The transaction, which has been unanimously approved by the boards of directors of both companies, will create a combined company with nearly $10.6bn in total assets, and is expected to be closed in the first quarter of 2023
FCF to merge with Centric. (Credit: aymane jdidi from Pixabay)
First Commonwealth Financial (FCF) has signed an agreement to acquire Centric Financial (Centric) in an all-stock deal worth around $16.20 per share, or $144m.
Under the terms of the agreement, Centric shareholders are expected to receive 1.09 shares of FCF common stock for each Centric share held.
The transaction, which has been unanimously approved by the boards of directors of both companies, will create a combined company with nearly $10.6bn in total assets.
Centric will contribute around $1bn in total assets, $0.9bn in deposits, $0.9bn in loans, seven branch locations and one loan production office to the combined entity.
It is expected to be closed in the first quarter of 2023, subject to certain closing conditions, including approval by Centric shareholders and customary bank regulatory approvals.
First Commonwealth president and chief executive officer T Michael Price said: “We are genuinely excited about the opportunities that our combined organizations can create.
“We have long admired the job that Centric’s CEO, Patti Husic, and the Centric team have done creating an extraordinary culture, growing their organization and serving their clients.
“This extension of our physical presence into Harrisburg and Metro Philadelphia allows us to deepen our existing relationships in these markets and improve the financial lives of these businesses and their communities.”
Upon merger of the holding companies completed, Centric’s subsidiary Centric Bank, will be merged with FCF’s subsidiary First Commonwealth Bank.
In relation with the merger, FCF will appoint Patricia A Husic to Centric board of directors.
FCF said that the merger is expected to qualify as a tax-free reorganisation.
Apart from certain one-time merger charges, the transaction is expected to be around 5% accretive to FCF’s earnings in 2023, and nearly 7% to earnings in 2024.
The transaction underlines FCF’s strategy to expand into higher growth metro markets and builds upon its 2019 acquisition of 14 former Santander Bank branches in Central Pennsylvania.
Keefe, Bruyette & Woods, A Stifel Company served as financial advisor and Squire Patton Boggs as legal counsel to FCF, while Stephens served as financial advisor and Stevens & Lee as legal counsel to Centric.
Centric president and chief executive officer Patricia A Husic said: “We are equally excited for this strategic partnership and the opportunity to gain deeper market share in Central PA and the greater Philadelphia region.
“We have admired the leadership of Mike Price, the culture that has been built by their team, and the reputation of First Commonwealth as a premier financial institution in Pennsylvania.
“This strategic partnership will provide our customers and communities with greater access to additional products and services that we believe will result in an enhanced customer experience for our commercial base and the opportunity to augment the retail portion of our business with their product set and consumer verticals.”