First National Bancorp of Gainesville, Ga. reached across southern Georgia and nearly halfway across Florida to sign a letter of intent to buy New Smyrna Beach-based FF Bancorp for $78 million in stock.
First National, which has assets of $2.3 billion, will pay a price representing 1.6 times FF Bancorp's book value and eight times its projected 1995 earnings.
FF Bancorp, with total assets of $597 million and nine offices, owns two healthy thrifts, in New Smyrna and Inverness, and one troubled community bank, Tampa-based Key Bank of Florida.
The transaction was the first one out-of-state for First National, whose franchise of 17 community banks iS located mostly in rural north Georgia.
"Geographical proximity is not a major issue," said First National president Peter D. Miller. "We have an affiliate in Carrollton, Ga. It takes me, by the road, two hours to get to Carrollton. It takes me 2 1/2 hours to get to New Smyrna Beach, by plane."
Mr. Miller said First National did not expect the deal to dilute its book value, but he declined to estimate what it might add to earnings per-share next year. The transaction is subject to shareholder and regulatory approvals as well as the completion of a definitive agreement.
FF Bancorp's subsidiaries include First Federal Savings Bank of New Smyrna, with $318 million of assets; First Federal Savings Bank of Citrus County, with $214 million; and Key Bank, which has $66 million of assets. The two thrifts have strong deposit share in their respective markets, but Key Bank is only a niche player in Tampa, specializing in commercial real estate.
