Sky Financial Group to Acquire Second Bancorp Inc. for 2.46 Times Revenue

Weekly Corporate Growth Report, Jan 19, 2004

The Deal: Sky Financial Group has agreed to acquire Second Bancorp Inc. in a stock deal valued at $321 million. Under the terms of the agreement, 1.26 shares of Sky Financial common stock will be exchanged for each share of Second Bancorp. Based on recent closing prices, the deal values Second Bancorp at $33.05 per share. The deal still requires regulatory and shareholder approvals. The transaction is expected to close in the second quarter of 2004.

Discussion: Second Bancorp is the holding company for the Second National Bank. The bank, which has about 35 branch offices, operates in northeastern Ohio. The bank also operates two loan production offices. In 2002, Second Bancorp bought Stouffer-Herzog Insurance Agency, which sells life, health, and property/casualty coverage.

Sky Financial Group is the holding company for Sky Bank. The bank has about 250 branches and operates in Ohio, southern Michigan, eastern Indiana, western Pennsylvania, and northern West Virginia. Sky also offers insurance, investment management, health care financing, and trust and employee benefit services.

The acquisition will increase Sky Financial's presence in eastern Ohio. Sky has offices in eight of the nine Ohio counties in which Second National has a presence. Sky will combine Second National Bank with Sky Bank. Stouffer-Herzog will be incorporated into Sky's operations after the merger is completed.