First Merchants Corp. in Muncie, Ind., announced Friday that is planning to exit the Troubled Asset Relief Program using a combination of proceeds from a recent stock offering and a low-interest loan from the Treasury Department's Small Business Lending Fund.
The $4.1 billion company received $116 million of TARP funds in February 2009 and in a news release Chief Financial Officer Mark Hardwick said that the additional capital helped the company weather the recent recession.
He added, however, that First Merchants is pleased to be repaying the investment in full and that will do so with $90.8 million it is to receive from the Small Business Lending Fund and $21.2 million it raised in a direct private placement of its common stock. The company raised the funds by selling more than 2.8 million of its shares at $7.50 each, a slight premium to its Thursday closing price of $7.11.
The $90.1 million First Merchants is receiving from the Small Business Lending Fund is one of the largest awards announced since the Treasury began disbursing the funds in July. First Merchants said it expects the investment to close within two weeks.