Old National to acquire Fort Wayne’s top local bank

Old National Bancorp, the largest financial services company headquartered in Indiana, has agreed to buy Fort Wayne-based Tower Financial Corp. for about $107.7 million, the companies announced Tuesday.

Tower Financial stock skyrocketed 47 percent Tuesday morning after the deal was disclosed.

The stock-and-cash transaction value is likely to change due to fluctuation in the price of Old National stock before the closing. The deal, which is subject to regulatory approval, is expected to close in the first quarter of 2014.

Tower Financial has $680.9 million in total assets and manages another $523.3 million in trust assets. It is parent of the Tower Bank & Trust Co., the largest independent bank headquartered in Fort Wayne.

Tower Bank, founded in 1999, has six full-service banking centers in Fort Wayne and one in Warsaw with total deposits of $581.6 million and $438.6 million in loans.

Evansville-based Old National has $9.6 billion in assets and 176 bank branches.

“We are absolutely thrilled about this partnership, which dramatically expands Old National’s presence in the attractive Fort Wayne market, and which will continue and strengthen Tower’s community banking commitment, while helping to solidify our standing as Indiana’s bank,” Old National CEO Bob Jones said in a prepared statement.

Under the agreement approved by the boards of both companies, shareholders of Tower Financial will receive 1.20 shares of Old National common stock and $6.75 in cash for each share of Tower Financial common stock.

The $107.7 million merger value is based on the Sept. 5 closing price of Old National stock of $13.52 per share. Old National shares traded at $13.75 early Tuesday, down 2 cents from Monday’s close.

Tower Financial shares jumped $7.31 Tuesday morning, to $22.97 each.

 

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