FirstMerit buying 24 branches of First Bank

AP News
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Posted: Nov 11, 2009 3:46 PM

FirstMerit Corp. said Wednesday that it will enter the Chicago-area banking market by buying 24 branches and $1.2 billion in deposits from First Bank for about $42 million.

Under a separate deal, FirstMerit said, it will acquire asset-based loans of $104 million at a discount to par from an affiliate of First Bank, which is based in St. Louis.

FirstMerit said it will pay First Bank a 3.5 percent premium to total average deposits for the 30 days before closing. The $42 million figure is based on deposits as of Sept. 30.

First Bank is required to deliver at least $1 billion in deposits, but FirstMerit expects the amount to be $200 million above that.

FirstMerit said the deals would have one-time costs of $3.5 million and add to earnings per share next year.

Akron-based FirstMerit said both deals exclude non-performing, criticized, classified and delinquent and higher-risk loans.

Shares of FirstMerit rose 95 cents, or 5.3 percent, to $19.05 in afternoon trading.