Hoping to cut costs and boost profitability, First Financial Bancorp plans to reorganize 14 of its affiliate banks into four regional entities in the next two years.

        The Hamilton-based banking company said the move will allow it to eventually offer new products and services, be more competitive and provide more personalized services.

        The parent of First National Bank of Southwestern Ohio said the project's cost will reduce 2001 profits by about $1.4 million to $2.3 million. The bank also said the move should boost annual profits starting next year by $920,000 to $1.85 million. The extra earnings will come from enhanced revenue growth and market expansion.

        The regionalization calls for First Financial to:

        • Merge four banks in Southeastern Indiana under the Heritage Community Bank name this year. The new entity will have assets of $366 million at 14 offices, with 38,000 customers in nine counties.

        • Combine three north-central Indiana and two northern Ohio banks under the Community First & Trust name this year. The $1.5 billion bank will have 43 offices, with 117,000 customers in 13 counties.

        • Next year, merge First National Bank of Southwestern Ohio with Hebron-based Hebron Deposit Bank, placing greater emphasis on the Greater Cincinnati market. The unit will have $1.5 billion in assets at 37 branches, with 265,000 customers in five counties.

        • By late 2002, First Financial will merge its two northwestern Indiana banks and Michigan bank. The combined entity will have assets of $831 million at 15 branches, with 72,370 customers in six counties. A name has not been established for that unit.

        Michael O'Dell, First Financial's chief financial officer, said there are no plans to close branches or lay off any of the 1,850 employees at the banks. He said the regionalization will allow the affiliates to still make local decisions on matters such as loan approvals, but not deal with personnel, administrative or regulatory matters.

        Mr. O'Dell said employees will be able to spend more time serving customers and delivering more sophisticated products such as mutual funds, lockbox and private-banking services.

        First Financial will have assets of $4 billion and 112 branches in four states. Accounts of the bank's 500,000 customers will not be affected beyond a name change or conversion to a new system.

        “We're very excited about this because it will allow us to increase service to our customers and offer some products we don't now,” Mr. O'Dell said.

        For instance, he said it's possible the four regional banks could offer Internet banking services, something they could not do as 14 individual banks.
       

Westwood Homestead
Savings part of merger

               The parent of Westwood Homestead Savings Bank in Cincinnati plans to merge its five banks under one charter and convert all of its data-processing operations into one system.

        Cambridge, Ohio-based Camco Financial Corp. said the five banks — including Westwood Homestead and First Federal Bank For Savings in Ashland, Ky. — will merge to create one Ohio savings bank.

        The banks will operate as Advantage Bank under the charter. Still, Camco's affiliate banks such as Westwood Homestead Savings will retain their names.

        Camco will take a one-time restructuring charge of $700,000, or 10 cents a share, in the second quarter, tied to the move.

        The company expects the move, along with other job reductions, to boost share earnings this quarter by 1 cent, 14 cents for the quarter following the change and by 17 cents in 2002.
       

Bank One executives
lose "special deals'

              

        Bank One Corp. chief executive Jamie Dimon has taken away $50 million in benefits from the bank's top executives, replacing the perks with a “pay-for-performance” plan.

        Mr. Dimon, 10 months into his job at the No. 4 U.S. bank, scrapped a stock-option program that rewarded executives regardless of the bank's performance. He scaled back the employer-sponsored retirement savings program and killed the executive severance and supplemental retirement plans.

        “We eliminated a lot of special deals,” Mr. Dimon, 44, told investors last week to soften the news of an unexpected fourth-quarter loss.

        Mr. Dimon, a former protege of Citigroup Inc. chairman and chief executive Sanford Weill, is trying to motivate Bank One's 80,000 employees to be more productive and accountable.

        Bank One generates $40,000 of annual net income per employee, according to Bloomberg News data. That compares with $57,000 per employee at Cincinnati-based Fifth Third Bancorp, whose employees are among the industry's most productive. Almost 77 percent of Fifth Third's 11,000 employees own the bank's stock.

        Bank One operates one of Greater Cincinnati's seven largest banks with about 30 branches.

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