EXHIBIT 99.1
News Release
BW Account Number: 1079001
Date: September 2, 2004 5:00 P.M., EST
Contact: James L. Saner, Sr., President & CEO
Mainsource Financial Group (812) 663-0157
MainSource Financial Group
Announces Restructuring -
NASDAQ, MSFG
MainSource Financial Group (NASDAQ:MSFG) announced today that it will merge all
of its Indiana charters into the holding company's lead bank, MainSource Bank,
which is headquartered in Greensburg, Indiana. This consolidation is projected
to be complete by the end of the third quarter of 2005 and will involve Regional
Bank, headquartered in New Albany, Indiana, and its six locations in Clark and
Floyd counties; First Community Bank and Trust, headquartered in Bargersville,
Indiana and its ten locations throughout Jennings, Johnson, Marion and
Bartholomew counties; and Peoples Trust Company, headquartered in Linton,
Indiana, and its seven locations in Greene County. Following consolidation,
MainSource Bank will have a total of 53 offices in 21 Indiana counties with
total assets of approximately $1.4 billion.
James L. Saner, Sr., President and CEO of MainSource Financial Group, stated,
"This consolidation of charters is primarily a result of wanting to create
greater awareness of the beliefs and core values of MainSource Financial Group.
We believe that the consumers of Indiana want a community bank that offers the
finest in products and services without sacrificing the personal touch to which
they have become accustomed. The decision to merge our banks is a direct
response to this need."
Mr. Saner added, "MainSource Bank customers will have more than 50 offices from
which to conduct business as well as access to 53 ATM's throughout Indiana.
What's more, customers can conduct all lines of business in any of our
locations, from traditional banking to insurance, trust and brokerage, making us
the customer's "MainSource" for financial services. The variety of products and
quality of service combined with local decision making, local employees, and a
continued commitment to the communities that we serve is what sets MainSource
apart from other financial providers."
In order to accomplish this goal, MainSource Bank will undergo a complete
management restructuring over the course of the next twelve months. This
management structure will include geographical segmentation of the offices and
will provide each defined area with a senior management team led by a Region
President. This team will provide local decisions and personalized service to
the customers and employees of each office. In addition, MainSource Bank will
continue to capitalize on the efficiencies of centralized processes, such as
loan support, Marketing and Training efforts as well as Human Resources,
Accounting, Audit, Information Technology and other operational functions.
Mr. Saner stated, "Daryl R. Tressler, Chairman, President and CEO of MainSource
Bank, will continue to serve as Chairman and CEO of the bank following
consolidation. Michael K. Bauer, presently Chairman, President and CEO of
Regional Bank, will assume the duties of Executive Vice President for MainSource
Bank as well as Region President for the Bank's southern area. In addition, the
board members from each affiliate will form the MainSource Bank board. We feel
it is important to continue to have input from all of the areas that we serve in
order to stay abreast of the local needs and opportunities."
Mr. Tressler stated, "We are preserving most of the current management teams
from each affiliate and will take advantage of their strengths. The new
management team will be able to stay in touch with their customers and local
communities. To be involved in the restructuring of this company is an exciting
opportunity and one that our staff has embraced. We are determined to retain our
community banking philosophy because we believe it is the cornerstone of our
success."
The cost of the restructuring will be approximately $1.2 million, consisting
primarily of costs associated with converting to a common data processing
system, contract termination penalties, signage and equipment obsolescence, and
some related personnel costs. These costs will be incurred beginning in the
fourth quarter of 2004 through the third quarter of 2005. Approximately $500,000
will be recognized in the fourth quarter of 2004, $200,000 in the first quarter
of 2005, and the remainder in the third quarter of 2005.
The Company anticipates ongoing annualized savings of $1.4 million once the
restructuring is complete. While a small amount of these savings will begin to
be realized in the fourth quarter of 2004, the consolidation is expected to
generate $750,000 of savings in 2005 with the full $1.4 million being realized
in 2006.
This consolidation will allow all of the Company's locations to be identified
with the MainSource brand, making it easier to gain awareness of its non-banking
lines of business such as insurance, trust and brokerage. For this reason,
MainSource Financial Group will also be changing the name of its Illinois
affiliate, Capstone Bank, to MainSource Bank of Illinois before the end of 2004.
This name change will not result in a consolidation of charters, but will better
associate the banking affiliate with the holding company. Capstone Bank will not
take part in the aforementioned management restructuring.
MainSource Financial Group, Inc., headquartered in Greensburg, Indiana, is
listed on the NASDAQ Stock Market (trading symbol: MSFG) and is a
community-focused, multi-bank, financial services oriented holding company with
assets of $1.6 billion. Through its five banking subsidiaries, First Community
Bank and Trust, Bargersville, Indiana; MainSource Bank, Greensburg, Indiana;
Peoples Trust Company, Linton, Indiana; Regional Bank, New Albany, Indiana; and
Capstone Bank, Watseka, Illinois, it operates 56 offices in 22 Indiana counties
and six offices in three Illinois counties. Through its insurance subsidiary,
MainSource Insurance, it operates eight offices in Indiana as well as one in
Owensboro, Kentucky.
Forward-Looking Statements
Except for historical information contained herein, the discussion in this press
release may include certain forward-looking statements based upon management
expectations. Factors which could cause future results to differ from these
expectations include the following: general economic conditions; legislative and
regulatory initiatives; monetary and fiscal policies of the federal government;
deposit flows; the costs of funds; general market rates of interest; interest
rates on competing investments; demand for loan products; demand for financial
services; changes in accounting policies or guidelines; and changes in the
quality or composition of the Company's loan and investment portfolios.
The forward-looking statements included in the press release relating to certain
matters involve risks and uncertainties, including anticipated financial
performance, business prospects, and other similar matters, which reflect
management's best judgment based on factors currently known. Actual results and
experience could differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements as a result
of a number of factors, including but not limited to, those discussed in the
press release.
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MainSource Financial Group, 201 N. Broadway, P.O. Box 87, Greensburg, IN 47240