In a landmark move within the financial services sector, Premier Financial has announced its agreement to merge with WesBanco in an all-stock transaction. The consolidation is set to forge a powerhouse regional financial institution boasting approximately $27 billion in assets, a significant milestone for both lenders.
The official statement from the banks revealed this exciting development on a Friday that has already stirred considerable interest in the market. Under the terms of the merger, shareholders of Premier Financial will receive 0.80 shares of WesBanco for each share they hold, translating into a total valuation of about $959 million or an estimated $26.66 per share, based on WesBanco’s closing pricing from the previous Wednesday.
Additionally, Premier Financial indicated that the overall valuation of the deal might reach around $987 million when factoring in Wednesday's closing prices from WesBanco. In order to underpin this merger’s smooth transition, WesBanco is planning to raise an impressive $200 million from select investors, prominently featuring a substantial contribution of $125 million from Wellington Management.
This capital infusion is set to be finalized by August 1. The merger is subject to the requisite approvals from regulatory bodies and the shareholders of both lending institutions, and is anticipated to reach completion by the first quarter of 2025. Upon the merger's finalization, shareholders from Premier will hold a 30% stake in the newly-formed entity, while the legacy shareholders of WesBanco are projected to retain a dominant 62% ownership.
Furthermore, shares resulting from the capital raise are estimated to constitute 8% of the combined organization. Premier Financial’s Chief Executive Officer, Gary Small, emphasized the strategic advantages of this merger in a formal statement, stating, “The combination of WesBanco and Premier makes for an excellent strategic fit.
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.” Financial analysts predict the transaction will yield an annual earnings increase of over 40% in 2025, assuming full cost synergies are realized post-merger, albeit excluding certain charges tied to the merger. WesBanco is poised to elevate its network to over 250 financial centers across nine states through this merged entity.
The transaction will notably expand its footprint with 73 additional financial centers in northern Ohio, southern Michigan, and northeastern Indiana. As disclosed through recent reports, WesBanco reported consolidated assets amounting to approximately $18.1 billion at the end of June, with $13.4 billion in deposits and total loans standing at $12.3 billion.
Meanwhile, Premier Financial’s assets reflected $8.8 billion as of June 30, with $7.2 billion in deposits and loans totaling $6.8 billion. Analysts estimate that the merged entity will stand as the eighth-largest bank in Ohio based on deposit market share. On the financial performance front, both institutions released their second-quarter results on the same day as the merger announcement.
WesBanco reported an adjusted earnings drop to $0.49 per share, a decline from $0.71 recorded a year prior. Concurrently, Premier Financial's core earnings per share decreased to $0.45 from $0.68 in the previous term. From a stock market perspective, the trading price for WesBanco was noted at $32.42, reflecting a change of -1.87, which corresponds to a percentage change of -5.44.
As the financial landscape evolves, stakeholders will closely watch how this merger impacts both companies and the broader financial services industry in the regional marketplace..