YOUNGSTOWN, Ohio (WYTV) – The company that owns Youngstown-based Home Savings Bank is merging with another Midwest bank in a $473 million deal.
First Defiance Financial Corp and United Community Financial Corp announced the stock-for-stock transaction Monday, creating a merger between Home Savings Bank and First Federal Bank of the Midwest, which is a subsidiary of First Defiance Financial Corp.
Company officials say the deal will “generate efficiencies, strengthen operations and shareholder value.”
The combined company will operate under a name to be decided before the deal is closed.
“We feel it’s important, as we endeavor, to put the two new companies together and the opportunity for rebranding the combined company exists,” said Donald Hileman, of First Defiance. “We will be looking, over the next several months, to determine a new brand name.”
The deal is expected to close during the first quarter of next year.
The holding company will be headquartered in Defiance, Ohio with the bank headquartered in Youngstown, Ohio.
A new 13-member board of directors will control the company — seven from Defiance Financial and six from United Community.
Shareholders of United Community will receive 0.3715 shares of First Defiance common stock for each share of United Community common stock.
“We are pleased to partner with a company that has a shared community-minded vision, culture and focus on performance,” said Gary M. Small, president and CEO of United Community. “I truly believe that this merger is a win-win for all stakeholders — customers, associates, shareholders, as well as the communities we serve.”
The bank will serve customers in Ohio, Michigan, Indiana, Pennsylvania and West Virginia.
Once the merger is complete, Hileman will serve as the CEO of the holding company and the bank before transitioning to an executive chairman role in early 2021.
Small will assume the role of president of the holding company and the bank before transitioning to the CEO role when Hileman becomes executive chairman.
The transaction is expected to close early in the first quarter of 2020, subject to the approval of shareholders of both First Defiance and United Community and regulatory approvals.