639229.2
N / E / W / S R / E / L / E / A / S / E
August 28, 2002
Filed by First Merchants Corporation pursuant to
Rule 425 under the Securities Act of 1933
Subject Company: First Merchants Corporation
Commission File No.: 0-17071
FOR IMMEDIATE RELEASE
CNBC BANCORP AND FIRST MERCHANTS CORPORATION AGREE TO MERGE
Thomas D. McAuliffe, Chief Executive Officer of CNBC Bancorp ("CNBC"),
Worthington, Ohio, and Michael L. Cox, President and Chief Executive Officer of
First Merchants Corporation ("First Merchants"), Muncie, Indiana, jointly
announced the execution of a Definitive Agreement to merge CNBC into First
Merchants.
The merger will be accomplished through the exchange of 1.01 shares of First
Merchants common stock (valued at $27.41 based on First Merchants August 27,
2002 closing price of $27.14), or $29.57 in cash for each of the outstanding
shares of CNBC. However, no more than $24,561,693 aggregate cash may be paid in
the merger and there may be allocations of stock to certain shareholders if this
threshold is exceeded. At current market prices, the transaction will have an
approximate value of $58 million. First Merchants declared a 5% stock dividend
payable September 13, 2002 to First Merchants shareholders of record on August
30, 2002. The 1.01 exchange ratio will not be adjusted as a result of the stock
dividend. This transaction will be a tax-free stock exchange for CNBC
shareholders electing stock. The transaction, which is subject to CNBC
shareholder and regulatory approval, is expected to be completed in the first
quarter of 2003.
First Merchants ($2.7 billion) and CNBC ($320 million) will have combined assets
of $3 billion. Upon completion of the merger, Commerce National Bank, CNBC's
subsidiary, will continue to operate as a growing commercial banking entity in
the greater Columbus, Ohio market. Thomas McAuliffe will continue as its Chief
Executive Officer and John Romelfanger will continue as Chief Operating Officer
and its 16-member board of directors will remain intact. Additionally, Mr.
McAuliffe will be nominated to serve on the board of directors of First
Merchants. In commenting on the transaction, Mr. McAuliffe stated that, "First
Merchants has developed an enviable record of community banking and has
established a network of community banks that continue to serve their respective
communities with local decision-makers. Commerce National has succeeded over the
past 10 years in developing a small to mid-size business presence that will only
be enhanced by our affiliation with First Merchants. We look forward to offering
additional banking services and financing capability to our growing clientele.
Our loyal shareholders who have provided the growth capital for our expansion
will have the opportunity to further their investment in First Merchants
Corporation common stock or receive cash, if they so desire."
Mr. Cox said, "Commerce National Bank has been a rapidly growing 10-year old
bank in a very attractive market. We have come to appreciate the banking
expertise that the staff of CNBC has exhibited since their inception. It is our
desire to enter this vibrant growth market, and we believe that CNBC will
provide the ideal base for future growth. Tom McAuliffe, John Romelfanger and
their staff will direct the activities of Commerce National Bank in a manner
that we believe will continue their excellent operating history."
First Merchants is a Financial Holding Company headquartered in Muncie, Indiana,
whose bank subsidiaries operate 69 offices in 19 counties. Its subsidiaries
include First Merchants Bank, The Madison Community Bank, First United Bank, The
Union County National Bank of Liberty, The Randolph County Bank, The First
National Bank of Portland, Decatur Bank & Trust Company, Frances Slocum Bank &
Trust Company, and Lafayette Bank and Trust Company. First Merchants also
operates First Merchants Insurance Services, a full-service property casualty,
personal lines and healthcare insurer, and is a majority partner in Indiana
Title Insurance Company offering title insurance and settlement services to the
real estate market.
First Merchants common stock is traded over-the-counter on the NASDAQ National
Market System under the symbol FRME and is rated A+ by Standard and Poor's
Corporation. Quotations are carried in daily newspapers and can be found on the
company's Internet Web page. (http://firstmerchants.com). Nine brokerage firms
make a market in First Merchants Corporation stock: Robert W. Baird & Co., Inc.;
Herzog, Heine, Geduld, Inc.; Howe Barnes & Johnson, Inc.; Keefe, Bruyette &
Woods, Inc.; Knight Securities, L.P.; McDonald Investments, Inc.; NatCity
Investments, Inc.; Sherwood Securities Corp.; and Spear, Leads and Kellog.
CNBC's common shares are traded on the NASDAQ Small Cap Market under the symbol
CNBD. The following brokerage firms have transacted business in CNBC common
shares during the past year: Baird, Patrick & Co., Inc.; Herzog, Heine, Geduld,
Inc.; Howe Barnes Investments, Inc.; Island System Corporation; Midwest Research
First Tennessee; Spear, Leads & Kellogg; and Sweney Cartwright & Co.
Statements contained in this press release that are not historical facts may
constitute forward-looking statements (within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended) which involve significant risks and
uncertainties. The companies intend such forward-looking statements to be
covered by the Private Securities Litigation Reform Act of 1995, and are
including this statement for purposes of invoking these safe harbor provisions.
The companies' ability to predict results or the actual effect of future plans
or strategies is inherently uncertain and involves a number of risks and
uncertainties, some of which have been set forth in the companies' most recent
annual reports on Form 10-K and Form 10-KSB and other SEC filings, which
disclosures are incorporated by reference herein. The fact that there are
various risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.
First Merchants will be filing a Registration Statement on Form S-4 concerning
the merger with the Securities and Exchange Commission ("SEC"), which will
include the merger proxy statement/prospectus that will be mailed to
shareholders of CNBC. WE URGE INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the documents
free of charge, when filed, at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by First Merchants will be available free of charge
from the Secretary of First Merchants at 200 East Jackson Street, Muncie,
Indiana 47305-2814, telephone (765) 747-1530. Documents filed with the SEC by
CNBC will be available free of charge from the Secretary of CNBC at 100 East
Wilson Bridge Road, Worthington, Ohio 43085, telephone (614) 848-8700. INVESTORS
SHOULD READ THE MERGER PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A
DECISION CONCERNING THE MERGER. Copies of all recent proxy statements and annual
reports are also available free of charge from the respective companies by
contacting the company secretary.
CNBC and First Merchants and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies to approve the
Merger. INFORMATION ABOUT THE PARTICIPANTS MAY BE OBTAINED THROUGH THE SEC'S
WEBSITE FROM THE DEFINITIVE PROXY STATEMENT FILED WITH THE SEC ON FEBRUARY 21,
2002, WITH RESPECT TO FIRST MERCHANTS AND THE DEFINITIVE PROXY STATEMENT FILED
WITH THE SEC ON MARCH 21, 2002, WITH RESPECT TO CNBC.
CONTACT: First Merchants Corporation
Mark K. Hardwick
Senior Vice President/Chief Financial Officer
Phone: (765) 751-1857
CNBC Bancorp
John A. Romelfanger
Treasurer and Secretary
Phone: (614) 848-8700