First Defiance Financial Corp. to Acquire Pavilion Bancorp, Inc.
October 02 2007 - 6:53PM
PR Newswire (US)
* Acquisition will add $230 million in deposits and $243 million in
loans DEFIANCE, Ohio, Oct. 2 /PRNewswire-FirstCall/ -- First
Defiance Financial Corp. (NASDAQ:FDEF) and Pavilion Bancorp, Inc.
(OTC:PVLN) (BULLETIN BOARD: PVLN) today announced the execution of
a definitive agreement for First Defiance to acquire Pavilion
Bancorp, Inc. and its wholly owned subsidiary, the Bank of Lenawee,
which is headquartered in Adrian, Michigan. Each Pavilion Bancorp
shareholder will receive 1.4209 shares of First Defiance common
stock and $37.50 in cash. Based on the closing price of First
Defiance shares on October 2, 2007, the transaction is valued at
$55.7 million or $75.54 per share. With $290 million in assets, The
Bank of Lenawee has eight banking offices in Lenawee and Hillsdale
counties in southeastern Michigan: two in Adrian, two in Tecumseh
and one each in Hudson, Morenci, Waldron and Hillsdale. Combined,
the banking offices had $230 million in deposits and $243 million
in loans as of June 30, 2007. First Defiance Financial Corp. and
Pavilion Bancorp anticipate that the transaction will be completed
late in the first quarter of 2008, pending regulatory approvals,
the approval of shareholders of Pavilion and completion of other
customary closing conditions. Concurrent with the regulatory
approval process for the merger, First Defiance Financial Corp.
will apply to the Federal Reserve Board for approval to convert to
a bank holding company and its subsidiary, First Federal Bank of
the Midwest will seek approval to convert to a national bank
charter. First Defiance Chairman, President and CEO William J.
Small said the acquisition expands First Federal Bank's presence
into adjacent markets and supports its growth strategy. "We have a
strong presence in northwest Ohio; this acquisition allows us to
expand farther north into the southeastern Michigan market and it
adds the type of communities that have been very responsive to our
'Customer First' style of banking," Small said. "In addition, Bank
of Lenawee has a solid reputation and a base of commercial and
retail customers that is similar to our existing franchise. We will
continue with a local decision-making strategy that the market is
accustomed to and we look forward to working with the staff,
customers and shareholders for a successful transition." "We
believe that First Defiance, with its proven commitment to
community banking, is an ideal partner for Pavilion Bancorp,"
commented Doug Kapnick, Chairman of Pavilion Bancorp. "We believe
this transaction will produce significant benefits for our
shareholders, customers and communities." "We are pleased with the
opportunities this gives us to expand the product offerings to our
customers, while maintaining the tradition of local decision-
making and superior customer service," said Richard DeVries,
President and CEO of Bank of Lenawee. "Our strength in community
banking is based on the long-term relationships we build in our
markets and we have a proud history of being good corporate
citizens," added Mr. Small. "We will continue to provide a true
community bank choice for the customers in Adrian and surrounding
areas. Plus, a national bank charter is more consistent with First
Federal Bank's operating strategy as a full-service community
bank." First Defiance expects the merger to be accretive to
earnings in the first 12 months with no repurchase assumptions or
revenue synergies assumed. Management estimates that annual pre-tax
expense reductions will be approximately $3.5 million with
approximately 75% to be realized in 2008 and the balance
thereafter. The company expects one-time costs, including
acquisition-related and restructuring charges will not exceed $3.8
million on a pre-tax basis over the integration period. Upon
completion of the acquisition, on a pro forma basis using June 30,
2007 data, First Defiance Financial Corp. will have $1.8 billion in
total assets and $1.4 billion in total deposits. Pavilion Bancorp
was advised by Donnelly, Penman and Partners, and its legal counsel
was Varnum, Riddering, Schmidt and Howlett, LLP. First Defiance was
advised by Keefe, Bruyette & Woods and its legal counsel was
Vorys, Sater, Seymour and Pease, LLP. About First Defiance
Financial Corp. First Defiance Financial Corp., headquartered in
Defiance, OH, is the holding company for First Federal Bank of the
Midwest and First Insurance & Investments. First Federal
operates 27 full service branches in northwest Ohio and Allen
County, Indiana. With offices in Defiance and Bowling Green, Ohio,
First Insurance & Investments is the largest property and
casualty insurance company in the Defiance, OH area and specializes
in life and group health insurance. For more information, visit the
company's Web site at http://www.fdef.com/. About Pavilion Bancorp,
Inc. Pavilion Bancorp, Inc. is the parent corporation of the Bank
of Lenawee, based in Adrian, Michigan. Chartered in 1869, the Bank
of Lenawee is an independent, community bank that provides a broad
range of financial services through a network of eight branch
offices and nine ATMs located in Lenawee and Hillsdale counties in
