UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: August 1, 1996
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FIRST MERCHANTS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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INDIANA 0-17071 35-1544218
(State of Incorporation) (SEC File No.) (IRS Employer ID No.)
200 East Jackson Street
P.O. Box 792
Muncie, Indiana 47305-2814
(Address of Principal Executive Offices)
(317) 747-1500
(Registrant's Telephone Number)
Page 1 of 12 Pages
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired. As referenced in the
Current Report on Form 8-K filed with the Securities and Exchange Commission
(the "Commission") on August 15, 1996, it was impracticable for First Merchants
Corporation to provide the Union National Bancorp financial statements as of and
for the period ended June 30, 1996 at the time of the filing of the Current
Report on Form 8-K. Accordingly, as provided by Item 7(a)(4) of Form 8-K, First
Merchants Corporation hereby submits the following financial statements for
Union National Bancorp:
(vii) Consolidated Condensed Balance Sheet as of June 30, 1996
(unaudited)
(viii) Consolidated Condensed Statement of Income for the six (6) months
ended June 30, 1996 and 1995 (unaudited)
(ix) Consolidated Condensed Statement of Changes in Stockholders'
Equity for the six (6) months ended June 30, 1996 (unaudited)
(x) Consolidated Condensed Statement of Cash Flows for the six (6)
months ended June 30, 1996 and 1995 (unaudited)
(xi) Notes to Consolidated Condensed Financial Statements (unaudited)
(b) Pro Forma Financial Information. As referenced in the Current Report
on Form 8-K filed with the Commission on August 15, 1996, it was impracticable
for First Merchants Corporation to provide the pro forma condensed combined
financial information as of and for the period ended June 30, 1996 at the time
of the filing of the Current Report on Form 8-K. Accordingly, as provided by
Item 7(a)(4) and Item 7(b)(2) of Form 8-K, First Merchants Corporation hereby
submits the following pro forma financial information:
(ii) Pro Forma Condensed Combined Financial Information including
Balance Sheet as of June 30, 1996 and Statement of Income for the
six (6) months ended June 30, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 14, 1996.
FIRST MERCHANTS CORPORATION
By /s/ Larry R. Helms
--------------------------------
Larry R. Helms
Senior Vice President
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UNION NATIONAL BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
June 30 1996
- --------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 3,627
Investment securities
Available for sale 56,984
Held to maturity 3,025
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Total investment securities 60,009
Loans 99,170
Allowance for loan losses (1,047)
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Net loans 98,123
Premises and equipment 3,021
Other assets 2,795
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Total assets $167,575
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LIABILITIES
Deposits
Noninterest bearing $ 8,636
Interest bearing 127,215
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Total deposits 135,851
Short-term borrowings 5,274
Federal Home Loan Bank advances 9,000
Other liabilities 1,609
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Total liabilities 151,734
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $5 stated value
Authorized - 200,000 shares
Issued and outstanding - 193,968 970
Paid-in capital 1,957
Retained earnings 12,800
Net unrealized gain on securities available for sale 114
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Total stockholders' equity 15,841
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Total liabilities and stockholders' equity $167,575
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See notes to consolidated condensed financial statements.
4
UNION NATIONAL BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
Six Months Ended June 30 1996 1995
- --------------------------------------------------------------------------------
INTEREST INCOME
Loans receivable $ 3,969 $ 3,581
Investment securities
Taxable 1,611 1,412
Tax exempt 400 467
Federal funds sold 13 38
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Total interest income 5,993 5,498
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INTEREST EXPENSE
Deposits 3,145 2,969
Short-term borrowings 80 45
Federal Home Loan Bank advances 242 234
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Total interest expense 3,467 3,248
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NET INTEREST INCOME 2,526 2,250
Provision for loan losses 170 211
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,356 2,039
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OTHER INCOME
Service charges on deposit accounts 163 143
Net realized gains on sales of securities 24 22
Other income 52 30
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Total other income 239 195
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OTHER EXPENSES
Salaries and employee benefits 888 802
Premises and equipment expenses 223 201
Data processing fees 101 89
Deposit insurance expense 1 136
Other expenses 233 127
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Total other expenses 1,446 1,355
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INCOME BEFORE INCOME TAX 1,149 879
Income tax expense 333 205
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NET INCOME $ 816 $ 674
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NET INCOME PER SHARE $ 4.21 $ 3.47
Weighted Average Shares Outstanding 193,968 194,302
See notes to consolidated condensed financial statements.
