Struggling Integra Bank (NASDAQ: IBNK) will sell three of its bank branches based in northern Kentucky to Bank of Kentucky, and sell off assets of two other branches to the bank, which it will close down.
“This divestiture will enhance the capital strength of Integra and allow us to focus on our core community banking values in markets where we a a stronger market presence,” said Michael Alley, chairman and CEO of Integra.
In a news release the Bank of Kentucky announced it would acquire existing Integra branches in Dry Ridge, Warsaw and Crittenden, Ky. Also part of the deal will be the acquisition of some of the deposit assets and liabilities of Integra branches in Florence and Union, which will be shuttered by Integra.
Terms of the deal weren’t disclosed, but the total deposites to be assumed by Bank of Kentucky should come in at around $85 million, with about $35 million in selected loans.
This will bring the Bank of Kentucky into the 6th largest bank in the region, measured by deposits, with branches now numbering at 31 in the northern Kentucky area.
Integra has struggled to make it over the last year, losing $106.4 million on revenues of $140.6 million in 2008, while already losing $68.6 million in the first of of this year. Close to 8 percent of all its loans are behind on payment.
Integra Bank is about $3.3 billion in assets, and operates primarily in Kentucky, Indiana, Ohio and Illinois, with a total of 75 branches.
As for the commercial loan portfolio acquired by Bank of Kentucky from Integra, that is expected to close by the end of September, while the deals for the three branches is expected to close sometime in the fourth quarter.
