First Commonwealth Financial in Indiana, Pa., has agreed to buy CenterGroup Financial in Cincinnati.
The $12 billion-asset First Commonwealth said in a press release that it will pay $54.6 million in stock for the parent of the $348.4 million-asset CenterBank. The deal, which is expected to close in the first half of next year, priced the seller at 153% of its tangible book value.
“We have known the CenterBank team for a long time and believe their customer-focused, commercially oriented business model is a strong cultural alignment and augments our existing Cincinnati growth plans,” Mike Price, First Commonwealth’s president and CEO, said in the release. “The expansion of our branch network within greater Cincinnati allows us to attract additional talent, create meaningful customer relationships, and deepen our penetration within the market.”
The transaction is expected to be about 2% accretive to First Commonwealth’s 2025 earnings, excluding merger-related charges. It should take three years to earn back an estimated 2% dilution to First Commonwealth’s tangible book value.
First Commonwealth plans to cut about 40% of CenterBank’s annual operating expenses. The company expects to incur $5.7 million of merger-related charges.
Raymond James and Squire Patton Boggs advised First Commonwealth. Janney Montgomery Scott and Dinsmore & Shohl advised CenterGroup.