First Commonwealth Financial in Indiana, Pa., has agreed to buy all 13 branches being divested by Huntington Bancshares as part of the approval to acquire FirstMerit.
The $6.7 billion-asset First Commonwealth said in a press release Wednesday that it will also gain $735 million in deposits and $115 million in loans. Six of the branches are in Canton, Ohio.
First Commonwealth said it will pay a 4.5% premium on deposits acquired in the deal, which is expected to close in the fourth quarter. First Commonwealth also said it plans to apply the cash received at closing to repay wholesale borrowings, which should lower its loan-to-deposit ratio below 100% and improve its net interest margin. The acquisition is expected to be immediately accretive to First Commonwealth's earnings per share.
"This acquisition is very consistent with our strategy in Ohio and complements our growing business in that region," Michael Price, First Commonwealth's chief executive, said in the release. "We have been pleased with our acquisition of First Community Bank in Columbus, and are well prepared for this next measured step in our Ohio expansion."
The $73 billion-asset Huntington agreed to sell the branches to secure Justice Department approval to buy the $26 billion-asset FirstMerit. The FirstMerit deal is expected to close later this quarter.