FirstFederal Financial Services, a thrift holding company with $1.1 billion of assets, said Dec. 31 that it had agreed to buy $79.2 million-asset Summit Bancorp as part of an effort to diversify from mortgage lending.

The acquisition would "expand our ability to serve the small-business lending market and further diversify our balance sheet, which has been heavily concentrated in residential mortgage loans," FirstFederal chief executive Gary G. Clark said in a press release.

FirstFederal is to pay $18.1 million for Akron-based Summit. According to SNL Securities, the deal represents 2.5 times Summit's Sept. 30 book value and 21.8 times trailing fourth-quarter earnings.

"Summit's strength is small business, and that's one of FirstFederal's weaknesses," said Ross Demmerle, an analyst for McDonald & Company Securities Inc., in explaining the high price. McDonald served as financial adviser for FirstFederal in the transaction.

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