German American Bancorp and Citizens First entered into a definitive agreement to merge Citizens First with and into German American Bank.
Under terms of the definitive 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, and a cash payment of $5.80 per Citizens First share. 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 (provided that such average price will not be less than the closing price of German American’s common shares on the last trading day preceding the closing).
After completion of the merger, it is anticipated that one board member of Citizens First will be joining the board of German American. German American will also 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.
Based on the number of Citizens First common shares expected to be outstanding at closing, German American would issue approximately 1.7 million shares of its common stock, and pay approximately $16 million cash, for all of the issued and outstanding common shares of Citizens First. Based upon the $31.59 per share price of German American’s common shares ending on February 20, 2019, the transaction has an aggregate indicated value of approximately $68.2 million, with the total merger consideration being split between stock and cash on an approximate 77:23 basis.
Mark A. Schroeder, chairman and CEO of German American, stated, “We are excited to welcome Citizens First’s customers and team members to the German American family. Citizens First has built a solid and growing community banking franchise through which German American can provide our extensive offerings of banking, insurance, and investment products and services to Citizens First’s current and prospective clients. The acquisition furthers our expansion into vibrant Kentucky markets and strengthens our local presence in the Bowling Green market area, which has demonstrated a history of dynamic growth and prosperity.”
The transaction is expected to be completed in the third quarter of 2019, subject to approval by regulatory authorities and Citizens First shareholders, as well as certain other closing conditions.
Sandler O’Neill & Partners served as financial advisor on the transaction to German American, while Bingham Greenebaum Doll served as its legal counsel.
Keefe, Bruyette & Woods served as financial advisor to Citizens First, while Wyatt, Tarrant & Combs served as legal advisor.
