Aug. 16, 2011
/PRNewswire/ -- Flagstar Bancorp (NYSE: FBC) today announced that it has signed a definitive agreement to divest its 22-branch retail bank franchise in
to First Financial Bancorp (Nasdaq: FFBC) for a consideration equal to a 7 percent premium based on the actual level of consumer and commercial deposits at closing. Based on
of consumer and commercial deposits at
June 30, 2011
, the consummated transaction would result in a one-time gain of approximately
Under the agreement, First Financial will also acquire Flagstar's government and municipal deposits, which were
June 30, 2011
, for zero premium or discount. No loans will be transferred in the transaction as they are traditionally originated through Flagstar's other channels and therefore will stay with Flagstar. First Financial will pay net book value on all real estate and personal assets of the bank branches and will assume the existing leases on 14 of the branches. Accordingly, Flagstar expects to incur minimal associated employee, contract or systems-related costs as a result of consummating this transaction.
The average aggregate retail deposits per branch in Indiana are approximately
, of which approximately 52 percent are comprised of certificates of deposits. At
June 30, 2010
retail bank franchise held 1.11 percent of the total deposits within our
markets, while operating 3.45 percent of all branches in that area. The transaction is expected to close in
, subject to customary closing conditions, including regulatory approvals.
"With this transaction, we can now focus our resources on the markets where we see the greatest return and growth potential, namely, our
retail and commercial banking divisions and our New England commercial banking operations," said
Joseph P. Campanelli
, chairman and chief executive officer of Flagstar Bancorp. "We've invested significant resources in transforming Flagstar into a full-service commercial bank, and our ultimate goal is to continue to grow our retail and commercial lines of business to complement our strong market presence in national mortgage banking.
"Successful retail bank franchises require market density, brand awareness, extensive product offerings, and an established reputation for exceptional customer service, all of which we have in
," Campanelli said. "That is why we are pursuing, on a selected basis, opportunities to expand our branch network into key markets in
, including metro
Campanelli also provided a brief update on certain third quarter business results to date. "We are seeing an improvement in our core fundamentals and, so far, have experienced positive trends in several of our key business drivers during the first half of the third quarter," he said. "Consistent with the overall mortgage industry, the current favorable rate environment has spurred refinancing activity and resulted in significant improvement in our mortgage business.