German American Bancorp, Inc. announced that its banking subsidiary, German American Bancorp, has signed a definitive agreement to acquire five branches in Columbus and Greensburg, Indiana.
The purchase includes approximately $160 million deposits and $134 million in loans, as of December 31, 2017, from MainSource Bank, the banking subsidiary of MainSource Financial Group, Inc.
The sale is in connection with a previously-announced agreement between First Financial Bancorp, MainSource and the U.S. Department of Justice in order to resolve the Department’s competitive concerns about First Financial’s proposed acquisition of MainSource. The purchase of the branches is subject to the receipt of regulatory approvals from the relevant federal and state banking agencies.
“We are very pleased to announce the addition of four branches to our current Columbus franchise as well as our entry into the Greensburg market. We have been looking for opportunities to expand our presence in Columbus since entering the market in 2013. Furthermore, this transaction brings immediate income to our bottom line and is expected to be accretive to our earnings per share.” said Mark A Schroeder, German American’s chairman and CEO.
German American expects to pay a premium on deposits assumed of approximately 5 percent or $8 million. The deposit premium paid at closing is subject to a “true-up” provision whereby the premium shall be recalculated on the six month anniversary of closing. In addition, MainSource has granted German American a 6-month “put-option” on the loans purchased, whereby German American can require MainSource to repurchase certain loans within six months following the closing of the transaction.
Raymond James & Associates, Inc. served as German American’s financial advisor and Bingham Greenebaum Doll LLP served as German American’s legal counsel on the transaction.