Pennsylvania-based FNB has signed a definitive merger agreement to acquire Howard Bancorp in an all-stock transaction valued nearly $418m.

As agreed, Howard Bancorp-subsidiary Howard Bank will merge with and into FNB’s First National Bank of Pennsylvania.

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Transaction Details

The agreement entitles Howard stockholders to receive 1.8 shares of FNB common stock for each share they hold.

The two companies expect to integrate into a combined unit by early 2022. However, the completion of the transaction is subject to regulatory and stockholder approvals.

Benefits

The deal will bolster FNB’s footprint Mid-Atlantic Region including Maryland, the Washington, D.C., metropolitan area and northern Virginia.

Based in Baltimore, Maryland, Howard had around $2.6bn in total assets at 31 March 2021. It has 13 full-service banking offices in Baltimore and the greater Washington, D.C., area.

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The merger will create a combined entity with $41bn in total assets.

FNB expects the merger to be 4% accretive to earnings per share. It is also expected to improve FNB’s profitability metrics. At closing, the CET1 ratio is anticipated to remain unchanged on a pro forma basis at closing.

Quotes:

FNB chairman, president and CEO Vincent J. Delie, Jr., said: “FNB and Howard share a deep cultural commitment to client and community service. Combined, we will have the sixth largest deposit share in the Baltimore market, reinforcing our strong presence and presenting our organizations with the opportunity to deliver an enhanced experience for our customers, communities and dedicated teams.”

Howard Bancorp chairman and CEO Mary Ann Scully said: “Our partnership will add enviable scale and greater access to a comprehensive set of products, services and broader in-market expertise that we believe will result in an enhanced customer experience for both our core commercial base and our growing retail clientele.”