September 13, 2019 - Defiance, Ohio-based First Defiance Financial Corp. is acquiring Youngstown, Ohio-based United Community Financial Corp. in an all-stock transaction valued at $473 million.
First Defiance is the parent company of First Federal Bank of the Midwest and United Community is the parent company of Home Savings Bank. First Defiance shareholders will own 52.5% of the combined company.
Terms of the agreement announced Sept. 9 call for United Community shareholders to receive 0.3715 shares of First Defiance for each share of United Community. The deal’s value was based on a First Defiance closing price of $26.32 on Sept. 6.
Both parties to the agreement expect the larger size of the pro forma company to produce efficiencies, strengthen operating leverage and improve shareholder value, they said in a statement.
“After a long relationship between the two companies, we are thrilled to bring together these two great Ohio community bank franchises. These organizations are a perfect strategic fit, balancing the strengths of each,” Donald Hileman, First Defiance president and chief executive officer, said in the statement.
“With enhanced scale, we will have the opportunity to continue to grow and compete more effectively in all the markets we serve for the foreseeable future.”
The combined company will have about $6.1 billion in assets, $4.9 billion in deposits and $5 billion in loans.
By leveraging their strengths of each institution in retail and commercial banking, residential lending, insurance and wealth management, the bank holding companies said they would better serve customers in their expanded footprint of Ohio, Indiana, Michigan, Pennsylvania and West Virginia.
“We are pleased to partner with a company that has a shared community-minded vision, culture and focus on performance,” Gary Small, United Community’s president and CEO, said in a statement.
“I truly believe that this merger is a win-win for all stakeholders: customers, associates, shareholders as well as the communities we serve.”
Hileman will serve as CEO for the bank and holding company and then transition to an executive chairman role early in 2021. Small will serve as president of the bank and holding company before transitioning to CEO when Hileman becomes executive chairman.
The acquisition is expected to improve earnings per share by 14% once the banks are integrated. The book value per share dilution was projected to be about 4% including restructuring charges.
First Merchants completes MBTF acquisition
First Merchants Corp., the Muncie-based parent company of First Merchants Bank, has closed on its purchase of MBT Financial Corp., the Monroe, Michigan-based parent company of Monroe Bank & Trust.
MBTF trades on NASDAQ under the MTBF ticker symbol. The 100% stock transaction closed on the first of the month. The transaction’s implied price for MBTF stock was $12.57 per share.
For each MBTF share, owners were to have the right to receive 0.275 shares of First Merchants stock, which closed at $45.71 the day before the Oct. 10, 2018 acquisition announcement.
“Like First Merchants, Monroe Bank & Trust had a long history and a deep-rooted commitment to community banking, and we are excited they have chosen to become the newest member of the First Merchants family,” Michael Rechin, First Merchants president and CEO, said in a statement.
“The MBTF franchise opens an entirely new contiguous banking market for us with a high-quality and prudently managed 160-year-old institution. We believe that our strategy to be a service-driven alternative to our super-regional bank competitors will support the acceleration of Monroe Bank & Trust’s current initiatives while furthering our goal of growing as a high-performing company.”
MBT had 20 banking locations, all in southeastern Michigan, and First Merchants said it plans to retain and operate all of them.
Since it was founded in 1858, MBT has grown into one of Michigan’s largest community banks, with assets of $1.3 billion, loans of $769 million and deposits of $1.2 billion as of June 30.
“Our merger into First Merchants provides tremendous benefits to customers, shareholders and communities as we look forward to continuing the exceptional customer service, local responsiveness and strong community engagement that has defined Monroe Bank & Trust for 160 years,” Douglas Chaffin, MBT president and CEO, said in the statement.
“We will never forget our roots, and First Merchants is the perfect partner to continue our legacy of excellence in this market.”
The acquisition brings First Merchants assets to $12 billion, keeping it the state’s second largest Indiana-based financial holding company. It plans to complete the integration of the two companies during the fourth quarter.
With the MBT locations, First Merchants has 130 banking offices in Indiana, Ohio, Michigan and Illinois.
Heartland adds Indy, Columbus offices
A South Bend firm that markets investment opportunities in West Coast and East Coast startups to Midwest companies seeking technological competitive advantage has expanded into Indianapolis and Columbus.
