In a ‘Strategic Partnership,’ Centric Bank Merges with First Commonwealth Bank

centric bank
Image via Centric Bank.

Centric Bank has announced the signing of a definitive Agreement and Plan of Merger providing for the merger of Centric with and into First Commonwealth Bank in an all-stock transaction 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 Monday, Aug. 29, 2022.

The business combination will produce a combined company with approximately $10.6 billion in total assets. Centric will contribute approximately $1 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 MSAs to the combined entity. The transaction represents a continuation of First Commonwealth’s commercially-focused expansion strategy into higher growth metro markets and geographically builds upon its acquisition of 14 former Santander Bank, N.A. branches in Central Pennsylvania in 2019.

Under the terms of the Agreement and Plan of Merger, which has been unanimously 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, subject to certain closing conditions, including approval by Centric shareholders and customary bank regulatory approvals.

“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,” said T. Michael “Mike” Price, President and Chief Executive Officer of First Commonwealth. “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.”

“We are equally excited for this strategic partnership and the opportunity to gain deeper market share in Central PA and the greater Philadelphia region,” said Patricia A. “Patti” Husic, President and Chief Executive Officer of Centric. “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,” she said.

Upon completion of the merger, First Commonwealth will appoint Husic to its board of directors. Excluding certain one-time merger charges, the transaction is expected to be approximately 5 percent accretive to First Commonwealth’s earnings in 2023, and approximately 7 percent accretive to earnings in 2024 once anticipated cost savings are fully phased in. Estimated tangible book value dilution at closing of approximately 3 percent, including the impact of estimated one-time charges, is expected to be earned back in approximately 2 years.

Connect With Your Community

Subscribe for stories that matter!

"*" indicates required fields

This field is for validation purposes and should be left unchanged.