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Second National to Acquire Enterprise Bank,
Trumbull Savings
As previously announced to employees and all of the Bank's shareholders, Second Bancorp, Inc., parent company to Second National Bank, announced two separate merger agreements this spring.
These transactions, both of which are subject to shareholder approval, regulatory approval, and other customary conditions of closing, are milestones in the history of Second Bancorp--and a turning point in Second National Bank's future. With these acquisitions--as well as Second National's own planned growth in 1998--the Company will by year-end have 36 offices in nine counties, assets of $1.5 billion, deposits of $1.1 billion, and estimated shareholders' equity of $122.6 million.
"These affiliations are consistent with our previously stated growth plans to become a leader in regional community banking. They are both logical and attractive opportunities for Second Bancorp," says Christopher Stanitz, Executive Vice President, Second Bancorp, Inc. "Most importantly, these consolidations help assure that predominantly locally owned and operated community banking will continue to flourish in the Mahoning Valley and Northeastern Ohio."
Both of the transactions were carefully evaluated for their fit with Second National. Many factors, including geographic location, the financial institution's reputation, customer base, and financial performance, are weighed as part of the process.
"We have very strategically chosen these organizations to affiliate with and will continue to take the same measured approach toward other growth opportunities in the future," says Mr. Stanitz.
Enterprise Bank, located in southeast Cuyahoga County, fits geographically with Second National's Portage County locations and combines the commercial lending strengths of both organizations. The Solon branch will give Second National proximity to a thriving small business community in the area, as well as strong portfolios of both commercial and real estate loans.
As a result of the merger with Trumbull Savings, Second National's already dominant market share in Trumbull County will increase to nearly 25 percent, which will lead to efficiencies in operations and promotion. Together with planned office openings in Medina, Lake Cable in Stark County, and Twinsburg, the acquisitions significantly expand Second National's coverage of Northeast Ohio.
"Most of the large banking companies want to be number 1, 2, or 3 in each market they serve, just to maximize their advertising dollars," says Mr. Stantiz. "Greater market share allows you to be more efficient in your marketing efforts."
Cost savings from the consolidations, such as combined data processing, should positively affect the Company's earnings and ultimately stock price--which is good news for Second National shareholders. The acquisitions will also expand the horizon for Second National employees.
"We'll be able to offer opportunities commensurate with a $1.5 billion company," says Mr. Stanitz. "Our staff will have more employment and advancement opportunities as a result."
Enterprise and Trumbull Savings customers will also reap the benefits of banking with a major regional community bank. Second National will give the new customers access to a broader range of products and services and more office locations. And with that new base of customers numbering more than 40,000, that means plenty of cross-sell opportunities for Second National branch personnel.
"We will be combining the strengths of all three organizations to offer customers a wide range of services and a high level of expertise and convenience," says Mr. Stanitz.
The consolidations are expected to be completed by the end of summer for Enterprise and this fall for Trumbull Savings. The Acquisition Teams are in the process of making key decisions such as the timing of each conversion and how to integrate product lines.
"We're dealing with issues one by one as they come up, but as we get closer to the conversion dates, they'll be coming up 20 at a time," says Terry L. Myers, Senior Vice President. "Employees have already committed a great deal of time and thought to this process and we'll continue to offer our staff the resources and support to accomplish these conversions."
Once the product integration is completed, a manual conversion or "mapping" of data on every account will be necessary, followed by a software conversion and plenty of testing by the Bank's data processing vendor, ALLTEL.
To accommodate the mergers, technology initiatives slated for later this year or next may be moved up--such as the implementation of the new teller system. While most plans are still in progress, one thing remains certain: the conversions will take input and effort from virtually every Second National employee.
The Acquisitions
On April 1, 1998, Second Bancorp entered into a definitive agreement which will result in the merger of Enfin, Inc. into Second Bancorp. Following the merger, Enfin's banking subsidiary, the $42 million Enterprise Bank in Solon, will be operated as a Second National Bank branch. When completed, the consolidation will combine the traditional commercial lending strengths of both companies and will mark Second Bancorp's entry into the Solon market.
Under the terms of the agreement, Enfin shareholders will receive, in a tax free exchange, .95 shares of Second Bancorp common stock for each outstanding Enfin share subject to adjustment depending on future price activity of Second Bancorp's stock. The combined companies would have assets of $955 million, $741 million in deposits and nearly $83 million in shareholder equity.
"As is demonstrated by our expansion during the last five or six years into Portage and Ashtabula counties and growing communities in and around the Akron area, we are committed to extending our market presence into local economies which supplement our core business in Warren and the Mahoning Valley," says Alan G. Brant, Chairman and President of Second Bancorp. "This partnership with Enterprise Bank carries that momentum into yet another dynamic community. We are most enthusiastic about the opportunities this combination represents."
Trumbull Savings and Loan
On May 4, 1998, Second Bancorp, Inc. and Trumbull Financial Corporation jointly announced the signing of a definitive agreement for the acquisition of Trumbull Financial by Second Bancorp. Trumbull Financial's wholly owned subsidiary, The Trumbull Savings and Loan Company, will be merged into Second National Bank, subsidiary of Second Bancorp.
Under the terms of the agreement, Second Bancorp will exchange 3.78 shares of its common stock for each of the 869,364 outstanding shares of Trumbull Financial. Based on the closing price of Second Bancorp on May 1, 1998 of $37.25, the transaction would be valued at approximately $122.4 million, or $140.81 per share of Trumbull Financial. The merger is expected to be consummated in the fourth quarter, pending Trumbull Financial and Second Bancorp shareholder approval, regulatory approval, and other customary conditions of closing.
Trumbull Savings has five banking offices in Trumbull County and two offices in Jefferson County. It also has an approved branch application for Twinsburg in Summit County. As of March 31, 1998, Trumbull Financial had total assets of $525.1 million, deposits of $382.8 million and shareholders' equity of $38.1 million.
"We are impressed with the way in which the management and Board of Directors have operated Trumbull Savings and served its communities over the years. Trumbull Savings is a great community savings bank with a strong reputation for providing exceptional customer service," says Mr. Brant. "It is a natural fit with our existing Trumbull County franchise and allows us to expand into Jefferson County."
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