MBT Financial (MBTF) has agreed to merge with Indiana-based bank holding company First Merchants in an all-stock deal worth $290.9m.
While the Michigan-based bank holding company MBTF owns Monroe Bank & Trust, First Merchants is the holding company of First Merchants Bank. As part of the deal, Monroe Bank & Trust will be merged with First Merchants Bank.
The merger will see the enlarged bank holding company have assets of nearly $11bn, making it the second such company in Indiana. The combination will have 134 banking offices across 31 counties in Indiana counties, and also in two counties each across the states of Michigan, Ohio and Illinois.
As per the merger terms, MBTF shareholders will be issued 0.275 shares of First Merchants common stock in exchange of each share they hold in MBTF.
The transaction values MBTF common stock at $12.57 per share.
Monroe Bank & Trust president and CEO Douglas Chaffin said: “We believe our partnership with First Merchants will provide tremendous benefits to our customers, shareholders and communities as we look forward to continuing the legacy of exceptional customer service, local responsiveness and strong community engagement that has defined Monroe Bank & Trust for 160 years.”
Currently, MBTF operates 20 banking centers located in the southeastern Michigan area. Its subsidiary Monroe Bank & Trust, which was founded in 1858, is considered to be among the largest community banks in Michigan.
As of 30 June 2018, MBTF has $1.3bn of total assets, $733m in total loans and $1.1bn in total deposits.
First Merchants president and CEO Michael Rechin said: “The MBTF franchise opens an entirely new contiguous banking market for us with a high-quality and prudently managed 160 year old institution.
“We believe that our strategy to be a service-driven alternative to our super-regional bank competitors will support the acceleration of Monroe Bank & Trust’s current initiatives while furthering our goal of growing as a high-performing company.”
The deal is anticipated to be closed in the first quarter of 2019, depending on approval of MBTF shareholders, regulatory approvals, and other customary conditions.