Michigan. The bank also offers mortgage products provided by
Pavilion Mortgage Company, a subsidiary of the Bank of Lenawee. For
more information, visit the company's Web site at
http://www.pavilionbancorp.com/. This communication shall not
constitute an offer to sell or the solicitation of and offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification of the securities
under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended. First Defiance will be filing a Registration Statement on
Form S-4 concerning the Merger with the SEC, which will include the
joint prospectus/proxy statement that will be mailed to Pavilion's
shareholders. WE URGE INVESTORS TO READ THESE DOCUMENTS BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. Investors will be able to
obtain the documents free of charge, when filed, at the SEC's
website, http://www.sec.gov/. In addition, documents filed with the
SEC by First Defiance will be available free of charge from the
Secretary of First Defiance at 601 Clinton Street, Defiance, Ohio
43512, telephone (419) 782-5015. INVESTORS SHOULD READ THE PROXY
STATEMENT CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
Copies of all recent proxy statements and annual reports of First
Defiance are also available free of charge by contacting First
Defiance's secretary. First Defiance, Pavilion and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies to approve the Merger. Additional
information about the directors and executive officers of First
Defiance may be obtained through the SEC's Web site from the
definitive proxy statement filed by First Defiance with the SEC on
March 20, 2007. Additional information about the directors and
executive officers of Pavilion may be obtained through the SEC's
Web site from the definitive proxy statement filed by Pavilion with
the SEC on March 20, 2007. Additional information about
participants in the proxy solicitation and their interests in the
transaction will be contained in the joint prospectus/proxy
statement to be filed with the SEC. Safe Harbor Statement This
release may contain forward-looking statements about First Defiance
Financial Corp., Pavilion Bancorp, Inc., and/or the combined
company within the meaning of Sections 27A of the Securities Act of
1933, as amended, and Rule 175 promulgated thereunder, and 21E of
the Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder, that involve inherent risks and
uncertainties. This press release may contain certain forward-
looking statements with respect to the financial condition, results
of operations, plans, objectives, future performance and business
of First Defiance Financial Corp., Pavilion Bancorp, Inc., and/or
the combined company including statements preceded by, followed by
or that include the words or phrases such as "believes," "expects,"
"anticipates," "plans," "trend," "objective," "continue," "remain"
or similar expressions or future or conditional verbs such as
"will," "would," "should," "could," "might," "can," "may" or
similar expressions. There are a number of important factors that
could cause future results to differ materially from historical
performance and these forward-looking statements. Factors that
might cause such a difference include, but are not limited to: (1)
competitive pressures among depository institutions increase
significantly; (2) changes in the interest rate environment reduce
interest margins; (3) prepayment speeds, loan origination and sale
volumes, charge-offs and loan loss provisions; (4) general economic
conditions, either national or in the counties in which First
Defiance Financial Corp., Pavilion Bancorp, Inc., and/or the
combined company do business, are less favorable than expected; (5)
political developments, wars or other hostilities may disrupt or
increase volatility in securities markets or other economic
conditions; (6) changes and trends in the securities markets; (7)
legislative or regulatory changes or actions, or significant
litigation, adversely affect First Defiance Financial Corp.,
Pavilion Bancorp, Inc., and/or the combined company or the
businesses in which First Defiance Financial Corp., Pavilion
Bancorp, Inc., and/or the combined company are engaged; (8)
difficulties in combining the operations of Pavilion Bancorp, Inc.,
and/or other acquired entities and (9) the impact of reputational
risk created by the developments discussed above on such matters as
business generation and retention, funding and liquidity. We
undertake no obligation to release revisions to these
forward-looking statements or reflect events or circumstances after
the date of this release. Further information on other factors
which could affect the financial results of First Defiance
Financial Corp. after the merger are included in First Defiance
Financial Corp. and Pavilion Bancorp, Inc.'s filings with the
Securities and Exchange Commission. These documents are available
free of charge at the Commission's Web site at http://www.sec.gov/.
DATASOURCE: First Defiance Financial Corp. CONTACT: William J.
Small, Chairman, CEO & President, First Defiance Financial
Corp., +1-419-782-5015, , or Richard J. DeVries, President and CEO,
Bank of Lenawee, +1-517-265-5144, Web site: http://www.fdef.com/
http://www.pavilionbancorp.com/
Copyright