Farmers bank acquires Valley trust company

By Don Shilling

The new owner will retain the employees and offices of Butler Wick Trust Co.

Farmers National Bank took the first step in a growth plan by acquiring a local trust company that manages money for some of the area’s most recognizable institutions.

Undeterred by a nagging recession and credit crisis, the Canfield-based bank said Thursday that it intends to spend $12.1 million to acquire Butler Wick Trust Co., whose 1,000 area clients include prominent residents and organizations such as the Youngstown Symphony Society and Butler Institute of American Art.

The purchase from United Community Financial Corp. is expected to be complete in 60 to 90 days and will bring no changes except a new name, said James Sisek, president and chief executive of Butler Wick Trust.

The name will change to Farmers National Trust, but all 27 employees will remain in place and offices in downtown Youngstown and Howland will be kept, he said.

Frank Paden, Farmers president and chief executive, said the bank’s board of directors decided a year ago to embark on a growth plan that included acquisitions so the company would not be solely reliant on banking revenue.

The recession took hold and the credit crisis hit, but the bank’s balance sheet has remained strong through conservative lending, he said.

“We’ve weathered the storm and look forward to 2009,” he said.

Farmers will continue to look for other acquisitions and is almost ready to introduce an insurance division, he said.

On the other hand, United Community looks at the sale of Butler Wick Trust as a way of building capital, reducing debt and focusing its efforts on its banking branch, Home Savings and Loan Co., said Douglas McKay, United Community chief executive and chairman.

Burdened with bad loans mainly to housing contractors, United Community and Home Savings were put under special orders by federal and state regulators last August. Among the conditions was that United Community reduce its debt.

In addition to the $12.1 million from the sale of the trust company, United Community recently closed a deal that sold Butler Wick & Co. to Steifel Financial Corp. of St. Louis for $12 million.

Butler Wick & Co. was a stock brokerage that was based in downtown. It now operates as Steifel’s Butler Wick division.

Officials of the stock brokerage said they expected some job loss as the company is merged into Steifel, but Sisek said there is no need to cut the trust staff.

Keeping the company locally controlled is important because local connections have fueled the company’s growth, he said.

Butler Wick Corp. created the trust company in 1996 by recruiting Sisek from National City Bank after it acquired the locally based Dollar Savings and Trust Co.

Sisek said Butler Wick officials saw an opportunity because they knew that many local residents and organizations would want their trust funds managed locally.

He noted that the trust company started with three employees and zero assets. Today, it has 27 employees and $700 million in assets.

shilling@vindy.com