UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------- DATE OF REPORT: August 1, 1996 -------------------- FIRST MERCHANTS CORPORATION (Exact Name of Registrant as Specified in its Charter) --------------------- INDIANA 0-17071 35-1544218 (State of Incorporation) (SEC File No.) (IRS Employer ID No.) 200 East Jackson Street P.O. Box 792 Muncie, Indiana 47305-2814 (Address of Principal Executive Offices) (317) 747-1500 (Registrant's Telephone Number) Page 1 of 12 Pages
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. As referenced in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the "Commission") on August 15, 1996, it was impracticable for First Merchants Corporation to provide the Union National Bancorp financial statements as of and for the period ended June 30, 1996 at the time of the filing of the Current Report on Form 8-K. Accordingly, as provided by Item 7(a)(4) of Form 8-K, First Merchants Corporation hereby submits the following financial statements for Union National Bancorp: (vii) Consolidated Condensed Balance Sheet as of June 30, 1996 (unaudited) (viii) Consolidated Condensed Statement of Income for the six (6) months ended June 30, 1996 and 1995 (unaudited) (ix) Consolidated Condensed Statement of Changes in Stockholders' Equity for the six (6) months ended June 30, 1996 (unaudited) (x) Consolidated Condensed Statement of Cash Flows for the six (6) months ended June 30, 1996 and 1995 (unaudited) (xi) Notes to Consolidated Condensed Financial Statements (unaudited) (b) Pro Forma Financial Information. As referenced in the Current Report on Form 8-K filed with the Commission on August 15, 1996, it was impracticable for First Merchants Corporation to provide the pro forma condensed combined financial information as of and for the period ended June 30, 1996 at the time of the filing of the Current Report on Form 8-K. Accordingly, as provided by Item 7(a)(4) and Item 7(b)(2) of Form 8-K, First Merchants Corporation hereby submits the following pro forma financial information: (ii) Pro Forma Condensed Combined Financial Information including Balance Sheet as of June 30, 1996 and Statement of Income for the six (6) months ended June 30, 1996. 2
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 14, 1996. FIRST MERCHANTS CORPORATION By /s/ Larry R. Helms -------------------------------- Larry R. Helms Senior Vice President 3
UNION NATIONAL BANCORP AND SUBSIDIARY CONSOLIDATED CONDENSED BALANCE SHEET (DOLLARS IN THOUSANDS) (UNAUDITED) June 30 1996 - -------------------------------------------------------------------------------- ASSETS Cash and due from banks $ 3,627 Investment securities Available for sale 56,984 Held to maturity 3,025 -------- Total investment securities 60,009 Loans 99,170 Allowance for loan losses (1,047) -------- Net loans 98,123 Premises and equipment 3,021 Other assets 2,795 -------- Total assets $167,575 -------- -------- LIABILITIES Deposits Noninterest bearing $ 8,636 Interest bearing 127,215 -------- Total deposits 135,851 Short-term borrowings 5,274 Federal Home Loan Bank advances 9,000 Other liabilities 1,609 -------- Total liabilities 151,734 -------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $5 stated value Authorized - 200,000 shares Issued and outstanding - 193,968 970 Paid-in capital 1,957 Retained earnings 12,800 Net unrealized gain on securities available for sale 114 -------- Total stockholders' equity 15,841 -------- Total liabilities and stockholders' equity $167,575 -------- -------- See notes to consolidated condensed financial statements. 4
UNION NATIONAL BANCORP AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENT OF INCOME (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) Six Months Ended June 30 1996 1995 - -------------------------------------------------------------------------------- INTEREST INCOME Loans receivable $ 3,969 $ 3,581 Investment securities Taxable 1,611 1,412 Tax exempt 400 467 Federal funds sold 13 38 ------------------------ Total interest income 5,993 5,498 ------------------------ INTEREST EXPENSE Deposits 3,145 2,969 Short-term borrowings 80 45 Federal Home Loan Bank advances 242 234 ------------------------ Total interest expense 3,467 3,248 ------------------------ NET INTEREST INCOME 2,526 2,250 Provision for loan losses 170 211 ------------------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,356 2,039 ------------------------ OTHER INCOME Service charges on deposit accounts 163 143 Net realized gains on sales of securities 24 22 Other income 52 30 ------------------------ Total other income 239 195 ------------------------ OTHER EXPENSES Salaries and employee benefits 888 802 Premises and equipment expenses 223 201 Data processing fees 101 89 Deposit insurance expense 1 136 Other expenses 233 127 ------------------------ Total other expenses 1,446 1,355 ------------------------ INCOME BEFORE INCOME TAX 1,149 879 Income tax expense 333 205 ------------------------ NET INCOME $ 816 $ 674 ------------------------ ------------------------ NET INCOME PER SHARE $ 4.21 $ 3.47 Weighted Average Shares Outstanding 193,968 194,302 See notes to consolidated condensed financial statements. 5
