The acquisition of the Harrisburg-based bank will provide FNB with approximately $3.0 billion in total assets, including $2.4 billion in total deposits, $2.1 billion in total loans and 32 banking offices located in the Harrisburg, York, Lancaster, Reading and Lebanon MSAs.
The transaction will enhance FNB’s distribution and scale across Central Pennsylvania and strengthen its position as the largest Pennsylvania-based regional bank, moving its state deposit market share rank to a top five position.
With the acquisition of Metro, FNB will have $19.6 billion in assets, including $14.7 billion in total deposits, $13.7 billion in total loans and more than 300 full service banking offices.
Under the terms of the merger agreement, which has been approved by the board of directors of each company, shareholders of Metro will be entitled to receive 2.373 shares of FNB common stock for each common share of Metro. The exchange ratio is fixed and the transaction is expected to qualify as a tax-free exchange for shareholders of Metro.
"We are very excited about this transaction and the significant scale it adds to our franchise in Central Pennsylvania," said Vincent J. Delie, Jr., President and Chief Executive Officer of F.N.B. Corporation. "These markets have attractive demographics with tremendous revenue potential given the number of retail and commercial prospects.
"The meaningful size of this transaction will allow FNB to leverage the significant infrastructure investments we have made in the expansion of our product offerings and risk management systems. Additionally, Metro is a well-established institution with an excellent customer service culture and an attractive deposit base with modern branches in prime locations."
"We are enthused about our announced merger with FNB," said Metro Bancorp Chairman and CEO Gary Nalbandian. "The combination is a tremendous opportunity for everyone involved with Metro. It will deliver significant value to Metro shareholders and an opportunity for our employees and customers to partner with one of Pennsylvania’s fastest growing and best performing banks. FNB has tremendous financial strength, considerable resources and capabilities and values that are very similar to ours."
Upon consummation of the merger, FNB will appoint one current Metro Director to its Board of Directors.
The transaction meets all of FNB’s prescribed acquisition criteria including strong earnings per share accretion in the first full year of 4% on a GAAP basis and 6% on a cash basis, and an internal rate of return on capital invested of more than 20%.
"Tangible book value per common share is expected to be diluted by approximately 3% at closing supported by an earnback period of just under five years using the crossover method and less than 5 months on a pro forma earnings basis.
FNB and Metro expect to complete the transaction in the first quarter of 2016 after satisfaction of customary closing conditions, including regulatory approvals and the approval of the FNB and Metro shareholders. As is customary for FNB, the operations of Metro are expected to be fully integrated into FNB as of the transaction close date.
