WesBanco, Inc. and Premier Financial Corp. agreed to execute a definitive merger agreement, unanimously agreed to by the boards of directors of both companies, to create a regional financial services institution with approximately $27 billion in total assets.
The two organizations are described as having “highly compatible cultures and business models” and will become the eighth largest bank in Ohio, based on deposit market share, upon completion of the “transformative” merger, according to a joint press release. The combined company will have more than 250 financial centers, as well as loan production offices, across nine states.
As of June 30, WesBanco had consolidated assets totaling approximately $18.1 billion, including $13.4 billion in deposits, $12.3 billion in loans, and $2.5 billion in shareholders’ equity. As of the same date, Premier had approximately $8.8 billion in total assets, including $7.2 billion in deposits, $6.8 billion in loans, and shareholders’ equity totaling $1 billion.
The merger is expected to qualify as a tax-free reorganization, meaning the banks must demonstrate the transaction satisfies three judicial requirements – continuity of interest, continuity of business enterprise, and business purpose, per Section 368(A)(1) of the Internal Revenue Code of 1986.
“Today is an exciting day in WesBanco’s 155-year history as we announce our proposed merger with Premier and mark another milestone in our long-term growth strategy,” WesBanco President and CEO Jeff Jackson said in the release. “This transformative merger will bring together two high-caliber institutions to create a community-focused, regional financial services partner strongly positioned to serve the unique needs of both our new and legacy communities. We are pleased to welcome Premier’s customers and employees to the WesBanco family and look forward to delivering exceptional customer experiences to our newest markets through a broader offering of banking and wealth management services.”
Jackson touted WesBanco’s reputation for soundness, profitability, customer service, and community development efforts, noting its multiple recent national commendations.
“We look forward to extending our legacy through this merger and bringing even greater value to our customers, teams, communities and shareholders,” he added.
Officials of both organizations said they are optimistic about their plans to organize their combined operations around customer services and product delivery with as little employee disruption as possible.
"The combination of WesBanco and Premier makes for an excellent strategic fit. Both organizations value community level banking, are well aligned from a culture perspective, and are focused on performance,” Premier President and CEO Gary Small said. “The expanded reach of the organization will serve as a catalyst for growth and increased investment in products and services, to the benefit of all stakeholders: customers, associates, shareholders, as well as the communities we serve.”
WesBanco also announced it has entered into subscription agreements with investors to raise capital to support the merger, led by a $125 million investment from Wellington Management. Additional investors include Glendon Capital Management LP and Klaros Capital. The company plans to issue $200 million in common stock, in aggregate.
Excluding certain merger-related charges and transaction-related provisions for credit losses, the transaction, with cost savings fully phased in, is anticipated to be more than 40 percent accretive to 2025 earnings. Estimated tangible book value dilution at closing of 13 percent is expected to be earned back in approximately 2.8 years. The merger is subject to various customary conditions, including the approvals of the appropriate regulatory authorities and approvals by the shareholders of both WesBanco and Premier.
The transaction is expected to be completed during the first quarter of 2025. Upon completion of the merger, WesBanco’s board of directors will absorb four members of Premier’s board.