First Commonwealth Financial Corporation Strengthens Cincinnati Footprint

First Commonwealth Financial Corporation Expands Presence

First Commonwealth Financial Corporation (FCF), the holding company for First Commonwealth Bank, announced its strategic acquisition of CenterGroup Financial, Inc. This merger marks a significant milestone in the enhancement of First Commonwealth's footprint in the Cincinnati market, aligning with its commitment to expand its community banking services.

The Merger Details

The merger, which is valued at approximately $54.6 million, will see CenterGroup merged into First Commonwealth in an all-stock transaction. This transition is expected to significantly bolster First Commonwealth’s assets, contributing around $348.4 million of total assets, alongside three branch locations, a loan production office, and a mortgage office, thus enhancing their operational presence.

Strategic Benefits of the Acquisition

This acquisition not only increases the operational scale for First Commonwealth in Cincinnati but also aligns perfectly with its commercially focused strategy. CenterBank, as the banking arm of CenterGroup, primarily serves a customer base that is 65% business-centric, thus providing First Commonwealth with an opportunity to deepen its engagement within the local business community.

Implications for Shareholders

As per the terms of the agreement, shareholders of CenterGroup will receive a fixed exchange ratio of 6.10 shares of First Commonwealth for each share of CenterGroup they hold. The merger is structured to qualify as a tax-free reorganization and is anticipated to finalize in the first half of 2025, contingent on certain closing conditions and regulatory approvals.

Comments from Leadership

Mike Price, President and CEO of First Commonwealth, expressed enthusiasm about welcoming CenterBank into the organization. He emphasized the synergy between the two companies, highlighting that this merger will not only enhance their market share but also facilitate the attraction of talent and foster deeper customer relationships in the greater Cincinnati area.

Stewart Greenlee, the CEO of CenterGroup, echoed these sentiments, noting that the merger represents an ideal progression for their team, customers, and shareholders. He pointed out that aligning with First Commonwealth, which has a reputable presence in the market, would allow CenterBank's clients to benefit from expanded banking products and services.

Financial Forecast

Financially, excluding specific one-time merger costs, the merger is projected to be approximately 2% accretive to First Commonwealth’s earnings in the upcoming year, with further growth expected in the subsequent year as cost savings materialize. The anticipated tangible book value dilution is expected to be less than 2%, which includes the impacts of estimated one-time expenses.

Advisors for Both Companies

In navigating this significant merger, financial advisory roles have been filled by Raymond James & Associates, Inc. for First Commonwealth and Janney Montgomery Scott for CenterGroup, underscoring the importance of strategic financial guidance during this transition.

About First Commonwealth Financial Corporation

Headquartered in Indiana, Pennsylvania, First Commonwealth Financial Corporation operates a robust network of 125 community banking offices across 30 counties. Offering a comprehensive suite of financial services—from banking to insurance—First Commonwealth is well-positioned to expand its influence in the Ohio market through this acquisition.

About CenterGroup Financial Corporation

CenterGroup, through its subsidiary CenterBank, has cultivated a community-centric banking approach since its establishment in 2000. Known for personalized customer service and tailored financial solutions, CenterBank caters effectively to its clientele in Greater Cincinnati, a model that complements the broader objectives of First Commonwealth.

Frequently Asked Questions

What does First Commonwealth's acquisition of CenterGroup entail?

The acquisition includes the merger of CenterGroup into First Commonwealth, increasing First Commonwealth’s assets and presence in Cincinnati.

How will CenterGroup shareholders benefit from the merger?

CenterGroup shareholders will receive shares of First Commonwealth stock in exchange for their CenterGroup shares, enhancing their investment value.

When is the merger expected to be completed?

The merger is anticipated to finalize in the first half of 2025, pending regulatory and shareholder approvals.

What impact will the merger have on First Commonwealth's earnings?

The merger is expected to be accretive to First Commonwealth’s earnings, enhancing profitability significantly in the coming years.

Who are the advisors for this merger?

Raymond James & Associates and Janney Montgomery Scott are serving as financial advisors to First Commonwealth and CenterGroup, respectively.

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