First Capital Inc. of Corydon, Ind., and HCB Bancorp of Palmyra, Ind., said they plan to merge, forming a nine-branch banking company with $203 million of assets.
The southern Indiana banks said Monday that they expect to close the $14 million stock-swap transaction in the first quarter of 2000.
First Capital is to exchange 15.5 shares of its stock for each share of HCB. The post-merger institution is to operate as First Harrison Bank, and its parent company will go by the name First Capital.
First Capital, with assets of $117 million, is the parent of First Federal Bank. HCB Bancorp, the parent of Harrison County Bank, has $87 million of assets.
Once the deal is closed, the companies expect to cut costs by 8% over 18 months, said Gordon Pendleton, chairman and chief executive officer of First Capital.
First Harrison also will consider closing the branch either in New Salisbury or Crandall, Ind., which are within five miles of each other, Mr. Pendleton said. No layoffs are planned.