Cecilian Bank in Cecilia, Ky., has agreed to purchase two branches and a pool of commercial loans from the struggling Integra Bank of Evansville, Ind., the companies announced Wednesday.
Cecilian would pick up $45 million in deposit liabilities from branches in Hardinsburg and Leitchfield, Ky.
The $375 million-asset Cecilian would also acquire $15 million of branch loans and $27 million of commercial real estate loans originated in other Integra branches.
The Kentucky company is to pay a 4.6% premium for the deposit liabilities and would acquire the loans for about a 1% discount from their outstanding principal balance, the companies said in a joint press release. The deal, which is subject to regulatory approval, would increase Cecilian's assets to $450 million. It is expected to close by midyear.
This is the $3.2 billion-asset Integra's second branch-sale deal in 2010. It announced Feb. 1 that United Community Bank in Lawrenceburg, Ind., had agreed to buy three Integra branches and a group of commercial and residential mortgages. That deal also is expected to close in the first half, pending regulatory approval.
"The deposit premiums and reduction of risk-weighted assets generated from these divestitures improve our capital position and are a primary component of our multistep strategy designed to improve our capital and liquidity positions, reduce our credit risk and accelerate our return to profitability," Michael J. Alley, Integra's chief executive, said in the press release.
Integra is operating under a written agreement with the Office of the Comptroller of the Currency to reduce problem assets and improve earnings, among other things. However, the agreement, which Integra signed in May, did not impose elevated capital requirements.