Opening offices in the cities will help Heartland Ventures build more connections between coastal technologies and family-owned companies in Indiana and Ohio, the venture capital firm said in a statement.
Since its 2016 launch, Heartland has facilitated more than 114 startup connections for Midwest companies, raised $15 million and added half a dozen coastal startups to its portfolio.
The new Midwest connections have brought the portfolio companies more than $65 million in revenue. In addition to the South Bend area, Heartland said some of its success has occurred through work in the Fort Wayne area.
“We are committed to building upon the existing momentum that we created in South Bend and Fort Wayne,” Max Brickman, founder and managing director, said in a statement.
“Indiana has been extremely supportive and receptive to our model, and we are excited to continue to grow the corporate innovation ecosystem within the state,” he said.
“With the presence of and great work stemming from players like The Next Level Trust Fund and Salesforce, Indianapolis was the ideal market to expand our operations to,” Brickman said. “We’re excited to help foster a robust pipeline between technology on the coasts and corporations in Indianapolis.”
Heartland has partnered with more than 70 owners, presidents and chief executive officers of Midwest-based companies since its founding.
“I am excited to continue to support the company through its next stage of growth,” Phil Daniels, Heartland adviser and a Springbuk co-founder, said in the statement.
“As a founder and business owner in the Midwest, I was immediately drawn to Heartland’s model of creating a seamless pipeline between innovative technology solutions and corporate pain points.”
Community leadership awards presented
South Bend-based 1st Source Bank honored 11 community volunteers with its Ernestine M. Raclin Community Leadership Award last month, including five from Business Weekly’s reading area.
The award is in its 12th year. The bank established it to honor and encourage volunteerism leadership among businesses and organizations in the communities it serves.
“We are so impressed by our honorees and by all those who were nominated for this year’s consideration,” Christopher Murphy III, chairman and CEO of 1st Source Bank, said in a statement.
“1st Source is thankful for their dedication and commitment to making our local communities better places to live, work, worship and raise families,” he said.
“These individuals, and the many other thousands of volunteers who serve so many good causes, are the backbone of our communities and weave a strong fabric that supports us all. Again, we are so grateful, and their service inspires us to get even more involved.”
The five area volunteers are:
• Chris Straw, president of Team Quality Services, Inc. in Fort Wayne — founder of Launch DeKalb County, which provides scholarships for and encourages high school students to pursue their entrepreneurial spirit, and transformed the DeKalb Show Choir Invitational.
• Daryl Yost, director of community relations at the Northeast Indiana Innovation Center in Fort Wayne — volunteers with Hospice, the Hospice Foundation and the Fort Wayne Philharmonic.
• Cecile Weir, business banker for 1st Source Bank in the Fort Wayne area – volunteers with the YWCA of Northeast Indiana, Brightpoint Development Fund and several professional associations in her community.
• David Hoffert, superintendent of Warsaw Community Schools – volunteers with United Way of Kosciusko County, Region 8 Education Service Center, the Baker Youth Club, Wagon Wheel Center for the Arts, the Kosciusko Chamber of Commerce, the Kosciusko Community YMCA and Orthoworx.
• Dr. Richard Boling, chief medical officer at Boling Vision Center & Insight Surgery Center in Elkhart – provides free eye exams, glasses and surgeries in Elkhart Community Schools and volunteers with Coaches vs. Cancer, Boy Scouts of America, Relay for Life and Riverview Adult Daycare.
In addition to a globe leadership award, honorees received a $1,000 cash award and the bank donated $1,000 each to the local charities of their choice.
Ovation in best practices study
A Fort Wayne-based insurance agency is among 267 independent agencies across the country selected to participate in an Independent Insurance Agents & Brokers of America best practices study group.
Ovation Insurance was selected for participation in the annual study from a field of more than 1,300 nominees.
Study participants must be nominated for it by an IIABA affiliated insurance company or state association and then qualify for it based on outstanding growth, stability, customer retention and financial management.
IIABA started the annual study in 1993 to improve agency performance. Best agency practices are documented for the organization by Reagan Consulting in Atlanta.
Conventions, association functions and agency meetings have offered hundreds of seminars and workshops designed to encourage adoption of the best practices IIABA has documented over the years.
More information on them is available at the Best Practices Gateway website maintained by the Reagan Consulting and IIABA at https://reaganconsulting.com/research/best-practices.