups, venture capital and private equity firms, fintech-focused Banking-as-a-Service (BaaS) and commercial API banking platforms, SBA lending, and commercial real estate lending. Headquartered in New York, New York, the bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For more information, visit Grasshopper Bank’s website at www.grasshopper.bank or follow Grasshopper Bank on LinkedIn or X.
About Auto Club Trust
Auto Club Trust is a federally chartered savings bank headquartered in Dearborn, Michigan. It is a subsidiary of ACG and its property-casualty insurance affiliate, Auto Club Insurance Association. ACG is the second largest AAA club in North America. ACG and its affiliates provide membership, travel, insurance and financial services offerings to more than 13 million AAA members across its territory, which includes: Colorado, Florida, Georgia, Iowa, Michigan, Nebraska, North Carolina, North Dakota, South Carolina, Tennessee and Wisconsin and parts of Indiana, Illinois and Minnesota. ACG belongs to the national AAA federation with more than 57 million members in the United States, whose mission includes protecting and advancing freedom of mobility and improving traffic safety.
