ELIZABETHTOWN, Ky.,
July 9, 2012 /PRNewswire/
-- First Financial Service Corporation (NASDAQ: FFKY), parent
of First Federal Savings Bank of Elizabethtown ("First Federal"), today
announced that its previously announced divesture of its four
branch retail bank franchise in Indiana to First Savings Bank, F.S.B. ("First
Savings"), was effective after the close of business on
July 6, 2012.
First Federal received a 3.65% percent premium on the
$102.7 million of consumer and
commercial deposits at closing. First Savings assumed a
total of approximately $115.7 million
in non-brokered deposits, which included $13.0 million of government, corporate, other
financial institution and municipal deposits for zero premium or
discount. First Federal sold approximately $30.4 million in performing loans at a discount
of 0.80%. The consummated transaction is expected to result in a
one-time gain of approximately $3.5
million.
"This transaction represents another strategic step in our
continued efforts to address our Company's capital needs while
remaining mindful of the potential effects of dilution on our
current shareholders," said Gregory S.
Schreacke, President of First Financial Service Corporation.
"We will continue to explore all strategic alternatives that will
strengthen First Federal Savings Bank position in meeting the
conditions of the regulatory consent order in the most beneficial
manner to our current shareholder base." Under the terms of the
consent order, First Federal must reach a Tier I capital ratio of
9.00% and a total risk-based capital ratio of 12.00%. The
divestiture of the Southern
Indiana franchise, combined with the impending sale of four
Louisville branches previously announced in May, is projected to
increase First Federal's Tier I capital ratio from 5.90% to over
8.65% and its total risk-based capital ratio from 10.70% to over
12.00% based on May 31, 2012
financial information.
In addition to enhancing First Federal's capital position, these
divestitures will enable the Company to focus on its historically
profitable core markets. First Federal will continue to operate 13
full-service banking centers in five contiguous counties in central
Kentucky along the Interstate 65
corridor. First Federal has significant deposit market share in
each of these individual counties and a combined deposit market
share for this five county region of 22% of the deposits as of
June 30, 2011. In comparison, the
next largest competitor has just 8% market share.
First Financial Service Corporation is the parent bank holding
company of First Federal Savings Bank of Elizabethtown, which was chartered in
1923. The Bank serves the needs and caters to the economic
strengths of the local communities in which it operates and strives
to provide a high level of personal and professional customer
service. The Bank offers a variety of financial services to
its retail and commercial banking customers. These services
include personal and corporate banking services, and personal
investment financial counseling services. Today, the Bank
serves six contiguous counties encompassing central Kentucky and the Louisville metropolitan area, through its 17
full-service banking centers and a commercial private banking
center.
This press release contains forward-looking statements.
Statements that are not historical or current facts, including
statements about beliefs and expectations, are forward-looking
statements and are based on the information available to, and
assumptions and estimates made by, management as of the date made.
These forward-looking statements cover, among other things,
anticipated future revenue and expenses and the future plans and
prospects of First Federal Savings Bank. Forward-looking statements
involve inherent risks and uncertainties, and important factors
could cause actual results to differ materially from those
anticipated. Adverse conditions in the commercial real estate
markets, as well as a delay or failure of recovery in the
residential real estate markets, could cause additional credit
losses and deterioration in asset values. First Financial Service
Corporation's results also be adversely affected by declines in
business and economic conditions both generally and in the markets
we serve; changes in interest rates; events affecting the credit
quality of its loan portfolios or in the value of the collateral
securing those loans; events affecting the value of securities held
in its investment securities portfolio; legal and regulatory
developments; increased competition from both banks and non-banks;
changes in customer behavior and preferences; effects of critical
accounting policies and judgments; and management's ability to
effectively manage credit risk, residual value risk, market risk,
operational risk, interest rate risk, and liquidity risk.
For discussion of these and other risks that may cause actual
results to differ from expectations, refer to First Financial
Service Corporation's Annual Report on Form 10-K for the year ended
December 31, 2011 with the Securities
and Exchange Commission, including the section entitled "Risk
Factors," and all subsequent filings with the Securities and
Exchange Commission. Forward-looking statements speak only as of
the date they are made, and First Financial Service Corporation
undertakes no obligation to update them in light of new information
or future events.
First Financial Service Corporation's stock is traded on the
Nasdaq Global Market under the symbol "FFKY." Market makers
for the stock are:
Keefe,
Bruyette & Woods,
Inc.
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FTN
Midwest Securities
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J.J.B.
Hilliard, W.L. Lyons Company,
Inc.
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Howe
Barnes Investments, Inc.
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Stifel
Nicolaus &
Company
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Knight
Securities,
LP
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FIG
Partners
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SOURCE First Financial Service Corporation