UNION NATIONAL BANCORP AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DOLLAR AMOUNTS IN THOUSANDS) (UNAUDITED) 1996 1995 - -------------------------------------------------------------------------------- Balances, January 1 $ 15,741 $ 13,409 Net income 816 674 Cash dividends (135) (136) Stock redeemed (26) Net change in unrealized gain (loss) on securities available for sale (581) 597 ------------------------ Balances, June 30 $ 15,841 $ 14,518 ------------------------ ------------------------ See notes to consolidated condensed financial statements. 6
UNION NATIONAL BANCORP AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED) Six Months Ended June 30 1996 1995 - -------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $ 816 $ 674 Adjustments to reconcile net income to net cash provided by operating activities Provision for loan losses 170 211 Depreciation and amortization 112 101 Investment securities amortization (accretion), net (109) 14 Investment securities gains (24) (22) Net change in Other assets (165) 298 Other liabilities 401 13 ------------------- Net cash provided by operating activities 1,201 1,289 ------------------- INVESTING ACTIVITIES Purchase of securities available for sale (7,644) (9,612) Proceeds from sales of securities available for sale 1,049 Proceeds from maturities of securities available for sale 7,819 4,500 Purchase of securities held to maturity (286) (1,655) Proceeds from sales of securities held to maturity 380 Proceeds from maturities of securities held to maturity 527 685 Net change in loans (8,736) (4,056) Purchase of premises and equipment (106) (28) Other investing activities 93 ------------------- Net cash used by investing activities (7,284) (9,786) ------------------- FINANCING ACTIVITIES Net change in Deposits 3,512 5,723 Short-term borrowings 1,872 2,395 FHLB advances 1,000 Cash dividends (135) (136) Stock redeemed (26) ------------------- Net cash provided by financing activities 6,249 7,956 ------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 166 (541) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,461 3,663 ------------------- CASH AND CASH EQUIVALENTS, END OF YEAR $ 3,627 $ 3,122 ------------------- ------------------- See notes to consolidated condensed financial statements. 7
UNION NATIONAL BANCORP AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Note 1: General The significant accounting policies followed by Union National Bancorp (Corporation) and its wholly owned subsidiary for interim financial reporting are consistent with the accounting polices followed for annual financial reporting. All adjustments which are in the opinion of management necessary for a fair statement of the results for the period reported have been included in the accompanying consolidated financial statements. Note 2: Acquisition On August 1, 1996, First Merchants Corporation of Muncie, Indiana (First Merchants) acquired all of the assets of the Corporation through the merger of the Corporation with and into First Merchants. Pursuant to the terms of the merger agreement, stockholders of the Corporation receive 4.86 shares of First Merchants common stock for each share of the Corporation common stock held. 8
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION The following unaudited pro forma combined condensed balance sheet as of June 30, 1996, and the pro forma combined condensed statement of income for the year ended June 30, 1996, give effect to the Merger based on the historical consolidated financial statements of First Merchants Corporation ("First Merchants") and its subsidiaries and the historical consolidated financial statements of Union National Bancorp ("Union National") and its subsidiary under the assumptions and adjustments set forth in the accompanying notes to the pro forma financial statements. The pro forma financial statements have been prepared by the managements of First Merchants and Union National based upon their respective financial statements. These pro forma statements, which include results of operations as if the Merger had been consummated at the beginning of each period presented, may not be indicative of the results that actually would have occurred if the Merger had been in effect on the dates indicated or which may be obtained in the future. The following pro forma combined condensed balance sheet and condensed statements of income include: (a) First Merchant's historical consolidated financial information. (b) Union National's historical consolidated financial information. (c) The combined statements of First Merchants and Union National, which have been designated herein as "First Merchants/Union National Pro Forma Combined." (d) Randolph County Bancorp's ("Randolph County") historical consolidated financial information, which has been designated herein as "Randolph County." On October 2, 1996, First Merchants acquired for shares of First Merchants common stock, all of the issued and outstanding common stock of Randolph County. The transaction will be accounted for as a pooling of interests; accordingly, historical financial data for Randolph County is included for all periods presented. (e) The combined statements of First Merchants, Union National and Randolph County which have been designated herein as "Pro Forma Combined." 9
