Indiana’s First Financial to acquire Kentucky bank

First Financial Corporation and HopFed Bancorp, Inc., announced a merger agreement under which HFBC will merge into First Financial in a cash and stock transaction worth $128.3 million.

Hopkinson, Ky.-based HFBC has $905 million in assets and operates 18 bank branches and 3 loan production offices in Kentucky and Tennessee through Heritage Bank USA. The $3 billion First Financial has 65 banking centers in east-central Illinois and west-central Indiana through First Financial Bank.

“This acquisition is exciting for our company. Heritage provides us with an opportunity to leverage our capabilities and expand into new markets. We look forward to continuing Heritage’s commitment to its customers and the communities it serves,” said Norman L. Lowery, president and CEO of the Terre Haute, Ind.-based First Financial.

Following close of the merger in the second quarter, First Financial will have $3.9 billion in assets and nearly 85 branches in Illinois, Indiana and Kentucky.

“We are pleased for our stakeholders,” said John Peck, president and CEO of HFBC. “The agreement with First Financial provides us with stability and growth opportunities that will allow our customers to continue to enjoy a great relationship with a strong community-focused financial organization.”

Heritage has 11 branch offices in Kentucky in the communities of Benton, Cadiz, Calvert City, Elkton, Fulton, Hopkinsville and Murray, and seven branch offices in Tennessee in the communities of Ashland City, Clarksville, Erin, Kingston Springs and Pleasant View.

First Financial was advised by the investment banking firm of Raymond James & Associates, Inc. and the law firm of SmithAmundsen LLC.

HFBC was advised by the investment banking firm of Sandler O’Neill + Partners, L.P. and the law firm of Jones Walker LLP, Washington, D.C. Keefe, Bruyette & Woods, Inc., A Stifel Company, rendered a fairness opinion to HFBC in connection with the transaction.