First Commonwealth to expand Cincinnati footprint with CenterGroup acquisition

First Commonwealth Financial Corporation (NYSE: FCF), the holding company for First Commonwealth Bank, announced its acquisition of CenterGroup Financial, Inc., the parent company of CenterBank, in a transaction valued at $54.6 million. The all-stock merger agreement is poised to significantly enhance First Commonwealth’s Cincinnati market expansion efforts.

The acquisition will integrate CenterGroup’s $348.4 million in assets, including three Cincinnati branch locations, a loan production office, and a mortgage office, into First Commonwealth’s operations. With this expansion, the Pennsylvania-headquartered financial services provider aims to bolster its commercial banking strategy by inheriting a client base that is 65% business customers, aligning with its focus on commercially focused growth.

Strategic Benefits and Market Alignment

This merger highlights First Commonwealth Bank’s commitment to growth in Ohio, particularly in Cincinnati, a region critical to its commercial banking strategy. Mike Price, President and CEO of First Commonwealth Financial Corporation, emphasized the cultural alignment and operational synergies between the two organizations. He stated that the acquisition reinforces their ability to attract talent, deepen relationships, and expand their Cincinnati branch locations to meet rising demand.

Stewart Greenlee, President and CEO of CenterGroup Financial, Inc., described the deal as an “ideal next chapter” for CenterBank’s customer base. Greenlee highlighted the expanded banking products and services, which will result in a seamless experience for customers and employees, strengthening CenterBank’s customer base and community ties.

Financial Details and Timeline

First Commonwealth’s acquisition includes a fixed exchange ratio of 6.10 shares of First Commonwealth stock for each CenterGroup share. The tax-free reorganization merger is structured to close in the first half of 2025, contingent upon regulatory and shareholder approvals.

The transaction is expected to boost First Commonwealth Bank’s earnings by 2% in 2025 and 3% in 2026 once cost savings are fully phased in. Tangible book value dilution is projected to remain below 2%, even after factoring in one-time charges associated with the deal.

Expansion Goals and Future Prospects

With over 125 community banking offices across Pennsylvania and Ohio, First Commonwealth Bank aims to solidify its Cincinnati market expansion and capitalize on new opportunities in Ohio. The acquisition supports its commercially focused growth by expanding its reach in major Ohio cities, including Cleveland, Columbus, and Cincinnati.

The addition of Cincinnati branch locations aligns with the company’s long-term vision to strengthen its commercial banking strategy and broaden its footprint in a region renowned for business activity. The integration of CenterBank’s customer base further cements First Commonwealth’s ability to offer tailored solutions to both businesses and individuals.

Advisors

Raymond James & Associates, Inc., and Squire Patton Boggs (US) LLP served as advisors to First Commonwealth Financial Corporation, while Janney Montgomery Scott and Dinsmore & Shohl, LLP represented CenterGroup Financial, Inc.