First Defiance Financial in Defiance, Ohio, has agreed to buy United Community Financial in Youngstown, Ohio.

The $3.3 billion-asset First Defiance said in a press release Monday that it will pay $473 million in stock for the $2.9 million-asset United Community. The deal is expected to close in the first quarter.

First Defiance, which will be rebranded as part of the deal, will have $5 billion in loans and $4.9 billion in deposits when the deal closes. The company will be based in Defiance, while the bank will be headquartered in Youngstown.

“These organizations are a perfect strategic fit, balancing the strengths of each,” Donald Hileman, First Defiance’s president and CEO, said in the release. “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.”

Gary Small, United Community’s president and CEO, will become First Defiance’s president when the deal closes and will succeed Hileman as CEO in early 2021. Hileman will become executive chairman when the transition takes place.

United Community will have six of the company’s 13 board seats. Richard Schiraldi, United Community’s chairman, will become vice chairman at First Defiance.

First Defiance said it expects the transaction to be 14% accretive, including the impact of cost savings. It should take less than two years for First Defiance to earn back an estimated 4% dilution to its tangible book value.

Keefe, Bruyette & Woods and Barack Ferrazzano Kirschbaum & Nagelberg advised First Defiance. Sandler O’Neill and Wachtell, Lipton, Rosen & Katz advised United Community.

Community banking M&A Ohio