Exhibit 99.1
Contact: William J. Small
Chairman, CEO & President
First Defiance Financial Corp.
Phone: (419) 782-5015
Email: bsmall@first-fed.com
Paul G. Wreede
President and CEO
ComBanc., Inc.
Phone: (419) 695-1055
Email: pwreede@commercialbank.com
FIRST DEFIANCE FINANCIAL CORP. TO ACQUIRE COMBANC, INC.
o Acquisition adds four branches; $175 million in deposits and $120 million
in loans
o First Defiance expands market area into west central Ohio; branches will be
re-branded under First Federal Bank of the Midwest
o Accretive to earnings in the first full year of operations
o Transaction is expected to close early in first quarter of 2005
DEFIANCE, OHIO and DELPHOS, OHIO (August 4, 2004)--First Defiance Financial
Corp. (NASDAQ: FDEF) and ComBanc, Inc. (OTCBB:COBI.OB) today announced the
execution of a definitive agreement for First Defiance to acquire ComBanc, Inc.
and its wholly owned subsidiary, The Commercial Bank, both headquartered in
Delphos, Ohio. With $209 million in assets, The Commercial Bank has four banking
offices in Allen County, Ohio: one in Delphos, two in Lima and one in Elida.
Combined, the banking offices had $175 million in deposits and $120 million in
loans as of June 30, 2004. First Defiance Financial Corp. and ComBanc anticipate
that the transaction will be completed early in the first quarter of 2005,
pending regulatory approvals, the approval of shareholders of ComBanc and
completion of other customary closing conditions.
The transaction is valued at $38.0 million, or $17.20 per share, with
shareholders of ComBanc having the right to select payment of the purchase price
in either cash or shares of First Defiance common stock, subject to an aggregate
consideration mix of 50% cash and 50% common stock. . The exchange ratio for the
stock portion of the transaction will be based on the market price of First
Defiance stock during a pricing period immediately prior to closing, subject to
certain adjustments.
First Defiance Chairman, CEO and President William J. Small said the acquisition
expands First Federal Bank's presence into adjacent markets and supports its
growth strategy. "We have a strong presence in northwest Ohio; this acquisition
allows us to expand farther south into the west central Ohio market and it adds
the type of communities that have been very receptive to our approach to
banking," Small said. "The Commercial Bank has a solid base of commercial and
retail customers that will be a good complement to our existing franchise. In
addition, we believe that First Federal's reputation of customer service
combined with a local decision-making strategy will benefit individual and
business customers at these new additions to our branch network. We look forward
to working with the staff, customers and shareholders of Commercial Bank for a
successful transition."
"We believe that First Defiance, with its commitment to community banking, is an
ideal partner for The Commercial Bank," commented Paul Wreede, Chairman,
President and CEO of ComBanc. "We are excited about the opportunities this gives
us to expand the product offerings to our existing customers, to attract larger
relationships that we couldn't handle with our lower capital base, and to
potentially extend our reach to other communities in West Central Ohio. We
believe this transaction will produce significant benefits for our shareholders,
customers and communities."
With the addition of the four ComBanc banking offices, First Defiance will
operate 23 First Federal Bank branches and 29 ATM locations in northwest and
west central Ohio.
"We believe we will be able to quickly integrate these branches into our network
based on our success in re-branding three acquired banking offices over one
weekend last year," said Mr. Small.
"Our strength in community banking is based on the relationships we build in our
markets and we have a long-standing tradition of being good corporate citizens,"
added Mr. Small. "We will be able to provide a true community bank choice for
the customers in the Allen County area."
First Defiance expects the transaction to be accretive to earnings by $.03 to
$.05 per share in 2005 with no repurchase assumptions or revenue synergies
assumed. Annual pre-tax expense reductions are estimated to be approximately
$1.4 million with approximately 75% to be realized in 2005 and 100% thereafter.
Those savings equal approximately 22% of ComBanc, Inc.'s annualized expense
base. The companies expect one-time costs, including acquisition-related and
restructuring charges, will not exceed $1.75 million on a pre-tax basis over the
integration period. Upon completion of the acquisition, on a pro forma basis
using June 30, 2004 data, First Defiance Financial Corp. will have $1.278
billion in total assets and $928.5 million in total deposits, with 23 community
banking offices in 11 counties.
ComBanc was advised by Keefe, Bruyette and Woods, and its legal counsel was
Squires, Sanders and Dempsey, LLP. First Defiance was advised by Austin
Associates LLC and its legal counsel was Vorys, Sater, Seymour and Pease LLP.
About First Defiance Financial Corp.
First Defiance Financial Corp., headquartered in Defiance, OH, is the holding
company for First Federal Bank of the Midwest and First Insurance & Investments.
First Federal operates 19 full service branches, and 25 ATM locations in
northwest Ohio. First Insurance & Investments is the largest property and
casualty insurance company in the
Defiance, OH area and specializes in life and group health insurance and
financial planning. For more information, visit the company's Web site at
www.fdef.com.
About ComBanc, Inc.
ComBanc, Inc. is a bank holding company whose principal activity is the
ownership and management of The Commercial Bank. The Commercial Bank operates
primarily in Allen County, Ohio where it has offices in Delphos, Lima and Elida;
and in adjacent Putnam and Van Wert Counties. For more information, visit the
company's Web site at www.commercialbank.com .
Safe Harbor Statement
This release may contain forward-looking statements about First Defiance
Financial Corp., ComBanc Inc., and/or the combined company within the meaning of
Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated
thereunder, and 21E of the Securities Exchange Act of 1934, as amended, and Rule
3b-6 promulgated thereunder, that involve inherent risks and uncertainties. This
press release may contain certain forward-looking statements with respect to the
financial condition, results of operations, plans, objectives, future
performance and business of First Defiance Financial Corp., ComBanc Inc., and/or
the combined company including statements preceded by, followed by or that
include the words or phrases such as "believes," "expects," "anticipates,"
"plans," "trend," "objective," "continue," "remain" or similar expressions or
future or conditional verbs such as "will," "would," "should," "could," "might,"
"can," "may" or similar expressions. There are a number of important factors
that could cause future results to differ materially from historical performance
and these forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) competitive pressures among depository
institutions increase significantly; (2) changes in the interest rate
environment reduce interest margins; (3) prepayment speeds, loan origination and
sale volumes, charge-offs and loan loss provisions; (4) general economic
conditions, either national or in the counties in which First Defiance Financial
Corp., ComBanc Inc., and/or the combined company do business, are less favorable
than expected; (5) political developments, wars or other hostilities may disrupt
or increase volatility in securities markets or other economic conditions; (6)
changes and trends in the securities markets; (7) legislative or regulatory
changes or actions, or significant litigation, adversely affect First Defiance
Financial Corp., ComBanc Inc., and/or the combined company or the businesses in
which First Defiance Financial Corp., ComBanc Inc., and/or the combined company
are engaged; (8) difficulties in combining the operations of ComBanc Inc.,
and/or other acquired entities and (9) the impact of reputational risk created
by the developments discussed above on such matters as business generation and
retention, funding and liquidity. We undertake no obligation to release
revisions to these forward-looking statements or reflect events or circumstances
after the date of this release. Further information on
other factors which could affect the financial results of First Defiance
Financial Corp. after the merger are included in First Defiance Financial Corp.
and ComBanc Inc.'s filings with the Securities and Exchange Commission. These
documents are available free of charge at the Commission's website at
http://www.sec.gov.