In late February, Hermitage, Pennsylvania-based F.N.B. Corp (NYSE:FNB) announced that it would acquire Solon, Ohio-based PVF Capital Corporation (NASDAQ:PVFC) in an all-stock deal valued at over $100 million. The deal would create a moderate-sized regional bank with a significant presence in the Pittsburgh and Cleveland metro areas, as well as in several smaller industrial cities between them.
The merger is the latest transaction that involves beaten-down banks in an economically challenged region of the United States. Consumer-focused banks that operate in northeastern Ohio and western Pennsylvania were disproportionately affected by the recent recession and continue to deal with bad-loan burdens and other financial problems.
As such, this deal could provide the combined company with the heft that it needs to compete with encroaching national players like PNC Bank and Bank of America Corp (NYSE:BAC). The market value of the combined company will not come anywhere close to the size of Bank of America Corp (NYSE:BAC) ($1.7 billion MV vs $130 billion MV), but they may be able to fight regional battles. The combined company will have percentage sales growth in the double digits, while Bank of America Corp (NYSE:BAC) lost 20% of its sales in the last year. If nothing arises to delay or stop the proposed merger, this transaction could take place by the end of the second quarter of 2013.
About FNB and PVF Capital
F.N.B. Corp (NYSE:FNB) operates a number of retail and business-focused bank branches in the “Rust Belt” region between Pittsburgh and Cleveland. The company deals primarily with retail borrowers as well as small local businesses. Its offers a full suite of loan products and other financial services, including mortgages, savings vehicles, wealth management plans, business loans, refinancing options, home equity loans and more. F.N.B. Corp (NYSE:FNB) also operates a full-service insurance division that sells health, life, accident and title insurance plans. Its branches do business under the “First National Bank of Pennsylvania” name. In 2012, the company earned $110.4 million on gross revenues of about $473 million.
PVF Capital Corporation owns and operates Park View Federal Savings Bank. Under this trade name, the company does business as a savings-and-loan institution in the southern and northeastern suburbs of Cleveland. In addition to customer-focused services like deposit accounts and wealth management plans, the company also makes mortgage and real estate loans to private borrowers and developers. Both Park View Federal Savings Bank branches and PVF’s commercial loan offices issue commercial and personal loans for a variety of uses. The company also manages a small land investment division that buys and sells property in its trade area. The company earned $5.5 million on revenues of $31.8 million in 2012.