First Federal of Lakewood in Ohio has agreed to acquire a competitor, Century Bank in Parma, Ohio.
First Federal, with $1.2 billion of assets, would gain five branches and $135 million of assets from Century Bank. Both are mutual savings banks so no stock exchange would be involved. Instead, the assets of the institutions would be combined.
Century Bank has been operating under a cease-and-desist order since May, largely as a result of its capital levels and regulators' concerns over its credit quality.
The $129.5 million-asset bank was adequately capitalized with a total risk-based capital ratio of 9.62% as of June 30, according to the Federal Deposit Insurance Corp. First Federal, meanwhile, was exceedingly well capitalized with a total risk-based capital ratio of 18.56% as of June 30.
This would be the first whole-bank acquisition in First Federal's 75-year history.
"This acquisition will be immediately accretive to our earnings in 2011 and will keep our tangible net worth to assets ratio above 10%, making us a well-capitalized company by regulatory definition," First Federal's president and chief executive, Gary R. Fix, said in a press release Tuesday.
If the deal is approved by regulators, the combined bank would have 18 branches and $1.3 billion of assets. First Federal said the deal is expected to close in December.
