First Merchants Announces Merger

Posted: Updated:

Muncie-based First Merchants Corp. (Nasdaq: FRME) is merging with an Ohio bank. The $14.5 million deal for C Financial Corp. will result in a combined operation with more than 100 offices in Indiana, Ohio and Illinois.

January 6, 2014

News Release

Muncie, Ind. and Columbus, Ohio -- First Merchants Corporation (NASDAQ: FRME) and C Financial Corporation announced they have executed a definitive merger agreement whereby C Financial Corporation will merge with and into First Merchants Corporation, and its wholly owned bank subsidiary, Cooper State Bank, will merge with and into First Merchants Bank, N.A.

The merger agreement provides that the shareholders of C Financial Corporation will receive $14.5 million in cash or approximately 1.8x tangible book value. The transaction is expected to be completed in the second quarter of 2015 subject to the approval of C Financial Corporation shareholders, regulatory approvals and other customary closing conditions. The combined financial institution expects to complete the integration during the third quarter of 2015.

Based upon current financials, C Financial Corporation and First Merchants will have combined assets of $6.0 billion and will remain the second largest financial holding company headquartered in Indiana. The combined company will have 112 banking offices in twenty-six Indiana counties, as well as two counties in both Ohio and Illinois.

Michael C. Rechin, President and Chief Executive Officer of First Merchants, said, "First Merchants is excited to extend our presence in Columbus with the addition of Cooper State Bank as the newest member of the First Merchants family. The addition of Cooper State Bank supports our growth initiative, making the company more visible and impactful in Columbus, one of the fastest growing cities in America. From Cooper State Bank's beginning in 2005, Dan Apple and his management team have played a pivotal role in providing real estate financing and bringing innovative retail banking ideas to Columbus consumers while maintaining excellent credit quality."

Under the leadership of Jennifer M. Griffith, First Merchants currently operates Commerce National Bank ("Commerce") in the Columbus, Ohio, marketplace. Commerce began doing business in 1991 and currently has approximately $500 million in loans extended to central Ohio clients. Commerce merged with and into First Merchants in 2003.

Ms. Griffith, President of Commerce National Bank, stated, "This is a tremendous opportunity to join great teams in vibrant neighborhoods. The addition of the six Cooper State Bank banking centers will provide added convenience for our clients. I look forward to working with Dan to bring the best of Commercial Banking and Retail Banking to the Columbus market place."

Dan Apple, President and CEO of Cooper State Bank, stated, "We are looking forward to the opportunity to become a part of the First Merchants family, and believe this partnership will be good for our clients, shareholders, staff and communities. Since our inception 10 years ago, our management team has been driven to be the retail bank of choice in our marketplace. We look forward to taking advantage of the new service offerings and enhanced lending capacity of Commerce and First Merchants while continuing to build momentum with our clients."

First Merchants expects the acquisition to be accretive to earnings during the first full year with a tangible book value earn back in less than four years. Cost savings are expected to total 30 percent. The credit and interest rate marks related to the proposed merger are estimated at $2.8 million, or 2.5 percent.

First Merchants' legal advisor was Bingham Greenebaum Doll LLP and C Financial Corporation's legal advisor was Kaplan, Strangis and Kaplan, P.A.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, Commerce National Bank, and First Merchants Trust Company as divisions of First Merchants Bank, N.A. First Merchants Corporation also operates First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.

Source: First Merchants Corp.