Regional lender WesBanco to buy smaller rival Premier Financial in $959 mln deal

Wesbanco

26/07/2024 14:37

July 26 (Reuters) - WesBanco  WSBC.O  has agreed to buy
smaller rival Premier Financial  PFC.O  in an all-stock deal
valued at $959 million, the lenders said on Friday, offering
another sign of growing consolidation in the U.S. regional
banking industry.
    
WHY IT IS IMPORTANT
Regional banks in the U.S. continue to remain more susceptible
to economic fluctuations triggered by high interest rates than
their so-called "too-big-to-fail" rivals.
    The failure of three mid-sized U.S. lenders reverberated
across the global financial system last year.
    In the aftermath, Treasury Secretary Janet Yellen had said
the current banking environment and pressures on earnings might
lead to some concentration in the sector, and regulators would
likely be open to such mergers.
    
CONTEXT
Earlier this year, regional lender UMB Financial  UMBF.O  agreed
to buy smaller rival Heartland Financial  HTLF.O  in an
all-stock deal valued at about $2 billion.
    United Bankshares  UBSI.O  also agreed to buy Piedmont
Bancorp in a deal valued at about $267 million in May.
    WesBanco expects the deal with Premier to help it expand
significantly and have more than 250 financial centers, as well
as loan production offices, across nine states.
    It has also agreed to raise capital to support the
transaction led by a $125 million contribution from private
investment firm Wellington Management.
    The deal is expected to create a combined bank with roughly
$27 billion in assets.
    
BY THE NUMBERS 
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.
    As of June 30, WesBanco had consolidated assets of around
$18.1 billion, while Premier's came in at roughly $8.8 billion.
    Premier stock has gained 5.7% so far this year, giving the
lender a market value of $912.5 million, according to LSEG data.
    
MARKET REACTION 
Premier shares rose nearly 1% in morning trading, while WesBanco
declined 7%.

 (Reporting by Manya Saini in Bengaluru; Editing by Shilpi
Majumdar)
 ((Manya.Saini@thomsonreuters.com; X: manya__saini;))