Agrees to purchase Kentucky branches, commercial loans and other assets of Integra
The Bank of Kentucky Financial Corporation’s wholly-owned bank subsidiary, The Bank of Kentucky (BK) has agreed to purchase three banking offices of Evansville-based Integra Bank Corporation’s wholly-owned bank subsidiary, Integra Bank (IB), located in Crittenden, Dry Ridge and Warsaw, Kentucky.
In addition, BK has agreed as part of the branch purchase to acquire certain deposit liabilities and assets of IB’s banking offices located in Union and Florence, Kentucky. In a separate transaction, BK has agreed to purchase a portfolio of commercial loans originated by IB’s Covington, Kentucky, loan production office.
It has been reported that in the branch purchase transaction, BK will assume approximately $85 million (as of August 31, 2009) of deposit liabilities related to the five branches and buy certain branch-related assets, including at least $35 million (as of July 31, 2009) in selected loans. In the commercial loan purchase transaction, BK has agreed to purchase approximately $50 million in selected commercial loans originated by IB’s Covington, Kentucky loan production office prior to September 30, 2009.
Upon closing of the branch purchase, BK will pay a 6.5% deposit premium for the deposit liabilities, while the loans were acquired at book value, less applicable reserves. All other assets will be sold at their book values. Robert Zapp, president and CEO of BK, said: We welcome the Integra customers to our family and are excited to be able to serve these new customers. This will give us 31 branches in Northern Kentucky and allows us to expand our commitment to personal service and distinct product offering to a greater market area.
Michael Alley, chairman and CEO of IB, said: We’ve been pleased with the strong growth we have experienced in the Northern Kentucky market. However, this divestiture will enhance the capital strength of Integra and allow us to focus on our core community banking values in markets where we have a stronger market presence. The Bank of Kentucky was a good choice for us with their strong and growing banking operation in this area, and their similar focus on providing customers with exceptional service.
However, the transactions are subject to customary conditions, including regulatory approval for the branch sale. The parties expect the branch purchase transaction to close during the fourth quarter of 2009 and the separate commercial loan purchase transaction to close by September 30, 2009.