First Financial Bancorp in Cincinnati has agreed to buy Westfield Bancorp in Westfield Center, Ohio.
The $18.5 billion-asset First Financial said in a press release that it will pay $325 million in cash and stock to Ohio Farmers Insurance Co. for the $2.2 billion-asset Westfield. The deal, which had the codename Project Artemis and is expected to close in the fourth quarter, valued Westfield at 137% of its tangible book value.
Westfield has $1.6 billion of loans and $1.9 billion of deposits, and it has a specialty business of lending to insurance agencies and registered investment advisers. All Westfield branches will remain open.
First Financial will pledge $500,000 to its community foundation.
“This targeted expansion of our commercial, consumer, and specialty banking businesses broadens our ability to serve additional clients, and it opens up new avenues for growth and profitability in an attractive geographical area,” Archie Brown, First Financial’s president and CEO, said in the release.
“We are excited about the commercial banking focus of Westfield Bank as well as the complementary nature of [its] specialty lending businesses, which will build upon our existing strengths,” Brown added.
The transaction is expected to be 12% accretive to First Financial’s earnings. It should take nearly three years for First Financial to earn back an estimated 7.6% dilution to its tangible book value.
First Financial plans to cut about 40% of Westfield’s annual noninterest expenses. It expects to incur $23 million in merger-related expenses.
Janney Montgomery Scott and Amundsen Davis advised First Financial. Keefe, Bruyette & Woods and Squire Patton Boggs (US) advised Ohio Farmers and Westfield Bancorp.