Two northeastern Pennsylvania banks to merge
Peoples Financial Services in Scranton, Pennsylvania, has agreed to buy FNCB Bancorp in Dunmore, Pennsylvania, for roughly $129 million of stock.
The deal would create a holding company with almost $5.5 billion of assets and a market capitalization of roughly $444 million that operates under the Peoples Financial Services name. After the merger, the company would be No. 2 in deposit market share in the Scranton-Wilkes Barre metro area, according to a press release on Wednesday. The headquarters for the combined company would be in Scranton, while the bank unit would be based in Dunmore.
The $3.7 billion-asset Peoples has 28 offices in Pennsylvania, New Jersey and New York. FNCB, which has $1.8 billion of assets, has 16 branches throughout northeastern Pennsylvania.
The transaction is expected to close in the first half of 2024.
The combined company is expected to produce annual net income of $63.6 million and annual earnings per share of $6.29. Annual cash dividends per share are anticipated to be $2.47, while return on average tangible common equity would be 15.8%, according to the press release.
Craig Best, Peoples' current CEO, is expected to lead the combined holding company and bank while Gerard Champi, FNCB's president and CEO, would serve as president. A year after the merger closes, Best is expected to retire as CEO and Champi would take over that role. Best would remain on the board after that point. Thomas Tulaney, Peoples' chief operating officer, is expected to continue in that role until the one-year anniversary of the deal and then take over as president.
"This strategic merger accelerates our objective of creating a dynamic, top-tier Pennsylvania franchise in order to help our communities become a better place to live and work while offering the best services possible to our customers," Best said in the press release. "Notably, this transaction will create a more diversified and liquid balance sheet, which will enable the combined company to accelerate its organic growth strategy."
John Anderson, Peoples' chief financial officer, should continue in that role for the combined institution after the merger closes, while James Bone Jr., FNCB's chief financial officer, would serve as chief operations officer.
The combined holding company would have 16 directors with eight each from Peoples and FNCB. William Aubrey II, current chairman of Peoples, would continue in that role for the combined company. FNCB's current chair, Louis DeNaples Sr., would serve as vice chair after the transaction closes.
Both boards unanimously voted in favor of the transaction.
The price is based on a 20-day volume weighted average stock price for Peoples' common stock of $44.13 as of Tuesday. That means the implied price per share of FNCB's common stock would be roughly $6.44. FNCB shareholders would receive 0.1460 shares of Peoples common stock for each share of FNCB they own, the press release said.
After the merger, Peoples shareholders are expected to own roughly 71% of the stock while FNCB's investors would own the other 29%.
