MBT Financial Corp. in Monroe will merge with and into Indiana’s First Merchants Corp. in a 100-percent stock transaction valued at about $290.9 million, the companies announced today. Upon completion of the merger, Monroe Bank and Trust will merge with and into First Merchants Bank.
The transaction is expected to be completed in the first quarter of 2019. The combined company, under First Merchants Bank, expects to complete its integration during the third quarter of 2019.
MBT operates 20 banking center locations in metro Detroit and has grown to one of the largest community banks in Michigan since its founding in 1858. It has total assets of $1.3 billion, total loans of $733 million, and total deposits of $1.1 billion, and earned a 1.51-percent return on average assets and 16.59-percent return on tangible common equity for three months ended with June 30.
First Merchants and MBT will have combined assets of about $11 billion and will be the second-largest financial holding company headquartered in Indiana. It will have 134 banking offices in 31 Indiana counties, as well as two counties each in Michigan, Ohio, and Illinois.
“Like First Merchants, Monroe Bank and Trust has a long history and a deep-rooted commitment to community banking, and we are excited they have chosen to become the newest member of the First Merchants family,” says Michael C. Rechin, president and CEO of First Merchants.
“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 and Trust’s current initiatives while furthering our goal of growing as a high-performing company.”
The merger agreement provides that shareholders of MBT will have the right to receive 0.275 shares of First Merchants common stock for each share of MBT common stock owned. Based on the closing price of First Merchants’ common stock on Oct. 9 of $45.71 per share, the implied price of MBT’s common stock is $12.57 per share.
Keefe, Bruyette, and Woods served as the financial adviser to First Merchants, while Bingham Greenebaum Doll LLP served as legal adviser.
Sandler O’Neill and Partners LP and Donnelly Penman and Partners served as financial adviser to MBT in this transaction, while Shumaker, Loop, and Kendrick LLP served as legal adviser.