First Merchants, IAB announce signing of definitive merger agreement
First Merchants Corporation and Independent Alliance Banks, or IAB, announced they have executed a definitive agreement whereby IAB will merge with and into First Merchants, and its wholly owned bank subsidiary, iAB Financial Bank, will merge with and into First Merchants Bank. The merger agreement provides that shareholders of IAB 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 conditions. The combined company, doing business as First Merchants Bank, expects to complete its integration during the fourth quarter of 2017. First Merchants and IAB will have combined assets of $8.3 billion and will be the second largest financial holding company headquartered in Indiana. The combined company will have 122 banking offices in thirty-one Indiana counties, as well as two counties in both Ohio and Illinois.