German American Bancorp, Inc. (Nasdaq:GABC) ("German American")
and River Valley Bancorp. (Nasdaq:RIVR) ("River Valley") announced
today that they have entered into a definitive agreement to merge
River Valley into German American. Upon completion of the
transaction, River Valley’s subsidiary bank, River Valley Financial
Bank, will be merged into German American's similarly-named
subsidiary bank, German American Bancorp.
Under terms of the definitive agreement, River Valley common
shareholders will receive 0.770 shares of German American common
stock for each share of River Valley in a tax free exchange, plus a
cash payment of $9.90 per River Valley share.
Based upon the $30.02 per share 20-day volume weighted average
price of German American's common shares ending on October 22, 2015
(the valuation upon which the exchange ratio was established), the
transaction has a value of $33.00 per River Valley common share.
This represents a premium of 47% over the $22.40 closing price of
River Valley's common shares on October 23, 2015. Because a portion
of the consideration to be received is German American's common
stock, the transaction value will fluctuate until closing together
with the market price of German American's common shares.
Based on River Valley's number of common shares currently
outstanding, German American expects to issue approximately 1.94
million shares of its common stock, and pay approximately $25
million cash, for all of the issued and outstanding common shares
and outstanding options of River Valley.
On this basis, the transaction has an aggregate indicated value
(valuing German American's common shares at the 20-day volume
weighted average price ending on October 22, 2015) of approximately
$83.5 million. The basic transaction value also includes the
approximately $500 thousand in cash payments to be made in
cancellation of stock options.
Mark A. Schroeder, Chairman and CEO of German American, stated,
"This merger with River Valley represents a strategic opportunity
for German American to enhance our previously stated objective of
expanding our Southern Indiana footprint into the vibrant Southeast
Indiana market area. River Valley has built a solid community
banking franchise in three distinct markets in which German
American can provide our extensive offerings of banking, insurance,
and investment products and services to River Valley’s current and
prospective clients.
"The combination of our two organizations expands German
American’s footprint into the greater Madison, Indiana market,
which is very similar to our other heritage markets in Southern
Indiana. Much like German American’s experience within our heritage
markets, River Valley has operated in Madison for over a century
and is a leader in the market from both a business and civic
perspective. Additionally, they have a strong presence with five
banking offices in the vibrant and rapidly growing market area of
the Indiana side of the Louisville, Kentucky MSA, a market which
German American has recently entered with a commercial loan
production office. River Valley also has a presence in the Seymour
and North Vernon, Indiana markets, which match-up very well with
German’s American growing franchise in the adjacent Columbus,
Indiana market. This opportunity to enhance our existing presence
in two of German American’s newest markets in Columbus and New
Albany, Indiana, as well as allowing for a new market presence in
Madison, Indiana makes this merger a perfect fit for our
company.”
Schroeder continued, “We expect that this strategic transaction
will be accretive to German American's earnings per share during
the 12 months following completion of the transaction, and will
have a quick tangible book value earn back. 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 throughout our market area."
Matthew P. Forrester, President & CEO of River Valley,
stated, "We believe German American is an ideal partner for our
bank, and we are delighted to become a part of German American's
organization. Like River Valley, German American is deeply
committed to the communities it serves and through this combination
of our two community-focused organizations, we will be in a
position to better serve our customers through increased
convenience as well as the addition of broader financial services.
German American's reputation, financial strength and capabilities
will enhance our ability to meet the expanding needs of our
customers. Furthermore, our shareholders will be receiving shares
of a strong, successful banking company, with greater market
liquidity and trading volume than the market for our shares."
The transaction is expected to be completed in early 2016.
Completion of the transaction is subject to approval by regulatory
authorities and River Valley's shareholders as well as certain
other closing conditions.
Raymond James & Associates, Inc. served as financial advisor
on the transaction to German American and Bingham Greenebaum Doll
LLP served as legal counsel.
Keefe, Bruyette & Woods, Inc. served as financial advisor on
the transaction to River Valley Bancorp and Barnes & Thornburg
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 River Valley 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 of River Valley and a prospectus of German American
and other relevant documents concerning the proposed merger.
SHAREHOLDERS 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, as well as other filings containing
information about German American and River Valley, without charge,
at the SEC's website (http://www.sec.gov) or, for German American, by
accessing German American’s Web site
(http://www.germanamerican.com) under the tab “Investor Relations”
and then under the heading “Financial Information” and for River
Valley, by accessing River Valley’s Web site
(http://www.rvfbank.com) under the tab “About Us” and then under
the heading “Stock Price & SEC Filings.” Copies of the proxy
statement/prospectus and the filings with the Securities and
Exchange Commission 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 Matthew P. Forrester,
President & CEO, River Valley Bancorp, 430 Clifty Drive,
Madison, Indiana, 47520, telephone 812-273-4949. River Valley and
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of River Valley in connection with the proposed Merger. Information
about the directors and executive officers of River Valley is set
forth in the proxy statement for River Valley’s 2015 annual meeting
of shareholders, as filed with the SEC on a Schedule 14A on March
18, 2015. Additional information regarding 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 in the preceding paragraph.
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 Bancorp,
Inc. (“German American”) and River Valley Bancorp (“River Valley”),
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 River Valley 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 and shareholder
approvals, 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 each of German
American’s and River Valley’s filings with the Securities and
Exchange Commission. Neither German American nor River Valley
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 River Valley’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 financial services holding
company that operates, through its principal banking subsidiary, 37
retail banking offices in 13 southern Indiana counties. German
American also owns a brokerage and financial planning subsidiary,
as well as a full service property and casualty insurance agency.
At September 30, 2015, German American reported total assets of
approximately $2.3 billion, total loans of approximately $1.5
billion, and total deposits of approximately $1.8 billion.
ABOUT RIVER VALLEY
River Valley Bancorp, based in Madison, Indiana operates 14 full
service banking offices through its wholly owned subsidiary, River
Valley Financial Bank, with retail banking offices in Madison,
Hanover, Charlestown, Sellersburg, Floyds Knobs, New Albany,
Dupont, North Vernon, Seymour, Osgood, and Jeffersonville, Indiana
and in Carrollton, Kentucky. At September 30, 2015, River Valley
reported total assets of approximately $514 million, total loans of
approximately $330 million, and total deposits of approximately
$401 million.
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version on businesswire.com: http://www.businesswire.com/news/home/20151026006569/en/
German American Bancorp, Inc.Investor Contacts:Mark A.
Schroeder, Chairman & CEOBradley M. Rust, Executive Vice
President/CFO812-482-1314orMedia Contacts:Mark A. Schroeder,
Chairman & CEOClay W. Ewing, President812-482-1314orRiver
Valley BancorpInvestor & Media Contact:Matthew P. Forrester,
President & CEO812-273-4949
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