Mercantile Bank, a St. Louis-based, $30-billion bank holding company, has announced plans to merge with CBT Corporation, a $1 billion multi-bank holding company with headquarters in Paducah, Ky.
The merger became effective Jan. 12, a release from the company stat-ed.
CBT's subsidiaries, which serve the western Kentucky lake region, include four banks, a Federal Savings Bank and an established consumer finance company, Fidelity Credit Corporation, the release said. CBT has offices in McCracken, Calloway, Marshall and Graves counties, in addition to the Paducah area.
"The merger with CBT complements Mercantile's existing southern Illinois and southeastern Missouri franchises. As we strengthen our geographic presence, we also are enhancing Mercantile's future earnings potential," said W. Randolph Adams, senior executive vice president and chief administrative officer of Mercantile Bancorporation Inc., in the release.
"In choosing Mercantile as our partner, we are aligning with one of the strongest performing financial services organizations in the United States. We will be able to maintain our community-oriented banking philosophy while we expand the array of products and services we offer our customers," said William J. Jones, president and chief executive officer of the CBT Corporation, in the release.
Based upon Mercantile's closing stock price of $52.75 on Jan. 9, the transaction is valued at approximately $285 million. CBT shareholders will receive 0.6513 shares of Mercantile common stock for each share of CBT common stock, the release said.
The merger will be accounted for as a pooling of interests and is expected to close in the third quarter of 1998.
As part of its agreement with Mer-cantile, CBT granted Mercantile an op-tion to acquire 19.9 percent of its issued and outstanding shares of common stock, exercisable under certain circumstan-
In addition, Mercantile may repurchase up to 10 percent of the shares issued in the transaction.
The merger is subject to the approval of CBT shareholders and various regulatory authorities, the release said.
Mercantile currently has acquisitions pending with Horizon Bancorp Inc., of Arkadelphia, Ark., and HomeCorp Inc., of Rockford, Ill.
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