First Financial Offers Stock, Buys Banks

It's been a busy two days for First Financial Bancorp(FFBC Quote). Too bad investors weren't impressed.

First Financial began a $100 million underwritten public share offering Tuesday. The shares will be offered through Sandler O'Neil + Partners and Keefe, Bruyette & Woods. Other underwriters include Janney Montgomery Scott and Raymond James & Associates.

But that's not all. Yesterday, the Cincinnati-based commercial bank also agreed to buy 17 banking centers in Ohio and Indiana from Peoples Community Bank (PCBI Quote). Total purchase price of the deal stands at $12 million. The deal includes about $310 million in deposits and $260 million in business and consumer loans. Most of the loans are for residential real estate and none will be more than 30 days delinquent. A release announcing the deal said it is likely to close in the third quarter of 2009 and may add 6 cents per share in 2010.

Peoples Community Bank will continue to operate two branches, along with assets of $325 million. The agreement comes after the Office of Thrift Supervision said Peoples Community Bank was undercapitalized, threatening its existence.

"It is a continuation of our decision to significantly expand our Cincinnati presence," Claude Davis, president and CEO of First Financial Bancorp, said in the release. "This purchase increases the number of First Financial branches in the Cincinnati MSA by 50% advancing our growth plans by several years."

For its efforts, investors soured on First Financial Bancorp yesterday. It nosedived nearly 14% from the previous day's close, finishing at $8.83.