Historic banks plan merger

Two century-old banks in Armstrong County -- Merchants National Bank of Kittanning and Farmers National Bank of Kittanning -- plan to merge in a stock-swap deal, they said Tuesday.

The combined institution will be known as "Farmers & Merchants Bank of Western Pennsylvania." It will have eight branches and eight automated teller machines in Armstrong County, once the conversion of each bank occurs on March 31.

"We tried all kinds of legal searches to try to shorten that name, but couldn't," said Farmers CEO Richard Krauland, who will become the merged bank's CEO. "F&M Bank" would have been nice and short, he said. But Lancaster County's Franklin & Marshall College -- better known as "F&M" -- stood in the way.

"We didn't want to get rid of either name," said Krauland. "We kept them out of historical respect for the two names." Merchants was founded in 1897 and Farmers in 1884.

Merchants CEO Sally Anderson will become the merged bank's chief financial officer.

Farmers has three branches and $177 million in assets. Merchants has four branches and $158 million in assets. The banks will open an eighth branch in Leechburg in April, soon after the merger is completed.

Aside from retaining each bank's branches, no layoffs are planned. Merchants employs 50 people, and Farmers employs 28.

On its own, each bank's lending limit is about $2 million. But the combined bank will be able to lend up to $4.5 million, said Krauland, which should help the bank serve the credit needs of small businesses as they grow.

Both companies are privately owned. The deal, the value of which was not disclosed, is subject to shareholder and regulatory approvals.