CHARLESTON, W.Va. - City Holding Co. has signed a definitive agreement to acquire First Merchants Bancorp, Montgomery, W.Va.
The $898 million-asset City will exchange 1.6 shares of its common stock for each of the 576,000 shares of First Merchants. The acquisition has been approved by the directors of both institutions and awaits approval by shareholders and regulators.
As part of the transaction, First Merchants, which holds $115 million of assets, has granted City an option to buy new common stock equal to 19.9% of First Merchants' shares outstanding for $45.60 a share. The option can be exercised if, among other things, First Merchants is acquired by another party or if another party purchases 9.9% or more of First Merchant's common stock.
Nine months ago, City lost its bid to acquire Lincoln Savings Bank of Carnegie, Pa., when Pittsburgh-based Integra Financial Corp., which at the time owned about 5% of the thrift, objected to the merger and acquired Lincoln.