PRO FORMA COMBINED CONDENSED BALANCE SHEET JUNE 30, 1996 (UNAUDITED) (IN THOUSANDS) (a) (b) (c) (d) (e) Pro Forma First Merchants/ Pro Forma Adjustments Union National Adjustments First Union Increase Pro Forma Randolph Increase Pro Forma Merchants National (Decrease) Combined County (Decrease) Combined ----------------------------------------------------------------------------------------------- Assets: Cash and due from banks $ 31,106 $ 3,627 $ 34,733 $ 2,067 $ 36,800 Federal funds sold 15,100 15,100 15,100 Interest- bearing deposits 107 107 Investment securities: Available for sale 145,992 56,984 202,976 24,271 227,247 Held to maturity 51,015 3,025 54,040 54,040 -------------------------------------------------------------------------------------------- Total investment securities 197,007 60,009 257,016 24,271 281,287 Loans 439,926 99,170 539,096 44,829 583,925 Allowance for loan losses (4,919) (1,047) (5,966) (665) (6,631) -------------------------------------------------------------------------------------------- Net loans 435,007 98,123 533,130 44,164 577,294 Premises and equipment 10,467 3,021 13,488 1,273 14,761 Goodwill 1,780 1,780 1,780 Other assets 13,742 2,795 16,537 1,415 17,952 -------------------------------------------------------------------------------------------- Total Assets $ 704,209 $167,575 $871,784 $ 73,297 $ 945,081 -------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------- Liabilities: Deposits $ 574,225 $ 135,851 $ 710,076 $ 62,388 $ 772,464 Short-term borrowings 41,611 5,274 46,885 1,500 48,385 Federal Home Loan Bank advances 9,000 9,000 9,000 Other liabilities 5,872 1,609 7,481 470 7,951 --------------------------------------------------------------------------------------------- Total Liabilities 621,708 151,734 773,442 64,358 837,800 --------------------------------------------------------------------------------------------- Stockholders' equity: Common stock 633 970 (852)(1) 751 2,756 (2,686) (2) 821 Additional paid-in capital 16,132 1,957 852 (1) 18,941 709 2,686 (2) 22,336 Retained earnings 65,971 12,800 78,771 5,593 84,364 Net unrealized gain (loss) on securities available for sale (235) 114 (121) (119) (240) ------------------------------------------------------------------------------------------- Total Stockholders' Equity 82,501 15,841 98,342 8,939 107,281 ------------------------------------------------------------------------------------------- Total Liabilities and Stockholders' Equity $ 704,209 $ 167,575 $ 871,784 $ 73,297 $ 945,081 -------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------- See notes to pro forma combined condensed balance sheet. 10
NOTES TO PRO FORMA COMBINED CONDENSED BALANCE SHEET (Unaudited) The following pro forma adjustments are necessary to record the Mergers. [1] To reflect exchange of shares of Union National common stock for shares of First Merchants common stock, retaining the historical cost basis of assets, liabilities and equity through the treatment as a pooling of interest. A total of 942,685 shares of First Merchants common stock were issued at the exchange ratio of 4.86 shares of First Merchants common stock for each of the 193,968 issued and outstanding shares of Union National common stock as of June 30, 1996, resulting in a transfer from common stock to additional paid-in capital of $852,000 to reflect the decrease in the aggregate par value of the issued and outstanding shares of First Merchants common stock relative to the aggregate par value of the currently outstanding shares of Union National common stock. Common stock $ (852) Additional paid-in capital $ 852 [2] To reflect exchange of shares of Randolph County common stock for shares of First Merchants common stock, retaining the historical cost basis of assets, liabilities and equity through the treatment as a pooling of interest. A total of 565,705 shares of First Merchants common stock were isssued at the exchange ratio of 20.53 shares of First Merchants common stock for each of the 27,555 issued and outstanding shares of Randolph County common stock as of June 30, 1996, resulting in a transfer from common stock to additional paid-in capital of $2,686,000 to reflect the decrease in the aggregate par value of the issued and outstanding shares of First Merchants common stock relative to the aggregate par value of the currently outstanding shares of Randolph County common stock. Common stock $ (2,686) Additional paid-in capital $ 2,686 11
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (a) (b) (c) (d) (e) Pro Forma First Merchants/ Pro Forma Adjustments Union National Adjustments First Union Increase Pro Forma Randolph Increase Pro Forma Merchants National (Decrease) Combined County (Decrease) Combined ---------------------------------------------------------------------------------------- Interest income $ 25,376 $ 5,993 $ 31,369 $ 2,645 $ 34,014 Interest expense 11,176 3,467 14,643 1,249 15,892 ---------------------------------------------------------------------------------------- Net interest income 14,200 2,526 16,726 1,396 18,122 Provision for loan losses 320 170 490 90 580 ---------------------------------------------------------------------------------------- Net interest income after provision for loan losses 13,880 2,356 16,236 1,306 17,542 Total other income 3,610 239 3,849 120 3,969 Total other expenses 9,546 1,446 10,992 802 11,794 ---------------------------------------------------------------------------------------- Income before income taxes 7,944 1,149 9,093 624 9,717 Income taxes 2,785 333 3,118 198 3,316 ----------------------------------------------------------------------------------------- Net income $ 5,159 $ 816 $ 5,975 $ 426 $ 6,401 ------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------ Net income per common share $ 1.02 $ 1.00 $ 0.97 Average Shares Outstanding 5,062,259 6,004,944 6,570,649 12