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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): April 19, 2000
FIRST INDIANA CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 0-14354 35-1692825
(State or jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
135 N. Pennsylvania Street, Suite 2800
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 269-1200
Not applicable
(Former name or former address, if changed since last report)
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<PAGE>
ITEM 5. OTHER EVENTS.
On April 19, 2000, First Indiana Corporation ("First Indiana") and The
Somerset Group, Inc. ("Somerset") jointly announced the signing of a definitive
agreement pursuant to which Somerset will be merged with and into a
wholly-owned subsidiary of First Indiana. The merger agreement provides that
each shareholder of Somerset will have the option of receiving 1.21 shares of
First Indiana common stock (valued at $21.48, based on First Indiana's April
18, 2000 closing price of $17.75 per share) or $24.70 in cash, or a combination
of each, for each share of Somerset stock owned as of the effective date of the
merger. Based on First Indiana's April 18, 2000 closing price, and assuming
that 80% of Somerset's shares are exchanged for stock and 20% are exchanged for
cash, the transaction has an aggregate value of approximately $63 million.
Pursuant to General Instruction F to Form 8-K, the press release issued
April 19, 2000 concerning the merger is incorporated herein by reference and is
attached hereto as Exhibit 20.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Exhibit
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20 Press Release dated April 19, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST INDIANA CORPORATION
Date: April 20, 2000 By: /s/ David L. Gray
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David L. Gray
Vice President and
Treasurer
N E W S
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[First Indiana Logo]
FIRST INDIANA CORPORATION
April 19, 2000
Kenneth L. Turchi - Media (First Indiana)
(317) 269-1664
Beth Copeland - Media (First Indiana)
(317) 269-1395
David L. Gray -Shareholders and Analysts (First Indiana)
(317) 269-1346
Joseph M. Richter - Media, Shareholders,
and Analysts (Somerset)
(317) 269-1328
FOR RELEASE AFTER 6:30 P.M. EDT
First Indiana Corporation and The Somerset Group, Inc., an Affiliate,
Announce Merger Agreement
Merger Will Create a Comprehensive Financial Services Firm
(Indianapolis) - First Indiana Corporation and The Somerset Group, Inc.,
today announced the execution of a merger agreement, whereby Somerset will
merge into a wholly owned subsidiary of First Indiana. The Somerset Group, Inc.
currently owns approximately 22% of the outstanding common stock of First
Indiana.
Under the terms of the merger agreement, each shareholder of Somerset will
have the option of receiving 1.21 shares of First Indiana common stock (valued
at $21.48, based on First Indiana's April 18, 2000, closing price of $17.75 per
share), or $24.70 in cash, or a combination of each, for each share of Somerset
stock owned as of the effective date of the merger. However, the number of
shares that can be exchanged for cash will be limited to no more than 35% of
Somerset's shares outstanding as of the effective date. Based on First
Indiana's April 18, 2000, closing price, and assuming that 80% of Somerset's
shares are exchanged for stock and 20% are exchanged for cash, the transaction
has an aggregate value of approximately $63 million.
<PAGE>
First Indiana/Somerset Merger
April 19, 2000
Page 2 of 4
After various synergies have taken effect, the merger is expected to be
accretive to First Indiana's earnings during the first full calendar year of
combined operations, based on an estimate of the number of First Indiana shares
to be issued in the merger. The merger will be accounted for as a purchase
transaction and is expected to close in the third quarter of 2000.
"The merger of First Indiana and Somerset became a logical choice for the
shareholders and customers of both companies, given Somerset's recent
transformation from a diversified holding company to a comprehensive financial
services firm," said Robert H. McKinney, Chairman of First Indiana and
Somerset. "In addition, First Indiana's emphasis on local decision-making and
building long-term relationships with customers fits perfectly with Somerset's
broad range of services, from wealth management to business and tax
consulting."
Marni McKinney, Vice Chairman and Chief Executive Officer of Somerset and
First Indiana, pointed out that recent changes in laws governing financial
services companies further supported a merger of First Indiana and Somerset.
