German American Bancorp, Inc. (NASDAQ: GABC) ("German American")
and Citizens First Corporation, Bowling Green, Kentucky (NASDAQ:
CZFC) ("Citizens First"), announced today that they have entered
into a definitive agreement to merge Citizens First into German
American. Upon completion of the transaction, Citizens First’s
subsidiary bank, Citizens First Bank, Inc., will be merged into
German American's subsidiary bank, German American Bank.
Under terms of the definitive agreement,
Citizens First common shareholders (excluding 401(k) shareholders)
will receive a fixed exchange ratio of 0.6629 shares of German
American common stock for each share of Citizens First in a tax
free exchange, and a cash payment of $5.80 per Citizens First
share. Shareholders who hold Citizens First common shares in the
Citizens First Bank 401(k) Profit Sharing Plan will receive a cash
payment equal to $5.80 plus the exchange ratio multiplied by the
20-day volume weighted average price of German American’s common
shares on the second day prior to closing (provided that such
average price will not be less than the closing price of German
American’s common shares on the last trading day preceding the
closing). After completion of the merger, it is anticipated that
one board member of Citizens First will be joining the board of
German American. In addition, German American will add M.
Todd Kanipe, President & CEO of Citizens First, as a Regional
President in the combined institution, as well as all three of the
additional Citizens First executive officers in regional roles
similar to their current positions.
Based upon the $31.59 per share closing price of
German American’s common shares ending on February 20, 2019, the
transaction has a value of $26.74 per Citizens First common share.
Because a portion of the consideration to be received is German
American's common stock, the stock portion of the transaction value
will fluctuate until closing together with the market price of
German American's common shares.
Based on the number of Citizens First common
shares expected to be outstanding at closing, German American would
issue approximately 1.7 million shares of its common stock, and pay
approximately $16 million cash, for all of the issued and
outstanding common shares of Citizens First. Based upon the $31.59
per share price of German American’s common shares ending on
February 20, 2019, the transaction has an aggregate indicated value
of approximately $68.2 million, with the total merger consideration
being split between stock and cash on an approximate 77:23
basis.
Mark A. Schroeder, Chairman and CEO of German
American, stated, "We are excited to welcome Citizens First
customers and team members to the German American family. Citizens
First has built a solid and growing community banking franchise
through which German American can provide our extensive offerings
of banking, insurance, and investment products and services to
Citizens First’s current and prospective clients. The acquisition
furthers our expansion into vibrant Kentucky markets and
strengthens our local presence in the Bowling Green market area,
which has demonstrated a history of dynamic growth and
prosperity.”
Schroeder continued, “We expect that this
strategic transaction will be accretive to German American's
earnings per share during the twelve months following completion of
the transaction, and will have a rapid tangible book value earn
back, within approximately one year following completion of the
merger. German American's pro forma capital ratios will continue to
significantly exceed regulatory well-capitalized levels, enabling
us to continue to take advantage of future growth opportunities in
Kentucky and throughout our existing Southern Indiana market
area."
Todd Kanipe, President & CEO of Citizens
First, stated, "We are very pleased to partner with a quality
institution like German American, which has a demonstrated
commitment to the community bank business model, centered around
exceptional customer service. Through this business
combination, we will be able to offer an improved suite of products
to our existing customers and continue to build relationships
across our market geography. I am confident that this
partnership is strategically and culturally compelling to both
parties, and we are excited about the future of the combined
company.
German American is consistently among the
nation’s best-performing community banking organizations, and their
NASDAQ listed stock provides our shareholders with improved
liquidity and flexibility. Our customers, employees, communities
and shareholders will immediately benefit from German American's
reputation, financial strength and capabilities."
The transaction is expected to be completed in
the third quarter of 2019. Completion of the transaction is subject
to approval by regulatory authorities and Citizens First's
shareholders, as well as certain other closing conditions. In
connection with the definitive agreement, German American entered
into voting agreements with each member of the Citizens First board
of directors, who collectively hold approximately 8% of the
outstanding shares of Citizens First common stock. Subject to the
terms and conditions of the voting agreements, the Citizens First
directors have agreed to vote their shares in favor of the
transactions contemplated by the definitive agreement.
Sandler O’Neill & Partners, L.P. served as
financial advisor on the transaction to German American and Bingham
Greenebaum Doll LLP served as legal counsel.
Keefe, Bruyette & Woods served as financial
advisor on the transaction to Citizens First, Inc. and Wyatt,
Tarrant & Combs, LLP served as legal advisor.
Additional Information
Communications in this press release do not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any proxy vote or approval. The
proposed merger will be submitted to the Citizens First
shareholders for their consideration. In connection with the
proposed merger, German American will file a Registration Statement
on Form S-4 with the Securities and Exchange Commission (“SEC”)
that will include a proxy statement for Citizens First and a
prospectus for German American and other relevant documents
concerning the proposed merger. INVESTORS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE CORRESPONDING PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES
AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS TO THOSE
DOCUMENTS, AS THEY WILL CONTAIN IMPORTANT INFORMATION. You will be
able to obtain a copy of the proxy statement/prospectus once filed,
as well as other filings containing information about German
American, without charge, at the SEC's website (http://www.sec.gov)
or by accessing German American’s website
(http://www.germanamerican.com) under the tab “Investor Relations”
and then under the heading “Financial Information”. Copies of the
proxy statement/prospectus and the filings with the SEC that will
be incorporated by reference in the proxy statement/prospectus can
also be obtained, without charge, by directing a request to Terri
A. Eckerle, Shareholder Relations, German American Bancorp, Inc.,
711 Main Street, Box 810, Jasper, Indiana 47546, telephone
812-482-1314 or to M. Todd Kanipe, President and CEO, Citizens
First Corporation, 1065 Ashley Street, Bowling Green, Kentucky
42103, telephone 270-393-0700.
