First Commonwealth Financial Corporation and Centric Financial Corporation jointly announced the signing of a definitive Agreement and Plan of Merger providing for the merger of Centric with and into First Commonwealth in an all-stock transaction valued at approximately $144 million in the aggregate, based upon the preceding 10-day volume weighted average closing stock price of First Commonwealth as of Aug. 29.

Following the merger of the parent holding companies, Centric’s subsidiary, Centric Bank, will merge with and into First Commonwealth’s subsidiary, First Commonwealth Bank.

The business combination will produce a combined company with approximately $10.6 billion in total assets. Centric will contribute approximately $1.0 billion in total assets, $900 million in total deposits, $900 million 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. 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,” said Patricia A. "Patti" Husic, President and Chief Executive Officer of Centric.

Upon completion of the merger, First Commonwealth will appoint Patricia A. 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 two years.

First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, equipment finance, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency.

Founded in 2007, Centric Financial Corporation, and its subsidiary, Centric Bank, is headquartered in south central Pennsylvania with assets of $1.1 billion and remains a leader in organic loan growth.

Advisors

Keefe, Bruyette & Woods, A Stifel Company served as financial advisor and Squire Patton Boggs (US) LLP served as legal counsel to First Commonwealth. Stephens Inc. served as financial advisor and Stevens & Lee served as legal counsel to Centric.