First Merchants Bank is moving ahead with a proposed $290.9 million acquisition of MBT Financial Corp., the parent company of Monroe Bank & Trust, after reaching a settlement with the U.S. Department of Justice after an Equal Credit Opportunity Act and Fair Housing Act investigation.
The DOJ had been looking into banking lending practices in the Indianapolis market, including the First Merchants.
The bank, which has an extensive footprint in Northwest Indiana and first entered the Indy market in 2006, agreed to invest $1.12 billion in a loan subsidy fund that will offer up to $7,500 toward mortgage and home improvement loans in majority-black census tracts in Indianapolis as part of the settlement with the feds. First Merchants furthered agreed to open a bank and loan production office in Indianapolis, and to spend at least $125,000 per year on marketing, community outreach, education and credit repair initiatives in majority-black census tracks in Indianapolis over the next four years.
“The settlement provides an opportunity for the bank to devote additional resources in serving the communities in which it operates, including helping meet the credit needs of all borrowers in those communities,” First Merchants President and CEO Michael Rechin said.
The Muncie-based bank said it has been trying to improve its lending strategy in minority neighborhoods, such as by sponsoring financial literacy classes, offering low-fixed interest rate mortgage loans, and making community investments in more affordable housing since expanding to Marion Country.
“With our entry into Marion County in 2016, we have been eager to take on the new challenges of achieving excellence in a large metropolitan market. Since that time, we have added both resources and strategic partnerships as we strive to help our customers reach their goals and our communities become stronger,” Rechin said. “Our previous steps and the strategies and tactics resulting from this agreement are further examples of our longtime dedication to making a difference in the communities we serve.”
First Merchants, the successor to Munster's Citizens Financial Bank, has filed an application with the Federal Reserve Bank of Chicago for approval of its acquisition of Monroe Bank & Trust, which has $1.3 billion in assets and 20 branches in Southeast Michigan.