German American and Citizens First and certain
of their directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of Citizens First in connection with the proposed merger.
Information about the directors and executive officers of German
American is set forth in the proxy statement for German American’s
2018 annual meeting of shareholders, as filed with the SEC on
Schedule 14A on March 26, 2018, which information has been updated
by German American from time to time in subsequent filings with the
SEC. Information about the directors and executive officers of
Citizens First is set forth in the proxy statement for Citizens
First’s 2018 annual meeting of shareholders, as filed with the SEC
on Schedule 14A on March 29, 2018. Additional information about the
interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the
proxy statement/prospectus regarding the proposed merger when it
becomes available. Free copies of this document may be obtained as
described above.
Forward-Looking Statements
This press release contains forward-looking
statements made pursuant to the safe-harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements can often, but not always, be identified
by the use of words like “believe”, “continue”, “pattern”,
“estimate”, “project”, “intend”, “anticipate”, “expect” and similar
expressions or future or conditional verbs such as “will”, would”,
“should”, “could”, “might”, “can”, “may”, or similar expressions.
These forward-looking statements include, but are not limited to,
statements relating to the expected timing and benefits of the
proposed merger (the “Merger”) between German American and Citizens
First, including future financial and operating results, cost
savings, enhanced revenues, and accretion/dilution to reported
earnings that may be realized from the Merger, as well as other
statements of expectations regarding the Merger, and other
statements of German American’s goals, intentions and expectations;
statements regarding German American’s business plan and growth
strategies; statements regarding the asset quality of German
American’s loan and investment portfolios; and estimates of
German American’s risks and future costs and benefits, whether with
respect to the Merger or otherwise.
These forward-looking statements are subject to
significant risks, assumptions and uncertainties that may cause
results to differ materially from those set forth in
forward-looking statements, including, among other things: the risk
that the businesses of German American and Citizens First will not
be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; expected revenue
synergies and cost savings from the Merger may not be fully
realized or realized within the expected time frame; revenues
following the Merger may be lower than expected; customer and
employee relationships and business operations may be disrupted by
the Merger; the ability to obtain required regulatory approvals or
the approval of Citizens First’s shareholders, and the ability to
complete the Merger on the expected timeframe; the costs and
effects of litigation and the possible unexpected or adverse
outcomes of such litigation; possible changes in economic and
business conditions; the existence or exacerbation of general
geopolitical instability and uncertainty; the ability of German
American to complete integration and attract new customers;
possible changes in monetary and fiscal policies, and laws and
regulations; the effects of easing restrictions on participants in
the financial services industry; the cost and other effects of
legal and administrative cases; possible changes in the
creditworthiness of customers and the possible impairment of
collectability of loans; fluctuations in market rates of interest;
competitive factors in the banking industry; changes in the banking
legislation or regulatory requirements of federal and state
agencies applicable to bank holding companies and banks like German
American’s affiliate bank; continued availability of earnings and
excess capital sufficient for the lawful and prudent declaration of
dividends; changes in market, economic, operational, liquidity,
credit and interest rate risks associated with German American’s
business; and other risks and factors identified in German
American’s filings with the Securities and Exchange Commission.
Neither German American nor Citizens First undertakes any
obligation to update any forward-looking statement, whether written
or oral, relating to the matters discussed in this press release.
In addition, German American’s and Citizens First’s past results of
operations do not necessarily indicate either of their anticipated
future results, whether the Merger is effectuated or not.
About German American
German American Bancorp, Inc. is a NASDAQ-traded
(symbol: GABC) bank holding company based in Jasper, Indiana.
German American, through its banking subsidiary German American
Bank, operates 65 banking offices in 20 contiguous southern Indiana
counties and four counties in Kentucky. The Company also owns an
investment brokerage subsidiary (German American Investment
Services, Inc.) and a full line property and casualty insurance
agency (German American Insurance, Inc.). At December 31,
2018, German American reported total assets of approximately $3.9
billion, total loans of approximately $2.7 billion, and total
deposits of approximately $3.1 billion.
About Citizens First
Citizens First Corporation is a bank holding
company headquartered in Bowling Green, Kentucky and established in
1999. The Company has branch offices located in Barren, Hart,
Simpson and Warren Counties in Kentucky, and a loan production
office in Williamson County, Tennessee. At December 31, 2018,
Citizens First reported total assets of approximately $476 million,
total loans of approximately $372 million, and total deposits of
approximately $389 million.
For additional information, contact:Mark A
Schroeder, Chief Executive Officer of German American
Bancorp, Inc.Bradley M Rust, Executive Vice
President/CFO of German American Bancorp, Inc.(812) 482-1314
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