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A surprise agreement under which CoreStates Financial Corp. will buy First Pennsylvania Corp. still has to be approved by regulators and shareholders before it can be finalized.
The deal was a surprise because First Pennsylvania had agreed to be acquired next spring by Marine Midland Banks Inc., but had been considering an offer by Meridian Bancorp since midAugust.
Instead, a CoreStates-First Pennsylvania pact was signed. It calls for CoreStates to acquire First Pennsylvania for stock valued at $18.75 per share. The total value of the transaction was estimated at about $730 million.
The transaction was approved by the First Pennsylvania board last week after a discussion with Meridian. First Pennsylvania and Marine Midland also agreed to terminate their merger deal.
If the deal closes as anticipated early in 1990 it would create an entity with $23 billion in assets and leading market positions in a number of banking areas.
CoreStates had total assets of $16.4 billion as of last June 30. It is the parent of Philadelphia National Bank, Hamilton Bank, New Jersey National Bank and the CoreStates Bank of Delaware NA.
First Pennsylvania, with total assets of $6.6 billion on June 30, is the parent of First Pennsylvania Bank, First Pennsylvania Bank (N.J.) National Association, and First Pennsylvania Bank (Del.)
At midyear, CoreStates had a total of 8,800 employees and 197 offices. Its PNB unit had 63 branches. There were 5,400 employees in PNB and CoreStates' corporate offices. At the same time, First Pennsylvania had 94 offices including 79 branches and a total of 3,690 employees.
Under the agreement, First Pennsylvania Bank would become an operating subsidiary of CoreStates, retaining its name as have Philadelphia National Bank, Hamilton Bank and New Jersey National Bank.
Within the metropolitan Philadelphia area in which First Pennsylvania currently competes with PNB, the two banks would be realigned to serve distinct market segments. First Pennsylvania will serve primarily retail and small business markets. PNB will concentrate on wholesale and commercial business.
Terrence A. Larsen, CoreStates chairman, will continue as chairman and CEO, George A. Butler, chairman of First Pennsylvania, will become president of CoreStates.
Robert B. Palmer, vice chairman of CoreStates and president and CEO of PNB, will become president and CEO of First Pennsylvania Bank. Frank E....