Liberty is stuck with bad loans across its four-state operation and needed the $22.2 million cash infusion to strengthen its balance sheet, Rowe said. The privately held Wilmington-based company, founded in Highland County, Ohio in 1889, will have no Ohio retail banking offices after the transaction closes, but will retain back-office operations in Dayton and Wilmington to support its 18 remaining retail banking offices in Florida, South Carolina and Colorado.
“It’s a function of generating some capital to survive. Unfortunately, you have to sell the core franchise to make that happen,” Rowe said. “Its non-performing loans were heavy.”
“It was a deal that makes us stronger for the future,” said John Powell, director of continuous improvement for Liberty Savings in Dayton.
Liberty retains its Liberty Tower in downtown Dayton and its Liberty Center in Wilmington, Powell said. Liberty has a national charter and will officially remain an Ohio company, he said.
The deal is projected to close in the third quarter of this year, provided that regulators approve. First Financial will increase from its four offices in Kettering, Washington Twp. and Springboro to 12 in the Dayton area. The company plans to put its name on the 16 Liberty offices after the deal closes.
First Financial will jump to a No. 7 position in the Dayton market (4.1 percent of total deposits) with $430 million in deposits. The company currently has $6.3 billion in assets and $4.1 billion in loans.
The $22.2 million that First Financial is paying represents a 6.4 percent premium on the $346.2 million in Liberty deposits that it is acquiring.
The transaction allows First Financial to strengthen its presence in the Cincinnati-Dayton market more quickly than it could have done otherwise, said Claude Davis, president and chief executive officer. The company, founded in Hamilton in 1863, also has operations in northwest Ohio, northern Kentucky and in Indiana, including Indianapolis, Columbus, Ind., and suburbs near Chicago.
First Financial chose to buy only Liberty’s Ohio offices to focus on Ohio as a core market, Davis said.
Although First Financial gains market share with the deal, the company still substantially trails market leader Fifth Third Bank in southwest Ohio in all but Butler County in total deposits, according to the Federal Deposit Insurance Corp.
Roger Furrer, First Financial’s regional president for the Dayton market, will manage the Liberty offices being acquired. First Financial will talk with current staff of those Liberty offices before deciding how many employees will be retained, Davis said.
Shares of First Financial Bancorp (NasdaqGS: FFBC) closed on Friday at $15.04, down 27 cents, or 2 percent.
Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.
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