"The Gramm-Leach-Bliley Act raised the expectations of what customers expect
from their financial services firm," she said. "As the ownership barriers
between banks and non-banks continue to dissolve, the time is right to
capitalize on the synergies between First Indiana and Somerset and make the
full spectrum of services available to all clients of both companies."
Ms. McKinney further noted that the merger will eliminate the duplicate
expenses associated with operating First Indiana and Somerset as separate
publicly held companies. "The merger enables expenses associated with being a
publicly held company to be redirected to income-producing activities, and,
ultimately, to First Indiana's bottom line," she said.
Ms. McKinney also said that the merger of First Indiana and Somerset will
offer Somerset's shareholders improved trading of their stock and enhanced
research coverage. The transaction will be accretive to Somerset's earnings per
share and book value per share. In addition, Somerset's shareholders' dividends
will increase by approximately 100% from their current levels. "For all of
these reasons," she said, "the merger of First Indiana and Somerset is a sound
decision for both groups of shareholders."
"The merger of First Indiana and Somerset will help First Indiana
capitalize on the synergies that already exist between the two companies," said
Owen B. "Bud" Melton, Jr.,
<PAGE>
First Indiana/Somerset Merger
April 19, 2000
Page 3 of 4
President of First Indiana. "These strategies have been in place for several
years, and the merger should help accelerate their development.
"The merger will also accelerate growth in fee income at First Indiana,"
Mr. Melton added. "Fee income has been an important source of growth in
earnings, and the acquisition of Somerset will augment the 29% growth in fee
income that First Indiana experienced in 1999."
Patrick J. Early, President of Somerset, will continue as President of
Somerset Financial Services. No reductions in the number of employees at
either company are expected.
The merger is subject to regulatory and shareholder approvals, and both
First Indiana and Somerset have completed their due diligence examinations.
The stock portion of the consideration paid to Somerset's shareholders in the
merger is expected to be treated as a tax-free exchange. Each company's Board
of Directors has unanimously approved the merger, based on the
recommendations of their respective committees of disinterested directors, and
Somerset's directors have agreed to vote their shares in favor of the merger.
Keefe Bruyette & Woods advised First Indiana on the transaction, and McDonald
Investments advised Somerset.
First Indiana Corporation (NASDAQ - FISB) is the holding company for First
Indiana Bank. First Indiana Bank is the largest publicly held bank based in
Indianapolis, with $2 billion in assets and 23 offices in Metropolitan
Indianapolis, Franklin, Mooresville, Pendleton, Rushville, and Westfield. In
addition to its retail banking operations, First Indiana has construction and
consumer loan offices throughout Indiana and in Arizona, Florida, Illinois,
North Carolina, Oregon, and Ohio; and provides investment advisory and trust
services through FirstTrust Indiana. Information about First Indiana is
available on the Internet at www.firstindiana.com.
The Somerset Group, Inc. (NASDAQ - SOMR) is a comprehensive financial
services company providing financial planning and wealth management services,
management advisory and accounting services, tax planning and preparation,
retirement and estate planning, and information technology services.
Statements contained in this news release that are not historical facts
may constitute forward-looking statements (within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended) which involve significant
risks and uncertainties. First Indiana and Somerset intend such forward-looking
statements to be covered in the Private Securities
<PAGE>
First Indiana/Somerset Merger
April 19, 2000
Page 4 of 4
Litigation Reform Act of 1995, and are including this statement for purposes of
invoking these safe-harbor provisions. The Companies' ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain, and involves a number of risks and uncertainties. In particular,
among the factors that could cause actual results to differ materially are
changes in interest rates, loss of deposits and loan demand to other savings
and financial institutions, substantial changes in financial markets, changes
in real estate values and the real estate market, regulatory changes, or
unanticipated results in pending legal proceedings. The fact that there are
various risks and uncertainties should be considered in evaluating
forward-looking statements, and undue reliance should not be placed on such
statements.
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First Indiana/Somerset Merger
April 19, 2000
Page 4 of 4
