Home Savings and Loan is expanding its footprint beyond Ohio and Pennsylvania with the announced merger with a bank that has branches in Indiana, Michigan, and Ohio.

According to a joint media release, First Defiance Financial Corp and United Community Financial Corporation have reached a merger deal involving a stock-for-stock transaction.

Under the agreement, United Community subsidiary, Home Savings Bank, will merge into First Defiance subsidiary First Federal Bank of the Midwest.

The combined company will operate under a name to be jointly determined before closing, and the holding company will be headquartered in Defiance with the bank headquartered in Youngstown.

Home Savings Bank offers commercial, wealth management and consumer banking products and services with 32 retail banking offices in Ohio and one in Pennsylvania. Home Savings also has residential mortgage loan centers servicing Ohio, West Virginia, western Pennsylvania, northern Kentucky, and eastern Indiana.

First Federal Bank operates 44 full-service branches in the northwest and central Ohio, southeast Michigan, and northeast Indiana and a loan production office in Ann Arbor, Michigan. First Insurance Group is a full-service insurance agency with nine offices throughout northwest Ohio.

Under the terms of the merger agreement, shareholders of United Community will receive 0.3715 shares of First Defiance common stock for each share of United Community common stock. Based upon a closing price for First Defiance as of September 6, 2019, of $26.32, the transaction is valued at approximately $473 million.

Upon closing, First Defiance shareholders will own approximately 52.5% of the combined company and United Community shareholders will own approximately 47.5%.

According to the media release, the merger is attractive to shareholders of both companies who will benefit from increased size and scale of the company.

The combined company will offer commercial banking, residential lending, retail, insurance and wealth management in Ohio, Michigan, Indiana, Pennsylvania, and West Virginia.

"After a long relationship between the two companies, we are thrilled to bring together these two great Ohio community bank franchises. These organizations are a perfect strategic fit, balancing the strengths of each. With enhanced scale, we will have the opportunity to continue to grow and compete more effectively in all the markets we serve for the foreseeable future," said Donald P. Hileman, President and Chief Executive Officer of First Defiance.

"We are pleased to partner with a company that has a shared community-minded vision, culture and focus on performance," said Gary M. Small, President and Chief Executive Officer of United Community. "I truly believe that this merger is a win-win for all stakeholders: customers, associates, shareholders, as well as the communities we serve."

Once the merger is complete, Donald P. Hileman will serve as the Chief Executive Officer of the holding company and the bank before transitioning to an Executive Chairman role in early 2021. Gary M. Small will assume the role of President of the holding company and the bank before transitioning to the Chief Executive Officer role when Mr. Hileman becomes Executive Chairman.

Together they will lead the company and partner on overall strategy, management, and performance of the company. In addition to these roles, the executive management team and employees of the combined company will continue to provide an unsurpassed customer-focused culture.

The Board of Directors of the combined company will be comprised of seven members designated by First Defiance and six members designated by United Community. The directors of the combined company will be determined in the coming months and identified before the closing of the transaction.

The transaction is expected to close early in the first quarter of 2020, subject to the approval of shareholders of both First Defiance and United Community and regulatory approvals.