Mergers And Acquisitions

12 Months Ended

Dec. 31, 2012

Mergers And Acquisitions

3.     Mergers and Acquisitions

On January 1, 2012, the Corporation completed its acquisition of Parkvale, a unitary savings and loan holding company based in Monroeville, Pennsylvania. On the acquisition date, Parkvale had $1,815,663 in assets, which included $937,350 in loans, and $1,505,671 in deposits. The acquisition, net of equity offering costs, was valued at $140,900 and resulted in the Corporation issuing 12,159,312 shares of its common stock in exchange for 5,582,846 shares of Parkvale common stock. The assets and liabilities of Parkvale were recorded on the Corporation’s balance sheet at their fair values as of January 1, 2012, the acquisition date, and Parkvale’s results of operations have been included in the Corporation’s consolidated statements of income and comprehensive income since that date. Parkvale’s banking affiliate, Parkvale Bank, was merged into FNBPA on January 1, 2012. In conjunction with the completion of this acquisition, the Corporation fully repaid the $31,762 of Parkvale preferred stock previously issued to the UST under the Capital Purchase Program (CPP). The warrant issued by Parkvale to the UST was converted into a warrant to purchase up to 819,640 shares of the Corporation’s common stock. The warrant expires December 23, 2018 and has an exercise price of $5.81. Based on the purchase price allocation, which was completed in the fourth quarter of 2012, the Corporation recorded $106,602 in goodwill and $16,033 in core deposit intangible as a result of the acquisition. None of the goodwill is deductible for income tax purposes.

During 2012, the Corporation recorded merger and integration charges of $7,394 primarily associated with the Parkvale acquisition.

The following table summarizes the amounts recorded on the consolidated balance sheet in conjunction with the Parkvale acquisition:

Fair value of consideration paid:
Common stock issued, net of offering costs	$	136,441
Warrant assumed		4,459
Total consideration paid		140,900
Fair value of identifiable assets acquired:
Cash and cash equivalents		203,538
Securities		486,186
Loans		919,480
Other intangible assets		16,033
Accrued income and other assets		118,648
Total identifiable assets acquired		1,743,885
Fair value of liabilities assumed:
Deposits		1,525,253
Borrowings		171,606
Accrued expenses and other liabilities		12,728
Total liabilities assumed		1,709,587
Fair value of net identifiable assets acquired		34,298
Goodwill recognized	$	106,602

On January 1, 2011, the Corporation completed its acquisition of CBI, a bank holding company based in Clarks Summit, Pennsylvania. On the acquisition date, CBI had $625,570 in assets, which included $445,271 in loans, and $561,775 in deposits. The transaction, valued at $75,547, resulted in the Corporation paying $17,203 in cash and issuing 5,941,287 shares of its common stock in exchange for 1,719,978 shares of CBI common stock. The assets and liabilities of CBI were recorded on the Corporation’s balance sheet at their fair values as of January 1, 2011, the acquisition date, and CBI’s results of operations have been included in the Corporation’s consolidated statements of income and comprehensive income since that date. CBI’s banking affiliate, Community Bank and Trust Company, was merged into FNBPA on January 1, 2011. Based on the purchase price allocation, the Corporation recorded $40,232 in goodwill and $4,785 in core deposit intangible as a result of the acquisition. None of the goodwill is deductible for income tax purposes.

The following pro forma information for the years ended December 31, 2011 and 2010 reflects the Corporation’s estimated consolidated results of operations as if the Parkvale and CBI acquisitions occurred on January 1, 2010, unadjusted for potential cost savings:

Year Ended December 31	2011		2010
Revenue (net interest income and non-interest income)	$	486,818	$	445,940
Net income		96,299		66,569
Net income available to common stockholders		94,711		64,981
Earnings per common share – basic		0.69		0.49
Earnings per common share – diluted		0.69		0.49

Parkvale’s results of operations are included in the Corporation’s results for the entire year of 2012 and CBI’s results of operations are included in the Corporation’s results for the entire years of 2012 and 2011.

Pending Acquisitions

On October 22, 2012, the Corporation announced the signing of a definitive merger agreement to acquire ANNB, a bank holding company with approximately $437,000 in total assets based in Annapolis, Maryland. The transaction is valued at approximately $51,000. Under the terms of the merger agreement, ANNB shareholders will be entitled to receive 1.143 shares of the Corporation’s common stock for each share of ANNB common stock. In addition to the stock consideration, ANNB shareholders may receive up to $0.36 per share in cash for each share of ANNB common stock they own, dependent upon ANNB’s ability to resolve a credit-related matter. ANNB’s banking affiliate, BankAnnapolis, will be merged into FNBPA. The transaction is expected to be completed in the second quarter of 2013, pending regulatory approvals, the approval of shareholders of ANNB and the satisfaction of other closing conditions.

On February 19, 2013, the Corporation announced the signing of a definitive merger agreement to acquire PVF, a bank holding company with approximately $782,000 in total assets based in Solon, Ohio. The transaction is valued at approximately $106,300. Under the terms of the merger agreement, PVF shareholders will be entitled to receive 0.3405 shares of the Corporation’s common stock for each share of PVF common stock. PVF’s banking affiliate, Park View Federal Savings Bank, will be merged into FNBPA. The transaction is expected to be completed in the third quarter of 2013, pending regulatory approvals, the approval of shareholders of PVF and the satisfaction of other closing conditions.