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First Federal's Louisville branches to be sold

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Bank will focus on its traditional core market

By Ben Sheroan

First Federal Savings Bank announced the sale of its Jefferson County locations this morning.

Coupled with a previously announced sale of its Indiana branches, the deals provide $44 million in equity to help meet financial assurances required by a consent decree with the Federal Deposit Insurance Corp.

The deals also return First Federal’s concentration to its historic core markets. When the agreements close later this year, the Elizabethtown-based company will retain 13 locations in five adjacent counties. The sales will leave the bank with $875 million in total assets and deposits of more than $761 million.

The four Louisville area branches are being purchased by First Security Inc. of Owensboro, which is expanding into the Jefferson County market. The sale is expected to be complete by the third quarter of 2012 and is contingent on regulatory approval.

“This transaction is another positive step toward addressing our company’s capital needs,” said Greg Schreacke, president of First Financial Service Corp., the bank's holding company.

The Louisville sales announcement was shared Tuesday afternoon with employees at the branches. The formal announcement was released at 8 a.m. today in a statement timed to precede the opening of U.S. stock markets.

First Financial Service Corp. is traded publicly under the symbol FFKY on the NASDAQ exchange. Trading as low as $I per share in the past year, it opened today at $3.29. After climbing to $3.40 per share, the stock price closed 4 cents lower at $3.25.

In addition to selling its Louisville locations, First Financial previously announced the sale of four Indiana branches to First Savings Bank, a subsidiary of First Savings Financial Group Inc., which is headquartered in Clarksville, Ind. That deal is expected to close in July, Schreacke said.

The company has no further plans to sell off branches, Schreacke said. These sales are designed to increase equity without diluting current investors' stake through new stock offerings.

In a separate statement today, the holding company’s first quarter financial statement showed a net loss of $251,000 or 5 cents per share. Despite First Financial’s deficit, Schreacke noted that First Federal’s banking operations recorded a quarterly profit for the period ending March 31. It was the first time in two years that the bank recorded a quarterly profit.

For more details regarding First Federal's sales, check Thursday's print edition of The News-Enterprise.