First Commonwealth Financial, the holding company for First Commonwealth Bank, and CenterGroup Financial, the holding company for CenterBank, signed an agreement and plan of merger providing for the merger of CenterGroup with and into First Commonwealth in an all-stock transaction valued at approximately $54.6 million in the aggregate, based upon the closing stock price of First Commonwealth as of Dec. 17, 2024. Following the merger of CenterGroup with and into First Commonwealth, CenterBank will merge with and into First Commonwealth Bank.

The business combination is aimed at increasing First Commonwealth’s presence in the Cincinnati market, adding approximately $348.4 million of total assets1, three branch locations, a loan production office and a mortgage office to First Commonwealth’s Cincinnati franchise.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, CenterGroup shareholders will be entitled to receive a fixed exchange ratio of 6.10 shares of First Commonwealth common stock for each CenterGroup common share. The merger is expected to qualify as a tax-free reorganization and is expected to be completed in H1/25, subject to certain closing conditions, including approval by CenterGroup shareholders and customary bank regulatory approvals.

“We are pleased to welcome CenterBank into our organization, further expanding our commercial franchise within the attractive Cincinnati market. 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, president and CEO of First Commonwealth, said. “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.”

“We are excited to partner with First Commonwealth’s growing and profitable franchise and believe the cultural alignment between our organizations is the ideal next chapter for CenterBank’s customers, employees and shareholders,” Stewart Greenlee, president and CEO of CenterGroup, said. “We have admired First Commonwealth’s business and reputation within this market and are excited to be a part of its further expansion in Cincinnati. This combination also adds expanded banking products to our organization resulting in an enhanced experience for our customers, employees and community.”

Excluding certain one-time merger charges, the transaction is expected to be approximately 2% accretive to First Commonwealth’s earnings in 2025, and approximately 3% accretive to earnings in 2026 once anticipated cost savings are fully phased in. Estimated tangible book value dilution is expected to be less than 2%, including the impact of estimated one-time charges.

Raymond James & Associates is serving as financial advisor and Squire Patton Boggs (U.S.) is serving as legal counsel to First Commonwealth. Janney Montgomery Scott is serving as financial advisor and Dinsmore & Shohl is serving as legal counsel to CenterGroup.