Harrisburg-based Centric Financial Bank will merge with First Commonwealth Financial Corp. of Indiana, Pennsylvania.
First Financial said in a press release that the two banking institutions signed a definitive agreement and Plan of Merger Tuesday.
In the release, First Financial said the all-stock transaction is valued at approximately $16.20 per share, or approximately $144 million in the aggregate, based upon the preceding 10-day volume weighted average closing stock price of First Commonwealth as of Tuesday.
Following the merger of the parent holding companies, Centric’s subsidiary, Centric Bank, will merge into First Commonwealth’s subsidiary, First Commonwealth Bank, First Commonwealth said.
“We are genuinely excited about the opportunities that our combined organizations can create. We have long admired the job that Centric’s President and CEO Patti Husic and the Centric team have done creating an extraordinary culture, growing their organization and serving their clients,” said T. Michael Price, president and CEO of First Commonwealth.
The merger will produce a combined company with approximately $10.6 billion in total assets. Centric will contribute approximately $1.0 billion in total assets, $0.9 billion in total deposits, $0.9 billion in total loans, seven branch locations and one loan production office in the Harrisburg, Philadelphia and Lancaster areas, the company said.
The transaction represents a continuation of First Commonwealth’s commercially focused expansion into higher growth metro markets and builds upon its acquisition of 14 former Santander Bank branches in Central Pennsylvania in 2019.
“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,” Price said.
Under the terms of the Agreement and Plan of Merger, which has been approved by the boards of directors of both companies, Centric shareholders will be entitled to receive a fixed exchange ratio of 1.09 shares of First Commonwealth common stock for each Centric common share.
The merger is expected to qualify as a tax-free reorganization and is expected to be completed in the first quarter of 2023.
“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,” said Husic.
Upon completion of the merger, First Commonwealth will appoint Husic to its board of directors.