Butler-based NexTier Bank on Thursday signed a $35-million merger agreement with Eureka Bank of Pittsburgh.

The two banks jointly announced the signing of a merger agreement that will result in a combined community bank with total assets in excess of $1.1 billion and 26 branches throughout southwestern Pennsylvania.

The company will operate under the NexTier Bank brand.

The combined bank plans to maintain its headquarters in Butler while retaining branch staff in each geographic market. Richard Krauland, NexTier’s president and chief executive officer, will serve as CEO. Under terms of the agreement, shareholders of Eureka Financial Corp. will receive about $35 million in cash, or $28.50 per share. The agreement was approved by the boards of both NexTier and Eureka.

The deal is subject to approval by the shareholders of Eureka Financial, as well as governmental regulatory approvals. The merger is expected to close in the first quarter of 2016.

NexTier has 24 branches and $983 million in assets. Eureka Bank has branches in Oakland in Pittsburgh and Shaler Township, Allegheny County.

Krauland said “We believe our merger with Eureka Bank will enhance our capabilities to provide a variety of financial services to communities in southwestern PA.”

The deal marks the second merger NexTier has reached in recent years. NexTier and the former Farmers & Merchants Bank of Western PA in Kittanning completed a merger in 2014. At that time NexTier had assets of $512 million while Farmers & Merchants had assets of $425 million.

The combined NexTier and Eureka bank will have total loans of $806 million, $991 million in deposits, and will service more than 40,000 deposit and loan accounts through 26 branches in Armstrong, Butler and Allegheny counties.

“The two banks are very complementary,” said Edward Seserko, president and CEO of Eureka Bank. “The ability to remain a community oriented bank serving the Pittsburgh market was important to us. We look forward to partnering with the NexTier team as we combine our organizations.”