Two Midwestern-based banks that serve customers in southern Indiana, including Columbus, have announced plans to merge.
MainSource Financial Group, based in Greensburg, intends to merge with First Financial Bancorp, based in Cincinnati, Ohio, the companies said in a joint news release late Tuesday afternoon.
MainSource Bank will merge into First Financial Bank in a transaction valued at about $1 billion, the announcement said.
The transaction is expected to close in early 2018, subject to the approval of shareholders of both First Financial and MainSource and regulatory approvals, the companies said.
Combined, the bank is anticipated to become the sixth largest bank in deposit market share in Indiana and the fourth largest in the Greater Cincinnati area. Additionally, through a recent acquisition by MainSource Bank, both companies will fulfill their plans to expand in the Louisville market.
“By taking the best of both banks, we believe that the combined company will be even more effective in meeting the lending, economic development and financial education needs of the communities we serve,” said Claude E. Davis, chief executive officer of First Financial, who will transition into the role of executive chairman for a three-year term.
“With both companies having proven records of success in organic performance as well as through acquisitions, we see this as a tremendous opportunity to partner with MainSource to create a new company that is even better positioned for growth and continued success,” Davis said in a statement.
“We are pleased to partner with a company that has a shared vision, culture and focus on performance,” said Archie M. Brown Jr., chairman, president and chief executive officer of MainSource. “Our client-focused approaches and similar business models delivered across corresponding footprints position us to perform well.”
The merger will result in a combined company with about $13.3 billion in assets, $8.9 billion in loans, $10 billion in deposits and $4 billion in assets under management, utilizing financial information as of June 30, the companies said.
Upon closing, First Financial shareholders would own about 63 percent of the combined company and MainSource shareholders would own 37 percent, the announcement said.
The new combined company will operate as First Financial Bank and will be headquartered in Cincinnati, primarily serving customers in Ohio, Indiana and Kentucky.
First Financial has 102 banking centers in Ohio, Kentucky and Indiana, including five in the Columbus area: 125 Third St., 707 Creekview, 3950 Jonathan Moore Pike and 2531 Eastbrook Plaza in Columbus; and 2070 N. State St. in North Vernon.
MainSource Financial Group operates 101 banking centers. Its Columbus area offices are located at 1901 25th St., 529 Washington St., and 2310 W. Jonathan Moore Pike in Columbus; plus 3880 W. Presidential Way in Edinburgh, 8475 State Road 9 in Hope and 102 Underwood Drive in Westport.
“A lot of the footprint overlaps,” said Brown, who will serve as president and chief executive officer of the merged entity.
“If branches are a mile apart or less, some of those will be combined,” Brown said in a telephone interview Tuesday. “We haven’t determined any of that today.”
Merger discussions between the two companies began in late February and March, Brown said.
“It’s a pretty compelling merger opportunity for both companies and I believe the shareholders will feel that way,” he said.
As part of the merger, the companies also announced an intent to develop a comprehensive Community Development Plan which will include a commitment of 100 jobs and $1 million in community support to Greensburg, the MainSource headquarters community, over the next five years.
MainSource currently employs 275 to 290 workers in Greensburg and Decatur County, Brown said.