FNB Bank, a wholly-owned subsidiary of Kentucky-based Jackson Financial, has agreed to purchase three banking offices of Integra's wholly-owned bank subsidiary Integra Bank.
Two of the banking offices included are located in Cadiz, and the third is located in Mayfield, Kentucky. In addition, FNB has agreed to acquire a pool of commercial, agricultural, consumer and commercial real estate loans from Integra.
FNB will assume approximately $125m of deposit liabilities related to the three branches and acquire $30.1m of branch related loans, as well as $61.2m of additional commercial, agricultural, consumer and commercial real estate loans selected by FNB originated from other Integra Bank offices.
FNB will pay a 5.30% deposit premium for the deposit liabilities it assumes and will acquire the loans included in the transaction at par value. The deposit premium will be paid on total deposits up to a maximum of $125m as of the closing date. The three banking offices will be sold at book value, as will the fixed assets.
Integra Bank expects this transaction to improve its tier 1 and total risk based capital ratios by approximately 75 basis points, while increasing its tier 1 leverage ratio by approximately 50 basis points. The transactions are also expected to increase the parent company’s tangible common equity to tangible assets ratio by approximately 25 basis points.
After completion of this transaction, FNB will have eight banking centers located in Graves, McCracken, Calloway and Trigg Counties in Kentucky. Following FNB’s acquisition of these branches, it will have total assets of approximately $340m and deposits of approximately $285m.
Michael Alley, chairman and CEO of Integra, said: “This is the fourth sale of branch clusters we have announced in 2010 and we continue to expect additional announcements this year.
“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.”
Marty Nichols, CEO of FNB said: “Today’s announcement is the culmination of several months of cooperative effort between Integra and FNB to find mutually beneficial results for our companies and the customers we serve. The deposits and loans being acquired fit our community bank philosophy.”
However, the transaction is subject to customary closing conditions, including regulatory approval. The parties expect the transaction to close in the third quarter of 2010.