FNB Corp (NYSE: FNB) signed a definitive agreement to acquire Howard along with its wholly-owned subsidiary at a consideration of $21.96 per share or a market value of nearly $418 million.
Acquisition to deepen FNB’s presence: FNB to acquire Howard and its wholly-owned banking subsidiary (Howard Bank). The transaction is valued at $21.96 per share, or a fully diluted market value of approximately $418 million, based upon the July 12, 2021 closing price. Howard has approximately total assets worth $2.6 billion, total deposits of $2 billion, and $1.9 billion in total loans and leases on March 31, 2021. In addition, Howard operates 13 full-service banking offices in Baltimore. As per FNB, the merger will significantly enhance the company’s growth trajectory and will strengthen FNB’s presence in Mid-Atlantic Region, including Maryland, Washington, D.C., metropolitan area, and northern Virginia.
Strengthen FNB’s book: As per the company, following the expected merger with Howard, FNB will have total assets of $41 billion of total assets, total deposits of $32 billion, and total loans of $27 billion. The merger has been approved by the Board of Directors of FNB and Howard. As per the merger agreement, stockholders of Howards entitle to receive 1.8 shares of FNB for each share of Howard stock they own. The exchange ratio is fixed, and the transaction is expected to qualify as a tax-free exchange for Howard’s stockholders. Post the completion of the merger, Howard Bank merger into FNB’s subsidiary, First National Bank of Pennsylvania.
As per the management, both the companies share a deep commitment to client and community services. Post the merger; the combined entity will have the sixth-largest deposit share in the Baltimore market. It will reinforce the company’s strong presence and provide a massive opportunity to the combined entity to deliver a better service and enhanced experience to the customers and community. FNB expects the merger to be 4% accretive to earnings and expects the transaction to complete in early 2022.