F.N.B. Corp. grows in Pittsburgh

The offer includes a
42-percent premium for the Pittsburgh company’s stock.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

HERMITAGE, Pa. — F.N.B. Corp. is expanding its presence in Pittsburgh with the purchase of its second banking company based in that city.

F.N.B. said Friday that it has signed a deal to acquire Iron & Glass Bancorp, the holding company for Iron & Glass Bank. The bank has eight branches on the south side of Pittsburgh.

The deal, which is valued at $86.1 million, calls for Iron & Glass shareholders to receive either $75 in cash or five shares of F.N.B. stock for each of their shares. The deal sets limits on how much cash or stock can be claimed.

The offer price represents a 42-percent premium over Iron & Glass stock’s closing price of $53 a share Thursday. The company’s stock has traded at between $47 and $55.50 in the past year.

F.N.B. stock closed down 2 cents Friday at $14.90.

F.N.B. is the holding company for First National Bank of Pennsylvania. In 2005, it acquired NSD Bancorp., which was the holding company for NorthSide Bank. In that deal, First National gained 11 branches in Allegheny County.

Stephen J. Gurgovits, F.N.B. chairman and chief executive, said the latest acquisition is low risk because of the size of Iron & Glass and F.N.B.’s knowledge of the Pittsburgh market.

“This transaction fits perfectly with our strategic focus to increase our market share and expand our presence in Pittsburgh and throughout Allegheny County,” Gurgovits said.

In recent years, F.N.B. also has acquired bank holding companies in Erie, Slippery Rock and Harrisburg.

The Iron & Glass deal is expected to add to earnings in the first full year of operation. The transaction is expected to be complete in the third quarter.

It has been approved by boards of directors of both companies but still needs approval from regulators and Iron & Glass shareholders.

Daniel Goetz, chairman of Iron & Glass, noted that the company was founded in 1871 but he thinks the acquisition is good for shareholders because of F.N.B.’s dividends and good for customers because of F.N.B.’s banking products and customer service.

F.N.B. has increased dividend payments for 35 consecutive years.

Iron & Glass has about $300 million in assets, compared with more than $6 billion for F.N.B. The Hermitage company operates trust, investment, insurance and finance subsidiaries in addition to First National Bank, which has 154 branches in Pennsylvania and Ohio.

shilling@vindy.com