FirstFederal Financial Services Corp Acquires Summit Bancorp in Ohio

Strategic Insights -

FirstFederal Financial Services Corp and Summit Bancorp jointly announced the signing of a definitive agreement for the acquisition of the stock of Summit Bancorp by FirstFederal on December 31, 1996. Under the terms of the agreement, FirstFederal will exchange 1.87 shares of its common stock for each of the 234,916 shares of Summit stock, valuing the transaction at approximately $17.3 million.

Key Takeaways:

  • The acquisition will create a new partnership between FirstFederal and Summit Bancorp, solidifying their position in the Ohio market.
  • FirstFederal will operate Summit Bank as a wholly owned subsidiary, maintaining its name, management, and board intact.
  • David C. Vernon, chairman and CEO of Summit, will join the board of directors of FirstFederal.
  • The transaction is expected to be consummated during the third quarter of 1997, pending shareholder and regulatory approvals.
  • Summit Bancorp's subsidiary, Summit Bank, has two commercial banking offices in Akron and Hudson, with total assets of $79.2 million and shareholders' equity of $6.9 million.
  • Gary G. Clark, chairman and CEO of FirstFederal, stated that Summit is a great performer and that the acquisition will expand FirstFederal's ability to serve small business lending and diversify its balance sheet.
  • Summit reported net income of $0.6 million for the first nine months of 1996, with an annualized return on assets of 1.03 percent and an annualized return on shareholders' equity of 11.72 percent.

Statistics:

  • 1.87 shares of FirstFederal common stock will be exchanged for each of the 234,916 shares of Summit stock.
  • The transaction is valued at approximately $17.3 million.
  • Summit Bank has two commercial banking offices in Akron and Hudson.
  • Total assets of Summit Bank: $79.2 million (as of September 30, 1996).
  • Deposits of Summit Bank: $64.5 million (as of September 30, 1996).
  • Shareholders' equity of Summit Bank: $6.9 million (as of September 30, 1996).
  • Net income of Summit for the first nine months of 1996: $0.6 million.
  • Annualized return on assets of Summit: 1.03 percent (as of September 30, 1996).
  • Annualized return on shareholders' equity of Summit: 11.72 percent (as of September 30, 1996).

Sources:

  • "FirstFederal Financial Services Corp. and Summit Bancorp Announce Signing of Definitive Agreement for Acquisition of Summit Bancorp" (Business Wire, December 31, 1996)
  • FirstFederal Financial Services Corp and Summit Bancorp's press release announcing the acquisition (December 31, 1996)