Lincoln Bancorp (LNCB) to Merge Into First Merchants (FRME)

September 3, 2008 8:54 AM EDT

First Merchants Corporation (NASDAQ: FRME) and Lincoln Bancorp (NASDAQ: LNCB) today announced they have executed a definitive agreement for First Merchants Corporation to acquire Lincoln Bancorp through a merger of Lincoln into First Merchants.

First Merchants and Lincoln will have combined assets of $4.7 billion and create the largest financial holding company based in Central Indiana. The combined company will have eighty-two banking offices in twenty-three Indiana and three Ohio counties, a trust company with assets under management in excess of $1.7 billion, and a multi-line insurance agency.

The merger agreement provides that shareholders of Lincoln will have the right to elect to receive cash in the approximate amount of $15.76 per share, or 0.7004 shares of First Merchants common stock for each share of Lincoln common stock owned by them, subject to proration as a result of a maximum limit on the aggregate number of shares issued or cash paid to all Lincoln shareholders. Based on First Merchants' September 2, 2008 closing price, the transaction value is estimated between $74 million and $77 million depending on the elections of shareholders.

The transaction is expected to be completed in Q408.

Lincoln Bancorp operates as the holding company for Lincoln Bank, which provides commercial banking services in Indiana.

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