MOORESVILLE, Ind. and
CARMEL, Ind., May 8, 2013 /PRNewswire/ -- CITBA Financial
Corporation (CITBA) (OTC: CBAF), Mooresville, IN, the bank holding company of
Citizens Bank, and Merchants Bancorp (Merchants)(private),
Carmel, IN, the bank holding
company of Merchants Bank of Indiana, announced today they have signed a
definitive agreement for the merger of Merchants with and into
CITBA. CITBA will be the surviving corporation, and will be
renamed Merchants Bancorp. Citizens Bank will be merged with
and into Merchants Bank of Indiana.
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CITBA serves the retail banking needs of Morgan, Johnson and Hendricks County markets with eleven
locations, and has $375 million in
assets, 133 employees, and over 400 shareholders. Merchants
focuses on several aspects of mortgage and agricultural lending and
wealth services from four Central
Indiana locations, has $1.2
billion in assets, 74 employees, and 8 shareholders.
Merchants Bank of Indiana owns P/R
Mortgage & Investment Corp., a leading multi-family housing
mortgage company in the Midwest United States.
"I am very excited about the combination of our two strong
community banks with complimentary business models. This
unique opportunity creates an exceptional community bank with
multiple revenue streams and a strong foundation for further
growth," stated Lynn Gordon,
President & CEO of CITBA and Citizens Bank, who is expected to
continue to head the regional banking operations of Merchants in
the current Citizens Bank market areas following the merger.
"Both banks will be working closely together to ensure a seamless
transition for customers and employees. Customers will not
experience any changes to their accounts or banking routines."
Steve Mills, Chairman of CITBA
and Citizens Bank, added, "We are delighted to become a part of the
Merchants organization and believe the combination created by our
two companies will enable us to better serve our customers through
increased convenience as well as the addition of broader financial
services. Our shareholders will continue their investment in
Central Indiana banking through
their ownership of CITBA shares (renamed Merchants) and benefit
from economies of scale. This would have not have been
possible without the excellent work of all of our employees during
these past years of economic recession that affected all banks in
our country, including our senior management team led by
Lynn Gordon, our President and
CEO."
Michael F. Petrie, Chairman and
CEO of Merchants, commented, "The combined companies provide strong
synergies that will promote the geographic expansion of our product
and service lines without job loss. In fact, we expect this
merger to create more job opportunities, allow us to provide better
services to our customers, be better stewards to our communities,
and reward our shareholders. We are proud to join the CITBA family
in remaining a 'Hoosier Owned – Hoosier Operated' community
bank."
Under the terms of the agreement, Merchants shareholders will
exchange each of their 10,000 shares for 370.7908 shares of CITBA
stock resulting in ownership of 80% of all outstanding CITBA
shares.
Shares of CITBA will not be changed by the merger.
Existing shareholders will keep their share certificates with no
need to exchange them for new certificates, despite the name
change. Current CITBA shareholders, however, are expected to
benefit in the future from higher earnings per share and dividends
per share in the first year following the completion of the
merger.
Merchants, which is owned by Mr. Petrie and Randall D. Rogers and their families, is
presently treated as a corporation taxable under Subchapter S of
the Internal Revenue Code of 1986, as amended (the IRC).
Following the transaction, the resulting company will be treated as
a corporation under Subchapter C of the IRC. The transaction
is expected to result in certain tax accruals that will reduce
Merchants' shareholders' equity. The amount of such tax
accruals will be determined as of the closing date of the
merger. The merger agreement includes certain protection to
both Merchants and CITBA in connection with the actual tax
accruals. The transaction is expected to be completed in the
third quarter of 2013, subject to regulatory and CITBA shareholder
approval.
Merchants was advised by Mike
Renninger of Renninger & Associates, LLC and represented
by John Tanselle of Krieg DeVault
LLP. CITBA was advised by Craig
Mancinotti of Austin Associates, LLC and represented by
Mark Barnes of Mark Barnes Law PC.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking
statements. These statements include, but are not limited to,
the respective descriptions of CITBA's and Merchants' financial
condition, results of operations, asset and credit quality trends,
profitability and statements about the expected financial benefits
and other effects of the affiliation between the two
companies. Forward-looking statements can be identified by
the use of the words "anticipate," "believe," "expect," "intend,"
"could" and "should," and other words of similar meaning. These
forward-looking statements express management's current
expectations or forecasts of future events and, by their nature,
are subject to risks, uncertainties and other factors that could
cause actual results to differ materially from those in such
statements. Factors that might cause such a difference
include, but are not limited to: expected cost savings, synergies
and other financial benefits from the affiliation might not be
realized within the expected time frames and costs or difficulties
relating to integration matters might be greater than expected;
market, economic, operational, liquidity, credit and interest rate
risks associated with the combined entity's businesses;
competition; government legislation and policies; the ability of
the combined entity to execute its business plan; changes in the
economy which could materially impact credit quality trends and the
ability to generate loans and gather deposits; failure or
circumvention of internal controls; failure or disruption of
information systems; significant changes in accounting, tax or
regulatory practices or requirements; and, new legal obligations or
liabilities or unfavorable resolutions of litigations. These
forward-looking statements are made only as of the date of this
press release, and neither CITBA nor Merchants undertake an
obligation to release revisions to these forward-looking statements
to reflect events or conditions after the date of this release.
For more information, contact:
CITBA Financial Corporation -
Lynn
Gordon President & CEO
(317)831-0110
Merchants Bancorp
- Michael
Petrie Chairman & CEO
(317)569-7420
SOURCE CITBA Financial Corporation