A pair of Ohio banking companies are merging: First Defiance Financial Corp is acquiring United Community Financial Corp in an all-stock deal worth $473 million.
The combined company will have approximately $6.1 billion in assets, $5.0 billion in loans and $4.9 billion in deposits. United Community’s Home Savings Bank will merge into First Federal Bank of the Midwest, subsidiary of First Defiance, once the deal closes in the first quarter of 2020. The holding company will be headquartered in Defiance and the bank will be based in Youngstown.
“After a long relationship between the two companies, we are thrilled to bring together these two great Ohio community bank franchises. These organizations are a perfect strategic fit, balancing the strengths of each,” said Donald P. Hileman, president and CEO of the $3.3 billion First Defiance.
“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 the $2.9 billion 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.”
Once the merger is complete, Hileman will serve as CEO of the holding company and the bank before transitioning to an executive chair 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 chair.
The combined board will be comprised of seven members designated by First Defiance (including Hileman and its current chair John Bookmyer) and six members designated by United Community (including Small and its current chair Richard Schiraldi, who will be named vice chair).
Upon closing, First Defiance shareholders will own approximately 52.5% of the combined company and United Community shareholders will own approximately 47.5%.
Keefe, Bruyette & Woods, A Stifel Company served as financial advisor and provided a fairness opinion to First Defiance. Barack Ferrazzano Kirschbaum & Nagelberg LLP served as First Defiance’s legal counsel.
Sandler O’Neill + Partners, L.P. served as financial advisor and provided a fairness opinion to United Community. Wachtell, Lipton, Rosen & Katz served as United Community’s legal counsel.