Integra Bank Calls Off Peoples Buyout

Regional bank Integra Bank Corp. said Thursday it will not acquire Peoples Community Bancorp Inc., because of current market conditions.

Integra announced plans to buy West Chester, Ohio-based Peoples in September for $85.6 million in cash and stock. The deal was expected to close during the current quarter.

The companies said terminating the deal was a mutual decision by both boards.

"It is unfortunate that the ongoing crisis in the housing market has worsened so quickly, created so much uncertainty and fundamentally changed the attitudes of the stock market, industry experts and regulators toward mergers," Mike Vea, chairman, president and chief executive of Integra, said in a statement. Integra operates in Indiana, Kentucky, Illinois and Ohio, and was buying Peoples to expand in the Cincinnati area.

Jerry Williams, CEO of Peoples, said in the same statement, "In this environment, we agree that it is the best course of action for Peoples to move forward as an independent community bank."

The banks said they would not comment further on the reasons for calling off the deal. There were no penalties incurred by either company with the termination.

The buyout called for People's shareholders to receive 0.6175 shares of Integra common stock and $6.30 in cash for each share of Peoples they own, which at the time represented a 10 percent premium over Peoples' share price of $16.10. The stock closed Thursday at $15.19, down 5.7 percent since the buyout was announced.

Integra's shares, which were at $18.45 when the deal was announced, have since fallen 19.5 percent, to close Thursday at $14.85.