NexTier Bank in Butler and Farmers & Merchants Bank of Western Pennsylvania in Kittanning will merge to create a bank with nearly $1 billion in assets.
NexTier, which has $512 million in assets, did not disclose the price it would pay for the $425 million-asset parent of F&M Bank. The bank will have 24 branches. The deal "is expected to generate cost synergies and drive a significant improved cost structure," NexTier said in a press release Tuesday.
The banks have the same majority shareholders, a NexTier spokeswoman said. She said the banks are still discussing the final ownership structure, including which institution will issue shares at closing.
"This is a particularly challenging time for the financial services industry," Snyder added. "With an ever-changing regulatory landscape and an unprecedented low interest rate environment ultimately affecting income, smaller competitors will be forced to consider their options. This combination allows our organizations to not only stay viable, but to flourish."
NexTier expects to close on the acquisition in the first quarter.