WesBanco and Premier Financial have executed a definitive agreement and plan of merger providing for the merger of Premier with and into WesBanco. Jeff Jackson, president and CEO of WesBanco, and Gary Small, president and CEO of Premier, made the joint announcement.
Under the terms of the agreement, which has been unanimously approved by the board of directors of both companies, WesBanco will exchange shares of its common stock for all of the outstanding shares of Premier common stock, in an all-stock transaction. 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 upon the effective time of the merger, for aggregate merger consideration valued at approximately $959 million, or $26.66 per share, based on WesBanco’s closing stock price of $33.32 as of July 24, 2024. The transaction values Premier at a price to June 30, 2024 tangible book value per share of 142% and a price to mean analyst estimated 2024 earnings per share of 12.9 times. The merger is expected to qualify as a tax-free reorganization.
WesBanco has also entered into subscription agreements with investors to raise capital to support the merger, led by a $125 million investment from Wellington Management. Additional investors include Glendon Capital Management and Klaros Capital. In aggregate, $200 million of WesBanco common stock will be issued. The capital raise is expected to close on Aug. 1, 2024. The proceeds of the capital raise are expected to support the pro forma bank’s balance sheet and regulatory capital ratios.
Upon completion of the merger, the shares issued to Premier shareholders are expected to comprise 30% of the outstanding shares of the combined company, the shares issued in the capital raise are expected to represent 8% of the combined company and 62% of the outstanding shares of the combined company are expected to be held by legacy WesBanco shareholders.
“Today is an exciting day in WesBanco’s 155-year history as we announce our proposed merger with Premier and mark another milestone in our long-term growth strategy,” Jackson said. “This transformative merger will bring together two high-caliber institutions to create a community-focused, regional financial services partner strongly positioned to serve the unique needs of both our new and legacy communities. We are pleased to welcome Premier’s customers and employees to the WesBanco family and look forward to delivering exceptional customer experiences to our newest markets through a broader offering of banking and wealth management services. WesBanco has built an outstanding reputation for soundness, profitability, customer service, employer of choice and community development, as evidenced by multiple recent national accolades. We look forward to extending our legacy through this merger and bringing even greater value to our customers, teams, communities and shareholders.”
With compatible cultures and business models, the proposed merger will create a regional financial services institution with approximately $27 billion in assets and an increased presence in Indiana that serves customers in nine states.
Excluding certain merger-related charges and transaction related provision for credit losses, the transaction, with cost savings fully phased in, is anticipated to be more than 40% accretive to 2025 earnings. Estimated tangible book value dilution at closing of 13% is expected to be earned back in approximately 2.8 years, using the “cross-over” method. The merger is subject to a number of customary conditions, including the approvals of the appropriate regulatory authorities and approvals by the shareholders of both WesBanco and Premier. It is expected that the transaction should be completed during Q1/25. Upon completion of the merger, four members of Premier’s current board of directors will be appointed to WesBanco’s board of directors.
“The combination of WesBanco and Premier makes for an excellent strategic fit. Both organizations value community level banking, are well aligned from a culture perspective, and are focused on performance,” Small said. “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: customers, associates, shareholders, as well as the communities we serve.”
At June 30, 2024, WesBanco had consolidated assets of approximately $18.1 billion, deposits of $13.4 billion, total loans of $12.3 billion and shareholders’ equity of $2.5 billion. At June 30, 2024, Premier had consolidated assets of approximately $8.8 billion, deposits of $7.2 billion, total loans of $6.8 billion and shareholders’ equity of $1.0 billion.
When the transaction is consummated, WesBanco will have more than 250 financial centers, as well as loan production offices, across nine states. The transaction will expand WesBanco’s franchise by 73 financial centers located primary throughout northern Ohio, as well as in southern Michigan and northeastern Indiana. Officials of both organizations are optimistic that organizing around customer services and product delivery can be accomplished with as little employee disruption as possible.
As a condition to WesBanco’s willingness to enter into the agreement, all of the directors and executive officers of Premier have entered into voting agreements with WesBanco pursuant to which they have agreed to vote their shares in favor of the merger.
Financial advisors involved in the transaction were Raymond James & Associates, representing WesBanco, and Piper Sandler, representing Premier. Raymond James & Associates also served as placement agent on the private placement.
Legal representations in the transaction include Phillips, Gardill, Kaiser & Altmeyer and K&L Gates for WesBanco, Nelson Mullins Riley & Scarborough for Premier, Hunton Andrews Kurth for Raymond James and Schulte Roth & Zabel for Wellington Management.
