Special to the Tribune-Star
Evansville-based Old National Bancorp will acquire Fort Wayne-based Tower Financial Corp. through a stock and cash merger.
With nearly $680.9 million in total assets, and an additional $523.3 million in trust assets under management, Tower Financial Corp. is an Indiana bank holding company with Tower Bank & Trust Company (Tower Bank) as its wholly-owned subsidiary. Tower Bank currently operates six full-service banking centers in Fort Wayne and one in Warsaw, with total deposits of $581.6 million and $438.6 million in loans.
Tower Bank is the largest independent bank headquartered in Fort Wayne.
Founded in Evansville in 1834, with $9.6 billion in assets and 176 branches, Old National is the largest financial services holding company headquartered in Indiana.
This acquisition will strengthen Old National’s position to the third largest deposit holder in Indiana. Old National also has branches in Southern Illinois, Western Kentucky and Louisville, and Southwestern Michigan.
Under the terms of the merger agreement, shareholders of Tower Financial Corp. will receive 1.20 shares of Old National Bancorp common stock and $6.75 in cash (fixed) for each share of Tower Financial common stock.
Based upon the Sept. 5, 2013, closing price of $13.52 per share of Old National common stock, the transaction is valued at approximately $107.7 million. The transaction value is likely to change due to fluctuations in the price of Old National common stock.
As provided in the merger agreement, the exchange ratio is subject to adjustment (calculated prior to closing) in the event shareholders’ equity of Tower Financial Corporation is below a specified amount.
The transaction is expected to close in the first quarter of 2014. The transaction remains subject to approval by federal and state regulatory authorities and Tower Financial Corp. shareholders, as well as the satisfaction of other closing conditions provided in the merger agreement.
The merger agreement also provides that Tower Bank will be merged into Old National Bank.