First Merchants Builds Tangible Common Equity, Receives Approval to Exchange TARP Securities with U.S. Treasury
MUNCIE, Ind.--(BUSINESS WIRE)-- First Merchants Corporation (NASDAQ: FRME) today announced that it has completed a registered direct private placement of common equity totaling 4.2 million shares raising $24.1 million.
The equity offering is a continuation of the Corporation's capital plan as discussed in its 2009 quarterly conference calls. Management and the Board believe the actions completed under this plan will prove to be the least dilutive path to an improved capital mix.
The Corporation announced on form 8-K filed on March 25, 2010 that it received a response from the United States Department of the Treasury expressing its willingness to consent to management's proposed exchange of up to $58 million of the company's cumulative perpetual preferred stock for trust preferred securities. Upon completion of the exchange with the Treasury, expected early in the second quarter of 2010, First Merchants anticipates recording a gain between $10 million to $14 million.
Mark K. Hardwick, Chief Financial Officer stated, "The successful addition of $24.1 million of tangible common equity will serve as the catalyst necessary to close our Treasury exchange." Hardwick also added, "We are pleased to have worked directly with the participating investors and feel we have added several of the finest institutional bank stock investors to our shareholder base."
Michael C. Rechin, Chief Executive Officer stated, "While First Merchants has always maintained regulatory ratios in excess of "well capitalized" requirements, the combination of our current transactions provides us with the opportunity to further strengthen our capital. In addition, the transactions allow our management to remain solely focused on the fundamentals of our business, serving the communities in our franchise."
The Corporation's SEC counsel, Bingham McHale, LLP and a prominent investment bank, Sandler O'Neill & Partners, LP aided management by serving as legal and financial advisors, respectively on the completion of the transaction.
About First Merchants Corporation
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, A Division of First Merchants Bank, N.A., Commerce National Bank, A Division of First Merchants Bank, N.A., as well as First Merchants Trust Company, N.A., and First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.
First Merchants Corporation's common stock is traded over-the-counter on the NASDAQ National Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company's Internet web page (http://www.firstmerchants.com).
Source: First Merchants Corporation
Contact: First Merchants Corporation Mark Hardwick, 765-751-1857 EVP and Chief Financial Officer http://www.firstmerchants.com