Integrity Bancshares in Camp Hill, Pa., first approached S&T Bancorp about an $8 million loan before eventually agreeing to sell itself to the Indiana, Pa., company.

James Gibson, Integrity's chairman, president and chief executive, originally had a discussion with Todd Brice, S&T's president and CEO, about Integrity issuing S&T subordinated debt so it could redeem $8 million in preferred stock. Gibson also discussed such a transaction with another, unnamed bank president, S&T disclosed in a recent regulatory filing.

Those conversations took place at a May 12 meeting of the Pennsylvania Bankers Association. The filing noted that, in prior months, Gibson and Brice had held a number of informal conversations, some of which touched on the topic of merging, though specific proposals were made.

S&T issued Integrity a commitment letter in July for the subordinated debt issue, offering a faster turnaround and better terms than the other bank, the filing said. A month later, members of both banks, joined by a representative from Keefe, Bruyette & Woods, held an informal meeting to discuss a potential merger.

S&T offered $147 million, or $50 a share, in cash and stock at the early August meeting. Gibson warned Brice that Integrity's board would likely not approve of the price. Still, the companies executed a non-disclosure agreement so they could exchange non-public information.

By mid-August, S&T raised its bid to $150 million, or $50.65 a share.

Integrity received a competing offer from an unnamed bank on Aug. 19 priced at $54 a share, prompting a meeting between Integrity's board and Sandler O'Neill to go over the competing offers.

By mid-September, Integrity and the unnamed bank "mutually agreed" that their business models "did not align, and negotiations regarding a potential merger ceased."

S&T's final offer, submitted on Sept. 16, came in at $53 a share, with 80% of the consideration involving stock, or $53.50 a share with 85% of the payout in the form of stock.

Integrity's board looked at information from two, unnamed investment banks that determined that the multiple to tangible book value would be "the second highest of all bank mergers in the United States since the end of 2008." (The final premium was 262% of Integrity's tangible book value.)

However, S&T found out that it could not meet its projected expense cuts, so the parties agreed to lower the price to $52.25 a share. One more adjustment of the cost-cutting analysis led the companies to settle on $52.50 a share.

The deal was announced on Oct. 30.

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