Old National Continues Indiana ExpansionPosted: Updated:
The chief executive officer of Evansville-based Old National Bancorp. (Nasdaq: ONB) says the more than $100 million acquisition of Fort Wayne-based Tower Financial Corp. (Nasdaq: TOFC) "dramatically expands" the Evansville bank's footprint. Bob Jones tells Inside INdiana Business more growth could be on the way for the largest bank headquartered in the state. He says Old National remains committed to Indiana, but is also exploring possibilities in Michigan and Kentucky. In July, Old National completed the acquisition of two dozen Bank of America branches.
September 10, 2013
EVANSVILLE, Ind. and FORT WAYNE, Ind. - Evansville-based Old National Bancorp (NASDAQ: ONB) and Fort Wayne-based Tower Financial Corporation (NASDAQ: TOFC), jointly announced today the execution of a definitive agreement under which Old National will acquire Tower Financial Corporation through a stock and cash merger.
With nearly $680.9 million in total assets, and an additional $523.3 million in trust assets under management, Tower Financial Corporation is an Indiana bank holding company with Tower Bank & Trust Company (Tower Bank) as its wholly-owned subsidiary. Tower Bank currently operates six full-service banking centers in Fort Wayne and one in Warsaw, Ind., with total deposits of $581.6 million and $438.6 million in loans. Tower Bank is the largest independent bank headquartered in Fort Wayne, Ind.
Founded in Evansville in 1834, with $9.6 billion in assets and 176 branches, Old National is the largest financial services holding company headquartered in Indiana. This acquisition will strengthen Old National's position to the third largest deposit holder in Indiana. Old National also has branches in Southern Illinois, Western Kentucky and Louisville, and Southwestern Michigan.
"We are absolutely thrilled about this partnership, which dramatically expands Old National's presence in the attractive Fort Wayne market, and which will continue and strengthen Tower's community banking commitment, while helping to solidify our standing as Indiana's bank," said Old National Bancorp President & CEO Bob Jones. "Tower Bank has a well-earned reputation for excellence, as demonstrated by their recent Best Places to Work in Indiana designation, as well as a history of delivering outstanding client service. Tower clients will benefit from the additional services provided by working with a larger community bank, while continuing to receive continued excellent local service from the people they are accustomed to working with. We look forward to the opportunity to continue this legacy while earning the trust and continued business of Tower clients."
Michael Cahill, Tower Financial Corporation President and CEO, added: "Tower is excited to be able to expand its abilities to meet the needs of our team members, customers, community, and shareholders through our partnership with Indiana's largest financial institution. The fact that Old National was founded almost 180 years ago, along with its commitment to our state and our region, and its high level of business ethics, community banking and active community involvement made it the right partner for Tower. We have had the opportunity to get to know Bob Jones and his excellent team over many years. We have similar missions and share many of the same corporate values. Our Tower team looks forward to becoming a key part of the Old National organization and continuing our role in our local market."
Under the terms of the merger agreement, which was unanimously approved by the boards of both companies, shareholders of Tower Financial Corporation will receive 1.20 shares of Old National Bancorp common stock and $6.75 in cash (fixed) for each share of Tower Financial common stock. Based upon the September 5, 2013, closing price of $13.52 per share of Old National common stock, the transaction is valued at approximately $107.7 million. The transaction value is likely to change due to fluctuations in the price of Old National common stock. As provided in the merger agreement, the exchange ratio is subject to adjustment (calculated prior to closing) in the event shareholders' equity of Tower Financial Corporation is below a specified amount.
The transaction is expected to close in the first quarter of 2014. The transaction remains subject to approval by federal and state regulatory authorities and Tower Financial Corporation shareholders as well as the satisfaction of other closing conditions provided in the merger agreement. The merger agreement also provides that Tower Bank, the bank subsidiary of Tower Financial Corporation, will be merged into Old National Bank, the bank subsidiary of Old National Bancorp.
Old National was advised by Sandler O'Neill + Partners, L.P. and the law firm of Krieg DeVault LLP. Tower was advised by Keefe, Bruyette & Woods, Inc. and the law firm of Barrett & McNagy LLP.
About Old National
Old National Bancorp (NASDAQ: ONB) is the largest financial services holding company headquartered in Indiana. With $9.6 billion in assets, it ranks among the top 100 banking companies in the United States. Since its founding in Evansville, Ind., in 1834, Old National has focused on community banking by building long-term, highly valued partnerships with its clients. Today, Old National's footprint includes Indiana, Western Kentucky and Louisville, Southern Illinois and Southwestern Michigan. In addition to providing extensive services in retail and commercial banking, wealth management, investments and brokerage, Old National owns Old National Insurance, one of the 100 largest brokers in the nation. For more information and financial data, please visit Investor Relations at oldnational.com.
About Tower Financial Corporation
Headquartered in Fort Wayne, Indiana, Tower Financial Corporation is a financial services holding company with one subsidiary; Tower Bank & Trust Company (Tower Bank), a community bank headquartered in Fort Wayne. Tower Bank provides a wide variety of financial services to businesses and consumers through its six full-service financial centers in Fort Wayne, and one in Warsaw, Indiana. Tower Bank has a wholly-owned subsidiary, Tower Trust Company, which is a state-chartered wealth services firm doing business as Tower Private Advisors. Tower Bank also markets under the HSA Authority brand, which provides Health Savings Accounts to clients in 50 states. Tower Financial Corporation's common stock is listed on the NASDAQ Global Market under the symbol "TOFC." For further information, visit Tower's web site at towerbank.net.
Source: Old National Bancorp, Tower Financial Corp.