N/E/W/S R/E/L/E/A/S/E
September 3, 2008
Filed by First Merchants Corporation pursuant to
Rule 425 under the Securities Act of 1933
Subject Company: First Merchants Corporation
Corporation Commission File No.: 0-17071
For immediate release
For further information, contact:
Mark Hardwick, Executive VP and Chief Financial Officer
First Merchants Corporation 765-751-1857
Jerry R. Engle, President and CEO
Lincoln Bancorp 317-839-6539
First Merchants Corporation Announces the Signing of a Definitive Agreement to
Acquire Lincoln Bancorp
(Muncie, Ind. and Plainfield, Ind., September 3, 2008) First Merchants
Corporation (NASDAQ: FRME) and Lincoln Bancorp (NASDAQ: LNCB) today announced
they have executed a definitive agreement for First Merchants Corporation to
acquire Lincoln Bancorp through a merger of Lincoln into First Merchants.
First Merchants ($3.8 billion) and Lincoln ($890 million) will have combined
assets of $4.7 billion and create the largest financial holding company based in
Central Indiana. The combined company will have eighty-two banking offices in
twenty-three Indiana and three Ohio counties, a trust company with assets under
management in excess of $1.7 billion, and a multi-line insurance agency.
Mike Rechin, President and Chief Executive Officer of First Merchants, said,
"Lincoln Bancorp has a long history of deep-rooted commitment to community
banking, and will become the newest member of the First Merchants family. As a
company that has been in business since 1884, its success has been tied to the
high value it places on relationships with its customers and communities.
Lincoln's franchise fits well with First Merchants' strategic direction and
specifically its presence in Johnson and Hendricks counties, two of Indiana's
fastest growing markets. With convenience as an intended benefit, customers in
the Indianapolis market area may now enjoy access to 30 First Merchants Banking
Centers. The partnership between Lincoln and First Merchants provides Indiana
business owners and consumers with the opportunity to bank with an Indiana
company."
"Our expectation is that this combination will be mutually beneficial to First
Merchants and Lincoln shareholders. We anticipate modest dilution to Earnings
Per Share in 2009, with accretive EPS growth in 2010 and beyond, through
identified transaction synergies," Rechin stated.
"First Merchants shares our deep commitment to community banking. Our combined
strength will provide the opportunity to offer enhanced products and services to
our customers," stated Jerry R. Engle, President and Chief Executive Officer of
Lincoln Bancorp.
The merger agreement provides that shareholders of Lincoln will have the right
to elect to receive cash in the approximate amount of $15.76 per share, or
0.7004 shares of First Merchants common stock for each share of Lincoln common
stock owned by them, subject to proration as a result of a maximum limit on the
aggregate number of shares issued or cash paid to all Lincoln shareholders.
Based on First Merchants' September 2, 2008 closing price, the transaction value
is estimated between $74 million and $77 million depending on the elections of
shareholders.
The transaction is expected to be completed in the fourth quarter of 2008,
subject to the affirmative vote of Lincoln shareholders, regulatory approvals,
and other customary conditions.
The corporation further announced that Michael J. Stewart, First Merchants
Corporation's Chief Banking Officer, will also serve as President of the newly
consolidated First Merchants Bank of Central Indiana. Mike Baker and Jerry Engle
will serve as regional presidents, with continued commitment to strengthening
their local market impact.
Sandler O'Neill & Partners, L.P. served as financial advisor to Lincoln Bancorp
and rendered a fairness opinion to the company's board of directors in this
transaction. Lincoln Bancorp's legal advisor was Bose McKinney & Evans LLP.
First Merchants Corporation's legal advisor was Bingham McHale LLP.
First Merchants Corporation is a financial services holding company focused on
building deep lifelong client relationships and providing maximum shareholder
value.
First Merchants Corporation operates four bank subsidiaries including, First
Merchants Bank, First Merchants Bank of Central Indiana, Lafayette Bank & Trust
Company, and Commerce National Bank in Columbus, Ohio. First Merchants Trust
Company unites the trust and asset management services of all affiliate banks
and is one of Indiana's largest trust companies. The Corporation also includes
First Merchants Insurance Services and is majority owner of Indiana Title
Insurance Company.
Lincoln Bancorp and Lincoln Bank are headquartered in Plainfield, Indiana with
additional offices in Avon, Bargersville, Brownsburg, Crawfordsville, Frankfort,
Franklin, Greenwood, Mooresville, Morgantown, Nashville and Trafalgar. The Bank
also has 2 loan production offices located in Carmel and Greenwood, Indiana.
Forward-Looking Statements
This document contains forward-looking statements about First Merchants
Corporation, Lincoln Bancorp, the combined company, and the proposed merger,
which are within the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include statements with respect to the expected
timing, completion and effects of the proposed merger and the financial
condition, results of operations, plans, objectives, future performance and
business of First Merchants, Lincoln and the combined company, including
statements preceded by, followed by or that include the words "believes,"
"expects," "anticipates" or similar expressions. These forward-looking
statements involve certain risks and uncertainties. There are a number of
important factors which could cause First Merchants' and Lincoln's actual
results or the circumstances and timing of the proposed merger to differ
materially from those anticipated by the forward-looking statements. These
factors include, but are not limited to: (1) competitive pressures among
depository institutions increasing significantly; (2) changes in the interest
rate environment reducing interest margins; (3) prepayment activity, loan sale
volumes, charge-offs and loan loss provisions; (4) general economic conditions,
either nationally or in the states in which First Merchants and Lincoln do
business, become less favorable than expected; (5) expected synergies and cost
savings are not achieved or achieved at a slower pace than expected; (6)
integration problems or delays; (7) legislative or regulatory changes which
adversely affect the businesses in which First Merchants and Lincoln are
engaged; (8) changes in the securities markets; (9) the economic impact of
terrorist attacks and similar or related events; (10) receipt of regulatory
approvals without unexpected delays or conditions; (11) retention of customers
and critical employees; (12) unanticipated changes in laws, regulations, or
other industry standards; and (13) those risk factors described in First
Merchants' and Lincoln's Annual Reports on Form 10-K for the year ended December
31, 2007.
* * *
First Merchants will be filing a Registration Statement on Form S-4 concerning
the merger with the Securities and Exchange Commission ("SEC"), which will
include the proxy statement that will be mailed to Lincoln's shareholders. WE
URGE INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain the documents free of charge, when
filed, at the SEC's website, www.sec.gov. In addition, documents filed with the
SEC by First Merchants will be available free of charge from the Secretary of
First Merchants at 200 E. Jackson Street, Muncie, IN 47305, telephone (765)
747-1500. Documents filed with the SEC by Lincoln will be available free of
charge from the Secretary of Lincoln at 905 Southfield Drive, Plainfield, IN
46168, telephone (317) 839-6539. INVESTORS SHOULD READ THE PROXY STATEMENT
CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER. Copies of all recent
proxy statements and annual reports are also available free of charge from the
respective companies by contacting the company secretary.
First Merchants and Lincoln and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies to
approve the Merger. Information about the participants may be obtained through
the SEC's website from the definitive proxy statement filed with the SEC on
March 19, 2008, with respect to First Merchants and the definitive proxy
statement filed with the SEC on March 13, 2008, with respect to Lincoln.