Fed approves FNB’s $117M deal to expand in NC

Dive Brief:

The Federal Reserve and Office of the Comptroller of the Currency (OCC) have approved FNB Corp.’s proposed $117 million acquisition of UB Bancorp, First National Bank said in a press release Wednesday.
The regulatory green light puts the transaction on track to close in December, the bank said.
The acquisition will boost Pittsburgh-based FNB’s North Carolina footprint to 100 locations and give it the eighth-largest deposit share in the state, the bank said.

Dive Insight:

The combination will create an entity with $43 billion in assets, $35 billion in deposits and $29 billion in loans.

The regulatory approval also marks a relatively rare instance, of late, in which a bank deal may close within the time frame executives initially expected.

Numerous bank mergers and acquisitions have seen delays over the past two years as the Fed has weathered understaffing at the governor level, and as the executive branch has demanded “more robust scrutiny” of transactions.

Most recently, the Fed approved the proposed merger between Allegiance Bank and Community Bank of Texas last month — roughly three weeks after the date by which either party could terminate the deal.

Longer waits may appear to be the price of larger mergers, though. U.S. Bank and MUFG Union Bank last month extended the termination date for their proposed $8 billion combination until Dec. 31 — more than 15 months after the deal was announced. The new timeline will push the expected conversion of accounts and systems from February 2023 to May, U.S. Bank CEO Andy Cecere said last month.

The banking space may yet see either approvals or extensions for the two largest pending deals, as well. BMO initially set an expectation of a fourth-quarter 2022 close for its $16.3 billion acquisition of Bank of the West.

TD, meanwhile, has money riding on the timing of its deal. The Canadian lender will pay an additional $0.65 per share if its proposed $13.4 billion acquisition of Memphis, Tennessee-based First Horizon is not completed before Nov. 27. The deal is set to be terminated Feb. 27 unless it is extended.

The Federal Reserve isn't the only regulator taking a more cautious approach to mergers. Perhaps in response to a lack of timely approval from the Federal Deposit Insurance Corp. (FDIC), New York Community Bank and Flagstar Bank extended their merger timeline through Oct. 31 and are aiming to switch to a national charter. That business model would not need FDIC approval.