German American Bancorp, Inc., Jasper, Ind., announced it will buy five branches, with approximately $160 million in deposits and $134 million in loans, from MainSource Financial, Greensburg. The affected branches are located in Columbus and Greensburg, Ind.
The deal is connected to a previously announced agreement between MainSource, First Financial Bancorp, Cincinnati, and the Department of Justice, in order to resolve the DoJ’s competitive concerns about First Financial’s proposed acquisition of MainSource.
The purchase of the branches by German American is subject to regulatory approval.
In a news release, German American said it expects to pay a premium on deposits assumed of approximately 5 percent, or $8 million. The deposit premium paid at closing is subject to a “true-up” provision whereby the premium shall be recalculated on the six-month anniversary of the closing. In addition, MainSource has granted German American a 6-month “put-option” on the loans purchased, whereby German American can require MainSource to repurchase certain loans within six months following the transaction.
“We are very pleased to announce the addition of four branches to our current Columbus franchise as well as our entry into the Greenburg Market,” said Mark A. Schroeder, German American’s Chairman and CEO.
Main Source was advised by Keefe, Bruyette & Woods. German American was advised by Raymond James & Associates and Bingham Greenebaum Doll LLP.