First Merchants, IAB deal biggest area banking news for 2017

January 4th, 2018

By Doug LeDuc | Greater Fort Wayne Business Weekly

Star Financial Bank became the only bank with a Fort Wayne headquarters when Muncie-based First Merchants Corp. completed its $271.1 million purchase on July 14 of Independent Alliance Banks.

The acquisition grew the First Merchants branch network to 122 banking centers in Indiana, Illinois and Ohio and was the biggest banking and finance news for northeast Indiana in 2017, a year when a lot was happening within the industry.

First Merchants employed about 1,450 full time equivalent employees and IAB employed about 250. The combination brought assets at First Merchants this summer to $8.7 billion, loans to $6.2 billion, deposits to $6.7 billion and shareholders’ equity to $1.1 billion.

Staying local

At Star, “becoming the only bank headquartered in Fort Wayne certainly brings us pride,” said Jim Marcuccilli, chairman and CEO.

“We look forward to continuing to serve Fort Wayne and other communities across Indiana, as being headquartered in Fort Wayne and Allen County will allow our customers access to the executives and senior management,” he said. “Star is invested in the Fort Wayne community with nearly 300 of our 550 employees located here, and our Service Center is a local phone call. We are excited to continue to grow alongside Fort Wayne, Allen County and northeast Indiana.”

Star plans to make the most of its advantages as a privately held, family-owned community bank, which Marcuccilli said includes the ability to meet face-to-face with not only the local decision makers, but the owners.

Its marketing plan is to remind members of the communities it serves “that banking with Star means their money stays in Indiana and helps grow businesses right here, not in another big city across the country,” he said.

“We will certainly continue to leverage our Indiana roots in our marketing, and we are seeing that our family, friends and neighbors want to keep their money local by banking with Star,” he added. “Star is proud to be a home-grown Indiana bank. We believe strongly in giving back to the Hoosier state whether that be through economic development, philanthropy or education. Our employees help us with our marketing efforts by volunteering their time and talents in the communities we serve.”

As of mid-December, employees of the bank had donated more than 7,000 hours of their time back to communities and not-for-profit groups.

Growing, acquiring

The First Merchants acquisition of IAB was announced in February, and other important industry developments during the first half of the year included a couple of a Horizon Bancorp acquisition announcements and the creation of a couple of university programs important to the growth of the area’s insurance industry.

Indiana University–Purdue University Fort Wayne announced in May it would have a new bachelor of science in actuarial science program in place for its most recent fall semester and a bachelor of science in data science and applied statistics program in place for its 2018–19 academic year.

The programs are important to the area’s insurance industry because they will help improve the quality of local talent available to it and they will help keep local training on the leading edge of the industry’s professional standards.

In June, Michigan City-based Horizon announced a $32-million deal to buy Lafayette Community Bancorp with its four banking locations in Tippecanoe County. Horizon also announced that month an agreement to buy Midland, Mich.-based Wolverine Bancorp.

Before the month ended, Horizon had converted to an Indiana state-chartered non-member bank from a national bank.

Long-term business

During the second half of the year, Fort Wayne-based Brotherhood Mutual Insurance Co. celebrated its 100th anniversary, First Financial Bank announced plans to exit the Fort Wayne market and MutualFirst Financial announced plans to acquire Universal Bancorp.

The combination of Muncie-based MutualFirst with Universal in a transaction valued at $65.6 million was expected to result in a combined company with 40 branches and $2 billion in assets when the deal closes during next year’s first quarter, pending regulatory approvals.

First Financial – the Cincinnati-based lender that entered the Fort Wayne market back in 2014 by scooping up two teams of bankers from the former Tower Bank & Trust Co. – said it would continue operating at the First Financial Center, 203 E. Berry St., until Dec. 29.

“First Financial Bank continuously reviews business opportunities and performance throughout the company’s markets, regions and footprint to ensure resources are properly aligned to meet the expectations of its market strategy,” a statement said.

The bank has one other branch in northeast Indiana. Federal Deposit Insurance Corp. data show it with a branch at 106 N. Market St. in North Manchester.

Brotherhood Mutual was founded in 1917 by Albert Neuenschwander and his pastor, Aaron Souder, to help churches in the area recover from damages cause by fire and natural disaster.

It celebrated its 100th anniversary on Sept. 1 as an important Fort Wayne employer specializing in comprehensive property, liability, workers’ compensation and commercial auto insurance for churches and related ministries.

Over the years Brotherhood has received high marks as an ethical, responsible corporate citizen. It has been a recipient of the Better Business Bureau Torch Award, which honors employers with particularly exemplary business conduct standards.

And it has received a “Best Place to Work” designation from the Indiana Chamber of Commerce for 10 consecutive years, earning it a place in the program’s hall of fame.

The size of the company’s local workforce has grown to 450 from 260 at the start of the decade. It also is represented across the country by 460 independent agents. It reported 2016 net income of $12.2 million, down from $19 million the prior year.

The company’s first Fort Wayne location was in the Central Building at Wayne and Harrison streets. It built a home office on Vance Avenue in 1960 following a number of relocations, and it moved into its blue-windowed headquarters off Ludwig Road in 1980.

Its growth during the last 10 years required a $5.2 million, 26,000-square-foot expansion for a customer service center in 2010 and a $15 million, 55,000-square-foot expansion in 2014.