Magazine article American Banker

NBD Bancorp Inc. Agrees to Acquire Indiana Bank Firm: Purchase of Midwest Commerce Corp. Hinges on Passage of Law in Michigan

Magazine article American Banker

NBD Bancorp Inc. Agrees to Acquire Indiana Bank Firm: Purchase of Midwest Commerce Corp. Hinges on Passage of Law in Michigan

Article excerpt

As expected, NBD Bancorp Inc. of Detroit has agreed to acquire Midwest Commerce Corp. of Elkhart, Ind., in the first deal under Indiana's new regional interstate banking law.

Earlier in the week, NBD announced that management of Midwest Commerce was submitting to its board a recommendation that the Elkhart company accept a takeover offer from NBD.

Midwest Commerce, with $581.4 million in assets, is Indiana's 11th largest bank holding company. The $14.2 billion-asset NBD is Michigan's largest banking firm.

Indiana recently enacted legislation allowing banks from Michigan, Kentucky, Illinois, and Ohio to acquire its banks, provided that those states offer reciprocal rights to Indiana banks. The same legislation also authorized Indiana banks to expand outside their home counties for the first time.

Michigan has not yet authorized interstate banking, and the NBD-Midwest banking, and the NBD-Midwest Commerce deal depends on passage of a Michigan interstate bill.

"We are hopeful that the Michigan Legislature will act expenditiously to move our state into the mainstream of progressive financial institutions legislation," said Charles T. Fisher 3d, chairman and president of NBD.

The deal is also contingent on a pending case before the U.S. Supreme Court in which the constitutionality of regional interstate banking laws is challenged.

Under the agreement, Midwest Commerce's approximately one million outstanding shares will be exchanged for an amount equal to 150% of the company's adjusted book value at the end of the quarter preceding the merger or $52 a share, whichever is greater. …

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