First Merchants in Muncie, Ind., has agreed to buy Community Bancshares in Noblesville, Ind.

The $5.5 billion-asset First Merchants said in a press release Tuesday that it will pay $46 million in cash and stock for the parent of the $272 million-asset Community Bank. The deal is expected to close in the first quarter of next year.

"The addition of Community Bank supports our goal of becoming a more efficient, higher performing company," Michael Rechin, First Merchants' president and chief executive, said in the release. "Community Bank franchise will add seven locations to our six banking centers in Hamilton County, the fastest-growing Indiana market."

First Merchants said it expects the deal to add to its earnings per share in the first full year. The company plans to earn back any dilution of tangible book value within four years. First Merchants said it expects 40% cost savings, which could include branch closings.

Bingham Greenebaum Doll represented First Merchants. SunTrust Robinson Humphrey provided Community Bancshares with a fairness opinion. Krieg DeVault also advised the seller.

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