WesBanco CEO Sees ‘Synergies’ with Premier Financial Merger

YOUNGSTOWN, Ohio – Discussions about a proposed merger between West Virginia-based WesBanco and Premier Financial Corp. began in January, WesBanco’s president and CEO said during a conference call Friday.

“We’ve known Premier for several years, and I started talking to Gary [Small, Premier president and CEO], back in January,” Jeff Jackson said during a call with analysts Friday morning. “As we got to talking and some of our directors talked to each other, we realized we had a lot of synergies and similar characteristics.”

By February, WesBanco started its due diligence regarding a potential acquisition and discovered just how similar the two institutions are.

“It almost feels like we’re acquiring a smaller version of ourselves because of the rural and metro market,” Jackson said. “We liked their granular rural deposit bank and the market from a growth perspective,” in northern Ohio. “We feel really great about this.”

Jackson said the merger would be completed with “as little employee disruption as possible.”

WesBanco, based in Wheeling, W.Va., and Premier announced Friday that the two companies signed a definitive merger agreement that would result in the creation of a regional financial institution of more than $27 billion in assets, according to a press release announcing the deal. 

The merger would make WesBanco the eighth-largest bank in Ohio, based on deposit market share.

Small expects the merger to close during the first quarter of 2025, according to a regulatory filing.

“The combination of WesBanco and Premier makes for an excellent strategic fit,” Small said in a statement. “Both organizations value community level banking, are well aligned from a culture perspective, and are focused on performance. 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.”

Premier said in a statement that it would take an additional three and six months — pending regulatory and shareholder approval and other matters related to closing — for the bank to assume the WesBanco name.

Mahoning Valley Market President Josh Toot is expected to remain in his position “and ensure our tradition of providing customer-centric solutions continues.”

“As a result of this partnership, we will offer expanded products and services to serve our customers even better and our combined organization will include over 250 full-service branches, as well as 17 loan production offices offering commercial and/or mortgage services, to continue the tradition of putting the customer first,” Premier’s statement added.

Customers will continue to see the same faces in their branches, while business customers and Wealth clients will continue to work closely with their banker as they always have, the statement continued. “We ask that customers continue to bank as they always do, using their same checks, debit cards, and mobile app. We will communicate any changes far in advance.”

Dan Weiss, WesBanco’s chief financial officer, reported during the conference call that the 100% stock deal is worth approximately $959 million, and noted there would be no changes in executive leadership. Premier shareholders would own 30% of the company, and WesBanco shareholders would own 62%, according to a news release.

“We also expect to invest $13 million in the branch network,” which includes signage and branch upgrades, he said.

Weiss also noted that the banking and loan activity is expected to improve, as WesBanco is forecasting two interest rate cuts by the end of this year, and three additional cuts in 2025.

When the transaction is completed, 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 primarily throughout northern Ohio, as well as in southern Michigan and northeastern Indiana. WesBanco will now have a presence in nine states.

This merger comes less than five years after the completion of the merger of United Community Financial Corp., which was the holding company of Home Savings Bank, and First Defiance Financial Corp. That merger led to the formation of Premier Bank.

According to the release announcing the merger, the agreement was unanimously approved by the board of directors of both companies. Through the agreement, WesBanco will exchange shares of its common stock for all 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.

WesBanco also announced Friday 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 Aug. 1. 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.

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.

As of June 30, 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, 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 billion.

“It’s an exciting and momentous day for WesBanco,” Jackson said of the merger. “The announcement is evidence of solid execution of our long-term growth strategy, as Premier is a great strategic, cultural and financial fit.”

Premier also announced its second quarter results Friday. However, Premier canceled its July 31 conference call regarding the second quarter.

Net income for the second quarter of 2024 was $16.2 million, or 45 cents per diluted common share, compared with $48.4 million in the second quarter of 2023. Those results included the impact of the disposition of Premier’s insurance agency, First Insurance Group, for a net gain on sale after transaction costs of $32.6 million pre-tax. Premier sold First Insurance Group to Risk Strategies in a deal announced at the end of June 2023. Excluding the impact of that transaction, the second-quarter 2023 earnings were $24.2 million, or68 cents per diluted common share.

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