NexTier, Farmers & Merchants to merge, with $1B combined assets, by 1stQ 2014
NexTier Bank of Butler and Farmers & Merchants Bank in Kittanning said on Tuesday that they plan to combine into a 24-branch bank with $1 billion in assets — NexTier’s second attempt to merge in less than three years.
The bank would retain the NexTier name and be headquartered in Butler. The privately owned banks did not disclose the value of the deal.
With about $512 million in assets, NexTier operates 15 branches in Butler, Allegheny and Armstrong counties. Farmers & Merchants, which has $425 million in assets, operates nine branches in Armstrong County.
“There are clear, strategic benefits to combining the two highly complementary organizations, including growth opportunities,” said a statement from Mark Snyder, chairman of NexTier Inc. and a member of the F&M board.
NexTier agreed to merge with Northwest Bancshares, Warren, in late 2010. But just weeks before the $20.3 million deal was to close, Northwest canceled the deal after regulators ordered it to pay fines and depositor refunds up to $700,000 over allegations that it underpaid interest on accounts.
The deal on Tuesday marks the latest chapter in the 135-year history of the bank. Founded in 1878 as Citizens National Bank, the institution changed its name to NexTier in 2005, following a legal battle with Citizens Bank over the name when the Rhode Island-based bank entered Western Pennsylvania in late 2001 by acquiring Mellon Bank’s branches.
Farmers & Merchants’ owner, the Snyder Group, owns about 81 percent of NexTier. The business investment group based in Kittanning acquired a controlling 51 percent stake in NexTier in 2011.
“This combination allows our organizations to not only stay viable, but to flourish,” despite challenges from low interest rates and added regulations, Snyder said.
The two banks plan to retain all 15 branches of NexTier and all nine of Farmers & Merchants, as well as all 260 workers employed at the two banks combined.
“We don’t expect to have any employees of any sort laid off,” said Maria Smathers, spokeswoman for NexTier, which employs 160 people.
Subject to regulatory approvals, the merger is expected to be completed in the first-quarter of 2014.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or [email protected].