German American Bancorp Inc. and Citizens First Corp. have announced they have entered into a definitive agreement to merge Citizens First into German American.
Jasper-based German American, through its banking subsidiary German American Bank, operates 65 banking offices in 20 contiguous southern Indiana counties, including Bartholomew County, and four counties in Kentucky. Citizens First, based in Bowling Green, Kentucky, has branches in four Kentucky counties and a loan production office in Tennessee.
Under terms of the agreement, Citizens First common shareholders (excluding 401(k) shareholders) will receive a fixed exchange ratio of 0.6629 shares of German American common stock for each share of Citizens First in a tax-free exchange. They will also receive a cash payment of $5.80 per Citizens First share, according to a news release.
Shareholders who hold Citizens First common shares in the Citizens First Bank 401(k) Profit Sharing Plan will receive a cash payment equal to $5.80 plus the exchange ratio multiplied by the 20-day volume weighted average price of German American’s common shares on the second day prior to closing.
After completion of the merger, it is anticipated that one board member of Citizens First will join the board of German American. In addition, German American will add M. Todd Kanipe, president and CEO of Citizens First, as a regional president in the combined institution, as well as all three of the additional Citizens First executive officers in regional roles similar to their current positions, the news release said.
Based upon the $31.59 per share closing price of German American’s common shares ending Feb. 20, the transaction has a value of $26.74 per Citizens First common share. Because a portion of the consideration to be received is German American’s common stock, the stock portion of the transaction value with fluctuate until closing together with the market price of German American’s common shares, the news release said.
Based on the number of Citizens First common shares expected to be outstanding at closing, German American would issue about 1.7 million shares of its common stock, and pay about $16 million cash, for all the issued and outstanding common shares of Citizens First, German American said.
Based upon the $31.59 per share price of German American’s common shares ending Feb. 20, the transaction has an aggregate indicated value of about $68.2 million, German American said.
The transaction is expected to be completed in the third quarter of 2019. Completion of the transaction is subject to approval by regulatory authorities and Citizens First shareholders, as well as certain other closing conditions.