Old National Adding Another Bank
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowEvansville-based Old National Bancorp (Nasdaq: ONB) has announced the acquisition of an out-of-state bank. The deal with Founders Financial Corp. in Michigan is valued at more than $88 million and follows other mergers in the past year, including Tower Financial Corp. in Fort Wayne, Lafayette-based LSB Financial Corp. and United Bancorp Inc. in Michigan. July 28, 2014
News Release
EVANSVILLE, Ind. and GRAND RAPIDS, Mich. – Evansville-based Old National Bancorp (NASDAQ: ONB) (“Old National”) and Grand Rapids-based Founders Financial Corporation (“Founders”), jointly announced today the execution of a definitive agreement under which Old National will acquire Founders through a stock and cash merger.
With nearly $466 million in total assets, $355 million in loans, and $378 million in deposits as of June 30, 2014, Founders is a bank holding company with Founders Bank & Trust as its wholly-owned subsidiary. Founded in 1991, and boasting 78 consecutive profitable quarters, Founders Bank & Trust operates four full-service banking centers in economically vibrant Kent County, home to Grand Rapids and several of Michigan’s largest employers including Amway, Meijer, Spectrum Health and Steelcase.
Founded in Evansville, Indiana in 1834, with nearly $10.4 billion in total assets and 173 banking centers as of June 30, 2014, Old National, the parent company of Old National Bank, is the largest financial services holding company headquartered in Indiana. On a pro forma basis, including the acquisition of Ann Arbor-based United Bancorp, Inc. (NASDAQ: UBMI) scheduled to close on July 31, 2014, Old National Bank will have 36 branches and approximately $1.6 billion of deposits in the State of Michigan.
“This acquisition affirms Old National Bank's commitment to Southwestern Michigan by providing us with a strong and welcome presence in the state's second largest city,” said Old National President & CEO Bob Jones. “Like Founders Bank & Trust, Old National Bank is focused on exceeding client expectations and strengthening the communities we serve. We look forward to continuing the legacy of service to both clients and community that has become the Founders trademark.”
In celebration of this announcement, Old National and Founders announced their intention to collectively donate $15,000 to the Grand Rapids Community Foundation-Challenge Scholars. According to Laurie Beard, President & CEO of Founders Financial Corporation, this shared commitment to community is one of the primary drivers of the partnership.
“As a community-focused bank, we felt it was essential to choose a partner that not only shares our focus on highly personalized client service, but also our commitment to community engagement,” said Beard. “I'm excited to say we have found such a partner in Old National, and we look forward to enhancing our commitment to the Grand Rapids market through the strength of this new combination.”
Subject to the terms and conditions set forth in the merger agreement, which was unanimously approved by the boards of both companies, shareholders of Founders will receive 3.25 shares of Old National common stock and $38.00 in cash for each share of Founders stock. Based upon the July 25, 2014, closing price of $13.87 per share of Old National common stock, the transaction is valued at approximately $83.08 per share of Founders common stock, or approximately $88.2 million. The transaction value is likely to change due to fluctuations in the price of Old National common stock. The exchange ratio is also subject to adjustment under certain circumstances as provided in the merger agreement.
The merger is expected to close in the first half of 2015 and is subject to approval by Founders' shareholders, regulatory approvals and other customary closing conditions provided in the merger agreement. The merger agreement also provides that Founders Bank & Trust will be consolidated into Old National Bank.
Old National was advised by Sandler O'Neill + Partners L.P. and the law firm of Krieg DeVault LLP. Founders was advised by Donnelly Penman & Partners and the law firm of Warner Norcross & Judd LLP.
About Old National
Old National Bancorp (NASDAQ: ONB) is the largest financial services holding company headquartered in Indiana. With $10.4 billion in assets as of June 30, 2014, it ranks among the top 100 banking companies in the United States. Since its founding in Evansville, Ind., in 1834, Old National Bank 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 Founders Financial Corporation
With nearly $466 million in total assets as of June 30, 2014, Founders Financial Corporation is a bank holding company with Founders Bank & Trust as its wholly-owned subsidiary. Founded in 1991, and boasting 78 consecutive profitable quarters, Founders Bank & Trust operates four full-service banking centers in economically vibrant Kent County, home to Grand Rapids. The Bank provides a full range of banking services, including wealth management services, to individuals, professionals and commercial businesses located in its service area.
Conference Call
Old National will hold a conference call at 10:00 a.m. Central time on Monday, July 28, 2014, to discuss the announced acquisition of Founders Financial Corporation. The live audio web cast of the call, along with the corresponding presentation slides, will be available on Old National’s Investor Relations web page at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from 8:00 a.m. Central Time on July 29 through midnight August 12. To access the replay, dial 1-855-859-2056, conference code 73472033.
Source: Old National Bancorp