By Jeff McKinney
The Cincinnati Enquirer
Former First Financial Bancorp president and chief executive Stanley Pontius will walk away with a hefty financial package - including millions of dollars, medical benefits and a company car - as part of his severance agreement with the Hamilton-based banking company.
Pontius, who took over the reins at the parent of First Financial Bank in 1991, agreed Wednesday with the company's board to immediately leave the $3.9 billion-asset bank that operates the fifth largest bank in the Tristate.
Pontius, 57, will get a lump-sum payment of $600,000, plus $551,328 annually for the next three years and an accelerated rate of stock options that have not fully vested or have not previously expired under the company's 1999 Stock Plan, according to documents the company filed Thursday with the Securities and Exchange Commission.
He also will continue to be part of First Financial's group health insurance plan, with the option to include his family; and will get a company-owned automobile 30 days after the separation.
First Financial said the severance package is expected to reduce share earnings by a nickel. First Financial was expected to report third-quarter results today, but postponed the report to Monday.
Scott Valentin, a senior vice president at the Arlington, Va.-based investment bank Friedman, Billings, Ramsey & Co., said Pontius' severance package would reduce First Financial's third-quarter profits by about $2.3 million. He said that would cut the bank's expected third-quarter profits by 20 percent and for all of 2003 by about 5 percent.
Although no specific details were provided as to why Pontius left, First Financial chairman Bruce E. Leep told the Enquirer it stemmed from differences between Pontius and the board.
Leep said the board's intention is to keep First Financial independent. He said the agreement was not tied to the company's recent stock performance or weak earnings.
But banking analysts who follow First Financial's stock for investors say its poor stock performance could have been Pontius' downfall.
First Financial's stock has dropped 9 percent since the stock market peaked March 10, 2000, through Wednesday, said Fred Cummings of McDonald Investments in Cleveland.
The stocks of nine peer banks of First Financial - including Cincinnati's Provident Financial Group Inc. and Sky Financial Inc. of Bowling Green, Ohio - have risen 78 percent during that period.
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