Premier Financial Corp. Merging with WesBanco in $959M Stock Transaction
YOUNGSTOWN, Ohio – Premier Financial Corp. will merge with WesBanco Inc., the companies announced Friday.
At the completion of the merger, Premier shareholders will own 30% of combined company and WesBanco shareholders will own 62%, according to Jeff Jackson, president and CEO of WesBanco, and Gary Small, president and CEO of Premier.
As of June 30, Wesco had total assets of $18.1 billion; Premier had assets of $8.8 billion.
Here’s the full news release:
Under the terms of the Agreement, which has been unanimously approved by the board of directors of both companies, WesBanco will exchange shares of its common stock for all of the outstanding shares of Premier common stock, in an all-stock transaction. Premier shareholders will be entitled to receive 0.80 of a share of WesBanco common stock for each share of Premier common stock they own upon the effective time of the merger, for aggregate merger consideration valued at approximately $959 million, or $26.66 per share, based on WesBanco’s closing stock price of $33.32 as of July 24, 2024. The transaction values Premier at a price to June 30, 2024 tangible book value per share of 142% and a price to mean analyst estimated 2024 earnings per share of 12.9 times. The merger is expected to qualify as a tax-free reorganization.
WesBanco also announced today that 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. In aggregate, $200 million of WesBanco common stock will be issued. The capital raise is expected to close on August 1, 2024. The proceeds of the capital raise are expected to support the pro forma bank’s balance sheet and regulatory capital ratios.
Upon completion of the merger, the shares issued to Premier shareholders are expected to comprise 30% of the outstanding shares of the combined company, the shares issued in the capital raise are expected to represent 8% of the combined company, and 62% of the outstanding shares of the combined company are expected to be held by legacy WesBanco shareholders.
Jeff Jackson, President and Chief Executive Officer of WesBanco, stated, “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. 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. WesBanco has built an outstanding reputation for soundness, profitability, customer service, employer of choice and community development, as evidenced by multiple recent national accolades. We look forward to extending our legacy through this merger and bringing even greater value to our customers, teams, communities and shareholders.”
With highly compatible cultures and business models, the proposed merger will create a regional financial services institution with approximately $27 billion in assets, significant economies of scale, and strong pro forma profitability metrics. With complementary and contiguous geographic footprints, the combined company would be the 8th largest bank in Ohio, based on deposit market share, have increased presence in Indiana, and serve customers in nine states.
Excluding certain merger-related charges and transaction related provision for credit losses, the transaction, with cost savings fully phased in, is anticipated to be more than 40% accretive to 2025 earnings. Estimated tangible book value dilution at closing of 13% is expected to be earned back in approximately 2.8 years, using the “cross-over” method. The merger is subject to a number of customary conditions, including the approvals of the appropriate regulatory authorities and approvals by the shareholders of both WesBanco and Premier. It is expected that the transaction should be completed during the first quarter of 2025. Upon completion of the merger, four members of Premier’s current Board of Directors will be appointed to WesBanco’s Board of Directors.
“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,” said Gary Small, President and Chief Executive Officer of Premier. “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.”
At June 30, 2024, WesBanco had consolidated assets of approximately $18.1 billion, deposits of $13.4 billion, total loans of $12.3 billion, and shareholders’ equity of $2.5 billion.
At June 30, 2024, Premier had consolidated assets of approximately $8.8 billion, deposits of $7.2 billion, total loans of $6.8 billion, and shareholders’ equity of $1.0 billion.
When the transaction is consummated, WesBanco will have more than 250 financial centers, as well as loan production offices, across nine states. The transaction will expand WesBanco’s franchise by 73 financial centers located primary throughout northern Ohio, as well as in southern Michigan and northeastern Indiana. Officials of both organizations are optimistic that organizing around customer services and product delivery can be accomplished with as little employee disruption as possible.
Published by The Business Journal, Youngstown, Ohio.
