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First Merchants, MBT will merge

Indiana’s First Merchants Corporation has inked a deal to acquire Michigan’s MBT Financial Corporation in an all-stock transaction valued at approximately $291 million.

The $1.3 billion MBT has total loans of $733 million, total deposits of $1.1 billion (96 percent of which are core), and 20 offices in southeast Michigan. The Monroe-based MBT earned a 1.51 percent return on average assets and 16.59 percent return on tangible common equity for the three months ended June 30.

MBT had approximately $998 million of deposits in the Monroe, Mich., MSA, ranking it first in deposit market share with approximately 50 percent of the market. MBT’s wealth planning and advisory group has the fifth largest trust/investment services group among all banks in Michigan, the bank said, with assets under management in excess of $700 million.

The deal will close in the first quarter, with integration of MBT’s Monroe Bank & Trust into First Merchants Bank in the third quarter.

First Merchants and MBT will have combined assets of approximately $11 billion and will be the second largest financial holding company headquartered in Indiana. The combined company will have 134 banking offices in thirty-one Indiana counties, as well as two counties each in Michigan, Ohio and Illinois.

“Like First Merchants, Monroe Bank & Trust has a long history and a deep-rooted commitment to community banking,” said Michael C. Rechin, president and CEO of the $9.7 billion First Merchants. “The MBTF franchise opens an entirely new contiguous banking market for us with a high-quality and prudently managed 160 year old institution.”

Keefe, Bruyette & Woods, a Stifel Company, served as the financial advisor to First Merchants and legal advisor was Bingham Greenebaum Doll LLP.

Monroe Bank & Trust President and CEO H. Douglas Chaffin will lead the newly acquired market as regional president. His executive team will include Wayne County President and Strategic Support Director, Scott McKelvey; Chief Lending Manager and Sales Director Thomas Myers; and Wealth Planning, Advisory and Mentorship Director, Audrey Mistor.

Sandler O’Neill + Partners, L.P. and Donnelly Penman & Partners served as financial advisor to MBT in this transaction and Shumaker, Loop & Kendrick, LLP served as legal advisor to MBT.