First Financial acquires Heritage Bank in merger

Tribune-Star/Austen LeakeFFB Grows: Terre-Haute based First Financial Bank will grow into Kentucky and Tennessee under a newly announced stock-and-cash merger between First Financial Corp. and HopFed Bancorp, the holding company that owns Heritage Bank. Shown here is FFB's main branch at Sixth Street and Wabash Avenue in downtown Terre Haute.

Terre Haute-based First Financial Corp. is acquiring a banking company that will expand it into Kentucky and Tennessee.

First Financial this evening announced that HopFed Bancorp Inc. (HFBC on the NASDAQ), the holding company of Heritage Bank, will merge into First Financial Corp. 

Headquartered in Hopkinsville, Kentucky, HopFed Bancorp. has about $905 million in assets, with 200 associates operating 18 Heritage Bank branches and three loan offices.

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

Under the terms of the merger, which has been unanimously approved by both company's boards, stockholders of HFBC may elect to receive either (or a combination of) 0.444 shares of First Financial common stock or $21.00 in cash for each share of HFBC common stock.

The agreement specifies the targeted total split will be 50 percent of HFBC shares being exchanged for First Financial common stock and 50 percent for cash.

Based on First Financial’s closing price of $43.01 on Jan. 4, such a 50/50 split would produce a price of $20.05 per share and total transaction value of about $128.3 million.

Upon completion of the merger, Heritage Bank , a wholly owned subsidiary of HFBC, will merge into First Financial Bank, which is wholly owned by First Financial Corp. 

The transaction is expected to close in the second quarter of 2019 subject to customary conditions, including regulatory and HFBC stockholder approvals. First Financial will be the surviving company and will continue its existence under the laws of Indiana.

Heritage Bank serves the area surrounding Fort Campbell, one of the largest military installations in the world. There are 26,000 soldiers and 40,000 family members living on base, with 110,000 retirees living in the surrounding region, according to First Financial Corp. Heritage's loan offices are positioned in the greater Nashville area, one of the fastest growing cities in the country.

"This acquisition is exciting for our company. Heritage provides us with an opportunity to leverage our capabilities and expand into new markets," First Financial President and CEO Norman L. Lowery said in a news release. "We look forward to continuing Heritage’s commitment to its customers and the communities it serves.” 

John Peck, President and CEO of HFBC, said the deal would allow Heritage "customers to continue to enjoy a great relationship with a strong community-focused financial organization.”

First Financial has assets of about $3 billion and operates 65 banking centers in east-central Illinois and west-central Indiana. If the proposed merger is completed as expected, it anticipates combined assets of about $3.9 billion.