First Chester to Buy American Home Bank

First Chester County Corp., West Chester, Pa., the parent of First National Bank of Chester County, has agreed to acquire American Home Bank NA, Mountville, Pa., in a cash and stock transaction valued at approximately $18.2 million. The valuation was based on First Chester's closing price of $15.25 per share on Sept. 18. American Home originated approximately $1 billion in residential mortgage loans in the 12 months ended Aug. 31, 2008. The consumer and commercial banking services of American Home Bank and its branch offices will be merged into the banking operations of First National. Its mortgage banking operations will be run as a separate division of First National under the American Home Bank name. "The acquisition of American Home Bank is consistent with our strategy to expand our geographic footprint and enhance our fee-based income," said John A. Featherman III, chairman and chief executive of First National. "The merger strengthens the combined mortgage banking platform of both banks and positions First National to take advantage of the recent exit from the mortgage market of many nonbank mortgage originators, and to benefit from both the recovery and future growth of the residential housing market."