Wednesday, August 16th, 2017

iAB to partner with First Merchants Corporation

Posted: Friday, February 17, 2017

Independent Alliance Banks, Inc. (OTCQX: IALB) (“IAB”), the holding company of iAB Financial Bank and First Merchants Corporation (NASDAQ: FRME) (“First Merchants”) jointly announced today the execution of a definitive agreement whereby IAB will merge with and into First Merchants, and iAB Financial Bank will merge with and into First Merchants Bank.

The merger agreement provides that shareholders of Independent Alliance Banks will have the right to receive 1.6530 shares of First Merchants common stock for each share of IAB common stock owned. Based on the closing price of First Merchants’ common stock on February 16, 2017 of $42.10 per share, the implied price of IAB common stock is $69.59 per share. On November 21, 2016, First Merchants purchased 495,112 shares or 12.1% of IAB’s outstanding common stock from an IAB shareholder for $19.8 million in cash. Based on the closing price of First Merchants’ common stock on February 16, 2017, the transaction value for the remaining shares of common stock, not owned by First Merchants, is approximately $251.3 million.

The transaction is expected to be completed in the third quarter of 2017, subject to the affirmative vote of IAB shareholders, regulatory approvals and other customary considerations.

The merger’s strategic highlights include: Combined assets of $8.3 billion, creating the second largest financial holding company headquartered in Indiana; serving customers from the convenience of 122 banking offices in 31 Indiana counties, as well as two counties in both Ohio and Illinois; one of the largest Trust organizations in Indiana; second largest agribusiness portfolio in Indiana; strengthening of a core commitment to community banking; enhancing products, services and technological capabilities; and enhanced lending limits with local decision-making.

“We are excited about the opportunity to become part of the First Merchants family, and we believe this partnership will be good for our clients, shareholders and local communities in whom we serve”, stated Michael C. Marhenke, president and CEO of iAB Financial Bank. “For several years our strategic plan has been driven to be the community bank of choice in our marketplace. Our bankers look forward to expanded new product capabilities and lending capacity in continuing to build relationships with our clients as First Merchants. The core values of both companies share a commitment to local decision making, personal service, long-term relationships and community involvement.”