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NEWS RELEASE
DATE: September 28, 2005 5:00 p.m. E.S.T.
CONTACT: James L. Saner, Sr. President and CEO
MainSource Financial Group 812-663-0157
Ronald B. Scott President and CEO
Peoples Ohio Financial Corporation 937-339-5000
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MainSource Financial Group and Peoples Ohio Financial Corporation
Announce Definitive Agreement
MainSource Financial Group, Inc., Greensburg, Indiana (Nasdaq: MSFG)
("MainSource"), and Peoples Ohio Financial Corporation, Troy, Ohio (OTC: POHF)
("Peoples"), today jointly announced that they have entered into a definitive
agreement to merge Peoples into MainSource. Peoples' subsidiary bank, Peoples
Savings Bank of Troy ("Peoples Savings"), will be merged simultaneously into a
newly-formed subsidiary of MainSource.
The Agreement provides that shareholders of Peoples will have the right to elect
to receive cash in the approximate amount of $5.60 per share, or approximately
0.3068 shares of MainSource common stock (valued at $5.60, based on MainSource's
September 27, 2005 closing price) for each share of Peoples common stock owned
by them. Based on MainSource's September 27, 2005 closing price and including
the anticipated cash out of certain Peoples stock options, the transaction value
is estimated at $41,750,000.
The amount of cash or stock payable to Peoples' shareholders may be adjusted at
the time of closing based on the value of Peoples' consolidated shareholders'
equity as of the end of the month prior to closing, after certain adjustments
prescribed by the agreement have been made, and the closing price of
MainSource's common stock prior to closing. However, 75% of the aggregate
consideration must be paid in shares of MainSource common stock, and there may
be allocations of cash or stock made to shareholders (on the basis of the
smallest to the largest shareholders) to ensure that this requirement is
satisfied.
The transaction, which is expected to close in the first quarter of 2006, is
subject to various regulatory approvals and the approval of Peoples'
shareholders.
The transaction is expected to be accretive to MainSource's earnings per share
during the first full year following the transaction. The transaction will allow
MainSource to establish a presence in west central Ohio. MainSource plans to
continue to operate all of Peoples' current offices under the new name
"MainSource Bank - Ohio."
James L. Saner, Sr., President and Chief Executive Officer of MainSource stated,
"This is our company's first venture into Ohio, and we could not have partnered
with a better bank that epitomizes the community bank philosophy. This
Philosophy is demonstrated every day by the way Peoples takes care of its
customers and its communities." He added, "We are committed to local
decision-making and we stand firm on our commitment to our community banking
philosophy. Our current structure emphasizes regionalized management by local
employees, which serves as a cornerstone for MainSource."
Under the Agreement, Ronald B. Scott will remain as President and CEO of the
newly-named entity, and will maintain his office in the current Troy, Ohio
office of Peoples Savings in order to serve current Peoples Savings customers.
Ronald B. Scott, President and Chief Executive Officer of Peoples, stated, "We
believe that Peoples is a good fit with MainSource. As an organization,
MainSource does small town, community banking on a larger scale. It is a
financial services holding company comprised of smaller community banks which
together can be more competitive."
MainSource Financial Group, Inc., headquartered in Greensburg, Indiana, is a
community-focused, financial services holding company with assets of
approximately $1.7 billion. Through its three banking subsidiaries, MainSource
Bank, Greensburg, Indiana; Peoples Trust Company, Linton, Indiana; and
MainSource Bank of Illinois, Kankakee, Illinois, it operates 55 offices in 23
Indiana counties and six offices in three Illinois counties. Through its
non-banking subsidiaries, MainSource Insurance LLC, MainSource Title LLC and
MainSource Mortgage LLC, it provides various related financial services through
its banking affiliates.
Peoples Ohio Financial Corporation was formed in 2002 and acquired all the
shares of Peoples Savings Bank of Troy. Peoples Savings has been headquartered
in Troy, Ohio since its establishment in 1890 and operates six offices located
in Miami and Northern Montgomery Counties. Peoples had $199.9 million in total
assets and $25.4 million in total shareholders' equity and equity from ESOP
shares as of June 30, 2005.
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 MainSource's loan and investment portfolios; the
timing of the closing of the transaction; the timing and success of integration
efforts once the transaction is complete; MainSource's expectations or ability
to realize success with the acquisition of Peoples, and the impact of this
transaction, if successful, on MainSource's business.
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.
MainSource will be filing a Registration Statement on Form S-4 concerning the
merger with the Securities and Exchange Commission ("SEC"), which will include
the proxy statement that will be mailed to Peoples' shareholders. WE URGE
INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain the documents free of charge, when filed, at
the SEC's website, www.sec.gov. In addition, documents filed with the SEC by
MainSource will be available free of charge from the Secretary of MainSource at
201 N. Broadway, P.O. Box 87, Greensburg, IN 47240, telephone (812) 663-0157.
Documents filed with the SEC by Peoples will be available free of charge from
the Secretary of Peoples at 635 South Market Street, Troy, Ohio, telephone (937)
339-5000. INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY BEFORE MAKING A
DECISION CONCERNING THE MERGER. Copies of all recent proxy statements and annual
reports are also available free of charge from the respective companies by
contacting the company secretary.
MainSource and Peoples and their respective directors and executive officers may
be deemed to be participants in the solicitation of proxies to approve the
Merger. INFORMATION ABOUT THE PARTICIPANTS MAY BE OBTAINED THROUGH THE SEC'S
WEBSITE FROM THE DEFINITIVE PROXY STATEMENT FILED WITH THE SEC ON APRIL 29,
2005, WITH RESPECT TO MAINSOURCE AND THE DEFINITIVE PROXY STATEMENT FILED WITH
THE SEC ON SEPTEMBER 24, 2004, WITH RESPECT TO PEOPLES.
For more information contact:
* * * * *
MainSource Financial Group, 201 N. Broadway, P.O. Box 87, Greensburg, IN 47240
or
Peoples Ohio Financial Corporation, 635 South Market Street, Troy, Ohio 45373