AREA BANK MERGER AND ACQUISITION ACTIVITY
The following are recent acquisition announcements by banks and credit unions operating in the Cincinnati-Dayton market:
• Lebanon-based LCNB Corp. in 2014 closed a deal to acquire Eaton National Bank & Trust Co. and five branch offices in Preble County. This follows a deal closed the year before to acquire First Capital Bankshares Inc., the parent company of Citizens National Bank of Chillicothe.
• Columbus-based Huntington Bancshares Inc. in March 2014 completed its acquisition of Cambridge-based Camco Financial Corp., parent of Advantage Bank, which has branch offices in Mason and larger Cincinnati.
• Cincinnati-based First Financial Bancorp announced in December 2013 plans to acquire two central Ohio banks and enter the Columbus market: The First Bexley Bank, a single-branch bank in the Columbus suburb of Bexley; and Insight Bank, a single-branch bank in the Columbus suburb of Worthington. Then in 2014, plans were announced to acquire a third Columbus-area banking company, Guernsey Bancorp Inc.
• River Valley Credit Union merged in April 2014 with FirstDay Federal Credit Union of Dayton.
• Marietta-based Peoples Bancorp Inc. announced in August 2014 plans to acquire Wilmington-based NB&T Financial Group Inc., the parent company of The National Bank and Trust Co., through a stock and cash merger.
• First Citizens Banc Corp and TCNB Financial Corp. announced in September 2014 that the companies had signed a definitive agreement and plan of merger. First Citizens will acquire TCNB, and its wholly-owned subsidiary, The Citizens National Bank of Southwestern Ohio, in an all-cash transaction subject to regulatory and shareholder approvals. Citizens National currently operates three branches in the Dayton market.
The pace of mergers and acquisitions is accelerating in Ohio, says the president of the Community Bankers Association of Ohio, and locally-based financial companies First Financial Bancorp and LCNB Corp. are among the banks to grow through acquisition this past year.
Dealmakers are being driven by the costs of complying with federal bank industry regulations, as well as the struggling local economy and competition from non-traditional online and out-of-state mortgage lenders and credit card companies, said Robert Palmer, president and chief executive officer of the community bankers trade group. By his count, there have been 22 community bank mergers in Ohio over the past two years.
“2014 will be one of the most active years in Ohio as it relates to mergers and acquisitions of community banks,” Palmer said.
Currently, there are 200 community banks in Ohio, but he’s expecting that to fall to 196 after pending acquisition deals close.
“We believe it’s catastrophic because a lot of community banks are located in markets where regionals and superregionals no longer have a presence in,” said Palmer, who has been president of the community banking group since 2001.
“The community banks are very much the economic engine of their respective communities and it takes away what we refer to as the flexibility to deal with the consumers and businesses in the community because every demographic is different,” Palmer said.
Leaders of Warren County-based bank LCNB Corp. say their company’s style of community banking helps fill a void in the local market, where numbers are shrinking of competing, similar-size financial institutions.
LCNB Corp., the parent holding company of LCNB National Bank, has closed two acquisition deals in two years. Thanks to the pair of multi-million expansions, LCNB has since crossed a milestone, growing above $1 billion in assets.
The first was a $19.6 million agreement completed in 2013 to acquire First Capital Bankshares Inc., the parent company of Citizens National Bank of Chillicothe.
Then in 2014, LCNB Corp. reached a second $24.75 million deal to acquire five branch offices of Eaton National Bank & Trust Co. in Preble County.
“People like more personal service and some of the larger banks have shied away from the smaller customer or they referred them to phone numbers to call and folks really do like to have the personal service, especially for trust service,” said Steve Foster, president of LCNB.
LCNB now operates more than 30 offices in the following counties: Butler, Clermont, Clinton, Fayette, Hamilton, Montgomery, Preble, Ross and Warren.
Small banks are having a difficult time and LCNB targeted in recent years a growth plan to bring the company to the range of $1 billion to $1.5 billion in assets. That size was believed to be big enough for LCNB to survive and be successful, said Stephen Wilson, the bank’s chairman and chief executive officer.
“As community bankers we’re not happy that we’re going to go from 7,500 to 5,000 banks in three years because of Dodd Frank i.e. regulatory burden i.e. cost, and because of the artificially low interest rates which have held on for so long, which affects the income side of the small banks,” Wilson said.
“We focused on that, we’ve made our acquisitions, we’ve built branches, we’ve done lots of things to continue to grow,” he said.
About the Author