First Commonwealth Financial Corp. said Thursday that it would buy Southwest National Corp., Greensburg, Pa., for $268 million in a tax-free stock swap.

The deal would create a $4 billion-asset institution with 98 branches spanning most major western Pennsylvania markets.

The deal is expected to close in the first quarter of 1999. Each Southwest share would be exchanged for 2.9 shares of First Commonwealth common stock.

Southwest National, parent of Southwest Bank, is the largest locally based bank in Westmoreland County, operating 16 branches. The $847 million- asset banking company would become a subsidiary of First Commonwealth and gain four seats on the new holding company's board.

First Commonwealth, the $3.2 billion-asset parent of First Commonwealth Bank, has 82 branches in central and western Pennsylvania.

Company officials said the deal would add to earnings per share in fiscal year 1999.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.