Citizens Deposit Bank and Trust, a wholly-owned subsidiary of West Virginia-based Premier Financial Bancorp, has agreed to purchase four banking offices of Integra's wholly-owned bank subsidiary, Integra Bank.
The banking offices included are located in Maysville and Mt Olivet, Kentucky and Ripley and Aberdeen, Ohio. In addition, Citizens has agreed to acquire a pool of commercial and commercial real estate loans from Integra.
Citizens will assume approximately $73.4m of deposit liabilities related to the four branches and acquire $18.3m of branch related loans, as well as $38.1m of additional commercial real estate and $10.6m of other commercial loans selected by Citizens originated from other Integra offices. The Kentucky branches include approximately $47.3m of deposits, while the Ohio branches include approximately $26.1m of deposits. In a separate loan purchase agreement, Citizens has also agreed to purchase $15m of additional commercial loans at 98% of their outstanding principal balance.
Integra Bank expects this transaction to improve its Tier 1 and total risk based capital ratios by approximately 55 basis points, while increasing its Tier 1 leverage ratio by approximately 30 basis points. The transaction is also expected to increase the parent company’s tangible common equity to tangible assets ratio by approximately 15 basis points.
After completion of this transaction, Citizens will have 10 banking centers in Kentucky and two in Ohio, with total assets of approximately $197m and deposits of approximately $175m.
Michael Alley, chairman and CEO of Integra, said: “This is the fifth sale of branch clusters we have announced in 2010 and we continue to expect additional announcements this year. We are pleased with the progress made so far in executing the multi-step strategy we announced in the fourth quarter of 2009 that will result in a focus on community banking in a narrower operating footprint.
“We continue to execute other components of our plan, including the sale of performing and non-performing commercial real estate loans, reduction of our non-performing assets, aggressive reductions of our cost structure to match our core earning capacity, aggressive marketing of our services to community relationship customers, and a return to profitability.”
Mike Mineer, president and CEO of Citizens, said: “We look forward to working with Integra during the transition to provide a seamless ‘hand-off’ of their branch customers into the Citizens network of branch locations as we welcome the customers of these four branches into the Citizens Deposit Bank family.”
However, the transaction is subject to customary closing conditions, including regulatory approval. The parties expect the loan purchase transaction to close in the second quarter of 2010, and the branch sale transaction to close in the third quarter of 2010.