Published on 10 Feb 2023 on Zacks via Yahoo Finance

First Commonwealth (FCF) Gets Regulatory Nod for Centric Deal

First Commonwealth Financial Corporation FCF has received approval from the Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities for its previously announced merger with Centric Financial Corporation. The Federal Reserve Bank of Cleveland has granted First Commonwealth a waiver of its merger application requirements.This August, FCF entered an agreement to acquire Centric for $144 million as part of its efforts to expand its presence in the higher-growth metro markets. The closing of the deal, which is subject to approval by Centric shareholders, is expected in the first quarter of 2023.Following the merger, the combined company will have $10.6 billion in total assets. Centric is expected to contribute $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 company.At the time of the deal announcement, it was decided that shareholders of Centric would be entitled to receive a fixed exchange ratio of 1.09 shares of First Commonwealth common stock for each of their shares held.The merger will qualify as a tax-free reorganization.Excluding certain one-time merger charges, First Commonwealth expects the transaction to be 5% accretive to its earnings in 2023 and 7% in 2024 once cost savings are fully phased in.Including the impact of estimated one-time charges, the transaction is anticipated to result in a tangible book value dilution of 3%, which will be earned back in 2 years.In August, T. Michael Price, the president and CEO of First Commonwealth, said, “We are genuinely excited about the opportunities that our combined organizations can create. 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.”The president and CEO of Centric, 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.”Over the past six months, shares of FCF have gained 9.5% against the 0.3% decline recorded by the industry.

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