-
With its coffers at capacity, the capital-flush Cincinnati company said recently it would raise its dividend to equal 100% of its quarterly earnings.
August 5 -
Flagstar Bancorp Inc. in Troy, Mich. is exiting the Atlanta market to focus on its core banking business in the Midwest and problems and its expansion into the Northeast.
July 26
First Financial Bancorp in Cincinnati has found a way to put some of its capital to work: a big branch deal with Flagstar Bancorp Inc.
The $6 billion-asset company said Tuesday that it will buy all 22 of Flagstar's branches in Indiana. First Financial will pay $23 million, or a 4.4% deposit premium, for $525.9 million in deposits, including $197.9 million of government and municipal deposits. First Financial will pay book value for any fixed assets associated with the branches, but it will not acqbuyuire any loans in the deal which is expected to close in the fourth quarter.
First Financial said in a press release that 19 of the branches are in the Indianapolis market, an area that the company has been keen on growing. The deal is expected to boost earnings in 2013, but will actually weigh down results next year.
The company said that the deal would not alter its plans unveiled last month to pay out 100% of its quarterly earnings through dividends. At June 30, the company had a tangible common equity ratio of 11.11% and Claude Davis, its president and chief executive, has said he want to get that down to 7% over time. The company said that the Flagstar deal, along with plans to buy Liberty Savings Bank's Ohio branch network, should leave the company with a tangible common equity ratio of 9.05%.
Meanwhile, the sale is consistent with Flagstar's push to focus on its core retail and commercial banking in Michigan and expanding its New England commercial banking division. Flagstar, which is headquartered in Troy, Mich., announced in late July that it was selling all 27 of its Atlanta branches to PNC Financial Services Group Inc. That deal includes $240 million of deposits. PNC will not pay a premium on that deal, but will buy the bank's fixed assets associated with the branches for $42 million, or their book value.
First Financial only has three branches in Indianapolis.
