Fort Wayne-based Independent Alliance Banks Inc. has announced the acquisition of a bank headquartered in Marshall County. The deal for First State Bank of Bourbon is valued at $18.3 million and is expected to close early next year. October 10, 2014

News Release

FORT WAYNE, Ind. and BOURBON, Ind. (October 9, 2014) – Independent Alliance Banks, Inc. (OTCQB: IALB) (IAB), the holding company of iAB Financial Bank, and First State Bank of Bourbon (FSB) jointly announced today the execution of a definitive agreement under which IAB will acquire FSB through a cash transaction. Upon completion of the transaction, FSB will be merged into iAB Financial Bank.

The acquisition's strategic highlights include:

-Strengthening of iAB Financial Bank’s commitment to community banking;

-Enhancing FSB's product and service capabilities;

-Serving customers from the convenience of 17 banking centers with FSB's two locations in Bourbon, Indiana;

-Growing total assets to over $1 billion, total deposits to $823 million and total loans to $704 million; and

-Allowing iAB to expand its wealth management, agribusiness and mortgage lending business in new markets in northern Indiana.

First State Bank of Bourbon, which has assets of over $86 million, is a privately-held, community-focused organization serving Marshall County with a legacy of service that dates back to 1884.

Independent Alliance Banks, Inc., established in 2005 through the merger of the holding companies of Grabill Bank and MarkleBank, is a financial services holding company for iAB Financial Bank. iAB Financial Bank, one of the largest locally-owned banks serving the Allen, Huntington and Wells counties for nearly 70 years, employs approximately 285 people.

“We are excited about this partnership, which expands iAB Financial Bank's presence into Marshall County, because it allows us to further demonstrate iAB's commitment to community banking and to enhance the product and service capabilities available to First State Bank's customers,” stated Michael C. Marhenke, President and CEO of iAB Financial Bank.

“First State Bank has a solid reputation for performance as well as a history of delivering outstanding customer service. Their customers will benefit from additional services that can be provided by partnering with a larger community bank, while continuing to receive 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 First State Bank customers.”

Ralph Mason, First State Bank President and CEO, added “We are excited to be able to expand our abilities to meet the ever-changing needs of our employees, customers, community, and shareholders through our association with iAB. The fact that they were founded almost 70 years ago as a local, community bank, along with their commitment to our region, their corporate culture and active community involvement make it the right partner for First State Bank. We share many of the same corporate values, and our team looks forward to becoming a key part of the iAB Financial Bank organization and continuing our role in our local market.”

Under the terms of the merger agreement, FSB shareholders will receive $18,347 for each share of common stock, subject to changes in shareholders' equity through the closing date and possible adjustments for specified contingencies. The transaction is valued at $18.347 million based upon FSB's shareholder equity at June 30, 2014, which represents 114 percent of book value and 29.0 times LTM earnings. IAB expects the transaction to be accretive to earnings in the first full year of combined operations.

The transaction is expected to close in the first quarter of 2015. The transaction remains subject to approval by regulatory authorities and First State Bank of Bourbon shareholders as well as the satisfaction of other closing conditions provided in the merger agreement.

Independent Alliance Banks, Inc. was advised by Renninger & Associates, LLC and the law firm of Krieg DeVault LLP. First State Bank of Bourbon was advised by Sheshunoff & Co. Investment Banking L.P. and the law firm of Bryan Cave LLP.

Source: Independent Alliance Banks Inc.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets on
{{ count_down }}