Peoples Financial Services in Scranton, Pa., has agreed to buy FNCB Bancorp in Dunmore, Pa.
The $3.7 billion-asset Peoples said in a press release that it will buy the $1.9 billion-asset FNCB for $129 million in stock. The deal is expected to close in the first half of 2024.
Peoples will remain headquartered in Scranton, while the bank will be based in Dunmore.
The deal is expected to by 59% accretive to Peoples’ 2025 earnings per share. It should take less than three years to earn back an estimated 11.3% dilution to Peoples’ tangible book value.
Peoples expects to cut about 30% of FNCB’s annual noninterest expenses, or roughly $11.5 million. It expects to incur $20.2 million of merger-related charges.
Peoples is planning $200 million of balance sheet repositioning to include the sale of FNCB’s municipal bonds. The proceeds would be used to pay down borrowings.
The 16-member board will be evenly split between the two companies, at least until 2026. William Aubrey, Peoples’ chairman, will retain his role, while Louis DeNaples Sr., FNCB’s chairman, will serve as vice chairman.
Craig Best, Peoples’ CEO, will keep that position, though he is expected to retire a year after the deal closes. Jerry Champi, FNCB’s president and CEO, will become Peoples’ president at closing and is expected to succeed Best when he retires.
Thomas Tulaney, Peoples’ chief operating officer, would succeed Champi as president.
“This transaction will create a more diversified and liquid balance sheet, which will enable the combined company to accelerate its organic growth strategy,” Best said in the release. “The close relationship between both management teams and boards … will further benefit us in exceeding our customers’ expectations as we help them achieve their financial goals.”
Cedar Hill Advisors, D.A. Davidson and Troutman Pepper Hamilton Sander advised Peoples. Stephens, Cozen O’Connor and Stevens & Lee advised FNCB.