City Holding Company Acquires First Merchants Bancorp in a Definitive Agreement

Strategic Insights -

City Holding Company has signed a definitive agreement to acquire First Merchants Bancorp, its subsidiary Merchants National Bank will become a wholly-owned subsidiary of City Holding. The acquisition will bring in assets of $115 million and deposits of $96 million, increasing City Holding's total assets to $896 million and total deposits to $747 million as of December 31, 1994.

Key Takeaways:

  • City Holding Company will acquire all outstanding shares of First Merchants Bancorp common stock in exchange for shares of City Holding common stock, with a ratio of 1.6 shares of City Holding common stock for each of the 576,000 outstanding shares of First Merchants Bancorp.
  • The transaction has been approved by the board of directors of both institutions and awaits approval by shareholders and regulatory authorities.
  • As part of the agreement, First Merchants has granted City Holding an option to buy new stock equal to 19.9% of the outstanding shares of First Merchants common stock for $45.60 per share, exercisable in specific events such as acquisition by another party or purchasing 9.9% or more of First Merchant's common stock.
  • Shareholders of First Merchants owning approximately 11.25% of First Merchants stock have also granted City Holding Company a similar option exercisable in similar events.
  • The acquisition will strengthen City Holding's presence in eastern Kanawha County and provide access to the Fayette, Clay, and Nicholas County markets.
  • Merchants National Bank has been a strong competitor in its market, valuing service and aligning with City Holding's Super Community Bank philosophy.

Statistics:

  • Total assets: $896 million (City Holding) + $115 million (First Merchants) = $1,011 million
  • Total deposits: $747 million (City Holding) + $96 million (First Merchants) = $843 million
  • Number of banks operated by City Holding: 32
  • Number of offices operated by City Holding: 32
  • Number of financial services subsidiaries operated by City Holding: 2 (City Financial Corporation and City Mortgage Corporation)

Sources:

  • City Holding Company press release, March 14, 1995
  • First Merchants Bancorp release, March 14, 1995
  • [Unable to verify specific contact information for Steven J. Day]