5
UNION NATIONAL BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
1996 1995
- --------------------------------------------------------------------------------
Balances, January 1 $ 15,741 $ 13,409
Net income 816 674
Cash dividends (135) (136)
Stock redeemed (26)
Net change in unrealized gain (loss) on securities
available for sale
(581) 597
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Balances, June 30 $ 15,841 $ 14,518
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See notes to consolidated condensed financial statements.
6
UNION NATIONAL BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Six Months Ended June 30 1996 1995
- --------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income $ 816 $ 674
Adjustments to reconcile net income to net cash
provided by operating activities
Provision for loan losses 170 211
Depreciation and amortization 112 101
Investment securities amortization (accretion), net (109) 14
Investment securities gains (24) (22)
Net change in
Other assets (165) 298
Other liabilities 401 13
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Net cash provided by operating activities 1,201 1,289
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INVESTING ACTIVITIES
Purchase of securities available for sale (7,644) (9,612)
Proceeds from sales of securities available for sale 1,049
Proceeds from maturities of securities
available for sale 7,819 4,500
Purchase of securities held to maturity (286) (1,655)
Proceeds from sales of securities held to maturity 380
Proceeds from maturities of securities held to maturity 527 685
Net change in loans (8,736) (4,056)
Purchase of premises and equipment (106) (28)
Other investing activities 93
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Net cash used by investing activities (7,284) (9,786)
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FINANCING ACTIVITIES
Net change in
Deposits 3,512 5,723
Short-term borrowings 1,872 2,395
FHLB advances 1,000
Cash dividends (135) (136)
Stock redeemed (26)
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Net cash provided by financing activities 6,249 7,956
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 166 (541)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,461 3,663
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CASH AND CASH EQUIVALENTS, END OF YEAR $ 3,627 $ 3,122
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See notes to consolidated condensed financial statements.
7
UNION NATIONAL BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1: General
The significant accounting policies followed by Union National Bancorp
(Corporation) and its wholly owned subsidiary for interim financial reporting
are consistent with the accounting polices followed for annual financial
reporting. All adjustments which are in the opinion of management necessary for
a fair statement of the results for the period reported have been included in
the accompanying consolidated financial statements.
Note 2: Acquisition
On August 1, 1996, First Merchants Corporation of Muncie, Indiana (First
Merchants) acquired all of the assets of the Corporation through the merger of
the Corporation with and into First Merchants. Pursuant to the terms of the
merger agreement, stockholders of the Corporation receive 4.86 shares of First
Merchants common stock for each share of the Corporation common stock held.
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PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined condensed balance sheet as of June
30, 1996, and the pro forma combined condensed statement of income for the year
ended June 30, 1996, give effect to the Merger based on the historical
consolidated financial statements of First Merchants Corporation ("First
Merchants") and its subsidiaries and the historical consolidated financial
statements of Union National Bancorp ("Union National") and its subsidiary under
the assumptions and adjustments set forth in the accompanying notes to the pro
forma financial statements.
The pro forma financial statements have been prepared by the managements of
First Merchants and Union National based upon their respective financial
statements. These pro forma statements, which include results of operations as
if the Merger had been consummated at the beginning of each period presented,
may not be indicative of the results that actually would have occurred if the
Merger had been in effect on the dates indicated or which may be obtained in the
future.
The following pro forma combined condensed balance sheet and condensed
statements of income include:
(a) First Merchant's historical consolidated financial information.
(b) Union National's historical consolidated financial information.
(c) The combined statements of First Merchants and Union National,
which have been designated herein as "First Merchants/Union
National Pro Forma Combined."
(d) Randolph County Bancorp's ("Randolph County") historical
consolidated financial information, which has been designated
herein as "Randolph County." On October 2, 1996, First Merchants
acquired for shares of First Merchants common stock, all of the
issued and outstanding common stock of Randolph County. The
transaction will be accounted for as a pooling of interests;
accordingly, historical financial data for Randolph County is
included for all periods presented.
(e) The combined statements of First Merchants, Union National and
Randolph County which have been designated herein as "Pro Forma
Combined."
