On Monday, Tower Bancorp announced that it is planning on purchasing First Chester County Corp., in a major deal of $65 Million in stock. Both the financial institutions are based in Pennsylvania.

Shareholders of First Chester have been offered $10.55 a share by Tower Bancrop, and the offered price is an 86% premium when compared to the bank's last recorded closing price on Thursday. In addition, the shareholders will be provided 0.453 share of Tower common stock for each First Chester share they hold.

Put together, the banks will have under their wing $3 Billion on assets and 50 branches spread across Pennsylvania and Maryland. As of now, no branch closures are expected, although cost cuts of about $12 Million or 15% are expected, thanks to the streamlining and restructuring of corporate operations.

With the deal, which is expected to close on 2010's second quarter, Tower will be able to expand to into Pennsylvania's Chester and Delaware counties.

While shares of Tower decline by 1%, those of First Chester hiked by 73% to $9.13.