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After legal delay, First Merchants set to close Ameriana buyout

December 31, 2015

Muncie-based First Merchants Corp. is set to close its $69 million acquisition of New Castle-based Ameriana Bancorp, officials said, just a few weeks after two shareholder lawsuits opposing the deal were dropped.

First Merchants Bank CEO Michael Rechin said Wednesday that he expects the buyout to close Thursday or early next week. It'll be the latest in a spree of acquisitions by the company over the past several years, including its $49 million purchase of Noblesville-based Community Bancshares in November 2014.

"It's the next step in bolstering our greater Indianapolis presence," Rechin said. "We think it gives us a little bit more retail convenience, and a little bit more commercial firepower as well."

The Ameriana deal had come under attack by Ameriana investors who, in part, alleged the terms of the offer were unfair and prohibited the bank from entertaining other bidders. The deal was announced in June, and the lawsuits followed in July and September.

According to court filings, both parties agreed to drop the suits earlier this month without any settlements.

Attorney Wayne Turner of Hoover Hull Turner LLC, who represented Ameriana and the board members being sued, said such litigation commonly follows announced mergers and acquisitions, and defendants occasionally pay nuisance money to plaintiffs.

"I think [the plaintiffs] figured out that we weren't going to pay them or give up easily," he said, "so they quit."

First Merchants Bank had about $6.2 billion in assets at the end of September, so adding Ameriana Bank, which had $463 million in assets at the time, represents an 8 percent bump.

The acquisition would also boost Indiana deposits at First Merchants by about 9 percent, to roughly $4.6 billion. That would give First Merchants a 4.09 percent share of all deposits in the state, based on June 30 Federal Deposit Insurance Corp. data.

The bank would still remain fifth in deposit market share among 161 banks operating in the state, but the acquisition inches it closer to fourth-ranked Old National Bank, an Evansville-based bank that had a 5.42 percent share at the end of June.

The Ameriana purchase will give First Merchants 14 additional branches, bringing its total to 126 banking offices in 27 Indiana counties and two counties in both Ohio and Illinois.

Before the buyout offer, Ameriana had been building a branch in Broad Ripple on College Avenue. Once the deal closes, First Merchants' signage will be stamped on the property, marking its first branch in Marion County. It's expected to open in January. 

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