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PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
(IN THOUSANDS)
(a) (b) (c) (d) (e)
Pro Forma First Merchants/ Pro Forma
Adjustments Union National Adjustments
First Union Increase Pro Forma Randolph Increase Pro Forma
Merchants National (Decrease) Combined County (Decrease) Combined
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Assets:
Cash and due from banks $ 31,106 $ 3,627 $ 34,733 $ 2,067 $ 36,800
Federal funds sold 15,100 15,100 15,100
Interest- bearing deposits 107 107
Investment securities:
Available for sale 145,992 56,984 202,976 24,271 227,247
Held to maturity 51,015 3,025 54,040 54,040
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Total investment securities 197,007 60,009 257,016 24,271 281,287
Loans 439,926 99,170 539,096 44,829 583,925
Allowance for loan losses (4,919) (1,047) (5,966) (665) (6,631)
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Net loans 435,007 98,123 533,130 44,164 577,294
Premises and equipment 10,467 3,021 13,488 1,273 14,761
Goodwill 1,780 1,780 1,780
Other assets 13,742 2,795 16,537 1,415 17,952
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Total Assets $ 704,209 $167,575 $871,784 $ 73,297 $ 945,081
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Liabilities:
Deposits $ 574,225 $ 135,851 $ 710,076 $ 62,388 $ 772,464
Short-term borrowings 41,611 5,274 46,885 1,500 48,385
Federal Home Loan Bank
advances 9,000 9,000 9,000
Other liabilities 5,872 1,609 7,481 470 7,951
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Total Liabilities 621,708 151,734 773,442 64,358 837,800
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Stockholders' equity:
Common stock 633 970 (852)(1) 751 2,756 (2,686) (2) 821
Additional paid-in capital 16,132 1,957 852 (1) 18,941 709 2,686 (2) 22,336
Retained earnings 65,971 12,800 78,771 5,593 84,364
Net unrealized gain (loss) on
securities available for sale (235) 114 (121) (119) (240)
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Total Stockholders' Equity 82,501 15,841 98,342 8,939 107,281
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Total Liabilities and
Stockholders' Equity $ 704,209 $ 167,575 $ 871,784 $ 73,297 $ 945,081
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See notes to pro forma combined condensed balance sheet.
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NOTES TO PRO FORMA COMBINED CONDENSED BALANCE SHEET (Unaudited)
The following pro forma adjustments are necessary to record the Mergers.
[1] To reflect exchange of shares of Union National common stock for shares of
First Merchants common stock, retaining the historical cost basis of
assets, liabilities and equity through the treatment as a pooling of
interest. A total of 942,685 shares of First Merchants common stock were
issued at the exchange ratio of 4.86 shares of First Merchants common
stock for each of the 193,968 issued and outstanding shares of Union
National common stock as of June 30, 1996, resulting in a transfer from
common stock to additional paid-in capital of $852,000 to reflect the
decrease in the aggregate par value of the issued and outstanding shares of
First Merchants common stock relative to the aggregate par value of the
currently outstanding shares of Union National common stock.
Common stock $ (852)
Additional paid-in capital $ 852
[2] To reflect exchange of shares of Randolph County common stock for shares of
First Merchants common stock, retaining the historical cost basis of
assets, liabilities and equity through the treatment as a pooling of
interest. A total of 565,705 shares of First Merchants common stock were
isssued at the exchange ratio of 20.53 shares of First Merchants common
stock for each of the 27,555 issued and outstanding shares of Randolph
County common stock as of June 30, 1996, resulting in a transfer from
common stock to additional paid-in capital of $2,686,000 to reflect the
decrease in the aggregate par value of the issued and outstanding shares
of First Merchants common stock relative to the aggregate par value of the
currently outstanding shares of Randolph County common stock.
Common stock $ (2,686)
Additional paid-in capital $ 2,686
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PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(a) (b) (c) (d) (e)
Pro Forma First Merchants/ Pro Forma
Adjustments Union National Adjustments
First Union Increase Pro Forma Randolph Increase Pro Forma
Merchants National (Decrease) Combined County (Decrease) Combined
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Interest income $ 25,376 $ 5,993 $ 31,369 $ 2,645 $ 34,014
Interest expense 11,176 3,467 14,643 1,249 15,892
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Net interest income 14,200 2,526 16,726 1,396 18,122
Provision for loan losses 320 170 490 90 580
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Net interest income
after provision
for loan losses 13,880 2,356 16,236 1,306 17,542
Total other income 3,610 239 3,849 120 3,969
Total other expenses 9,546 1,446 10,992 802 11,794
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Income before income
taxes 7,944 1,149 9,093 624 9,717
Income taxes 2,785 333 3,118 198 3,316
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Net income $ 5,159 $ 816 $ 5,975 $ 426 $ 6,401
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Net income per common share $ 1.02 $ 1.00 $ 0.97
Average Shares
Outstanding 5,062,259 6,004,944 6,570,649
12