Filed by Susquehanna Bancshares, Inc.
Pursuant to Rule 425 under the Securities Act of 1933, as amended
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934,
as amended
Subject Company: Abington Bancorp, Inc.
Commission File No.: 000-52705
The following is an internal announcement and Q&A that was
posted on the intranet of Susquehanna Bancshares, Inc. on January 26, 2011.
Susquehanna Announces Agreement to Acquire Abington
Bancorp, Inc.
Susquehanna and Abington Bancorp, Inc. have entered into a definitive agreement under which Susquehanna will acquire
Abington, a 20-branch bank in suburban Philadelphia, in a stock-for-stock transaction. Check out this article for a full copy of the acquisition news release and initial Q&As.
Susquehanna Bancshares, Inc. to Acquire Abington Bancorp, Inc.
Combined Bank to Serve Strong Demographic Region in Greater Philadelphia Area,
Offering Customers Increased Resources & Financial Management Services
FOR IMMEDIATE RELEASE: LITITZ, PA,
and JENKINTOWN, PA, January 26, 2011
: Susquehanna Bancshares, Inc. (Susquehanna) (NASDAQ: SUSQ) and
Abington Bancorp, Inc. (Abington) (NASDAQ: ABBC) announced the signing of a definitive agreement under which Susquehanna will acquire all outstanding shares of common stock of Abington in a stock-for-stock transaction.
The transaction, with an approximate total value of $273 million, is expected to be completed in the third quarter of 2011. Under terms of the agreement,
Abington shareholders will receive 1.32 shares of Susquehanna common stock for each share of Abington common stock. Based on closing prices of Susquehannas and Abingtons common stock on January 25, 2011, this represents a price of $13.04
per Abington share, a premium of 13.8% over Abingtons closing price. Based on the average closing price of Susquehannas common stock for the five-day period ended January 25, 2011, this would represent a price of $13.16 per Abington
share, a premium of 14.8% over Abingtons closing price on January 25, 2011.
The combined company will have approximately $15 billion in
assets, including $10 billion in loans, and $10 billion in deposits. Abington Banks 20 branches in the suburban counties surrounding Philadelphia will join Susquehanna Banks network of 221 branches in Pennsylvania, New Jersey, Maryland
and West Virginia. Susquehanna does not anticipate closing any of Abingtons branches.
We are pleased and excited to welcome
Abington to the Susquehanna family. We expect that the combination of these two companies will yield expanded services for customers and enhanced opportunities for growth and earnings for shareholders, said William J. Reuter, Chairman and
Chief Executive Officer of Susquehanna. Like Susquehanna, Abington has built a reputation for exceptional customer service, and the locations of Abingtons bank branches provide a natural extension of Susquehannas network in the
greater Philadelphia area. We believe that together we can provide customers of those offices with a broader array of banking services, including expanded commercial lending capabilities. In addition, we anticipate that the investment management
expertise provided by Susquehannas wealth management subsidiaries in Montgomery County will be a valuable local resource for Abington customers.
Robert W. White, Chairman, President and Chief Executive Officer of Abington, said, We are pleased to join forces with Susquehanna and their strong management team. We believe that by adding our
franchise with its strong demographics to Susquehanna, we will benefit our shareholders, customers, employees and the communities we serve. We are excited about the potential represented by our combined operations and look forward to joining the
Susquehanna family.
Reuter said, We believe that we have identified opportunities to improve the margin at Abington through
increased commercial lending and an enhanced deposit mix, and we also expect to grow non-interest income. As a result of this transaction, Susquehanna will have additional capital to proactively pursue opportunities for growth through increased
lending in the greater Philadelphia area and throughout our market territory, and for capital management initiatives. Susquehanna and Abington are both rooted in the ideals of community banking, and we look forward to building on this legacy as we
move forward together.
Upon completion of the transaction, White will be appointed to the Susquehanna board and will join the
leadership team of Susquehanna Banks Delaware Valley Division, which encompasses eastern Pennsylvania and southern New Jersey.
Susquehanna expects the internal rate of return of this transaction to exceed 19%, based on annual cost savings of approximately $8 million, residual
credit losses of $31 million, and one-time merger-related expenses of approximately $21 million. While the transaction is projected to be neutral to 2012 earnings per share, it is expected to add approximately $95 million or 100 basis points to
Susquehannas Tier I common capital position. Ultimate earnings accretion will be driven by how Susquehanna deploys the excess capital. The boards of directors of both Susquehanna and Abington have approved the transaction. Completion of the
transaction is subject to customary closing conditions, including regulatory approvals and the approval of shareholders of both companies.
Certain company information regarding Abington and Susquehanna is set forth below.
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Company Data (as of 12/31/2010):
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Abington
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Susquehanna
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Assets
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$1.2 billion
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$14 billion
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Deposits
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$0.9 billion
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$9.2 billion
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Loans
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$0.7 billion
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$9.6 billion
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Total Equity
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$0.2 billion
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$2.0 billion
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Offices
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20
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221
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Susquehanna was advised in this transaction by J.P.
Morgan Securities LLC. as financial advisor and Morgan, Lewis & Bockius LLP as legal counsel. Abington was advised by Keefe, Bruyette & Woods as financial advisor and Elias, Matz, Tiernan & Herrick LLP as legal counsel.
Conference Call: Thursday, January 27, 11 a.m. EST
Susquehannas executive leadership will conduct a webcast to discuss the acquisition, as well as the companys fourth quarter and full year 2010 financial results, on Thursday, January 27, 2011,
at 11 a.m. Eastern Standard Time. The conference call may include forward-looking information and financial goals. Investors and interested parties will have the opportunity to listen to the conference call through a live broadcast on
Susquehannas Web site. The event may be accessed by selecting Investor Relations near the top right of the home page, then Overview, and clicking on the webcast link. To listen to the live call, please go to the Web
site at least 15 minutes prior to the scheduled start time to download and install any necessary audio software. For those who are unable to listen to the live broadcast, an archived replay and podcast will be available on the Web site shortly after
the call concludes.
About Susquehanna Bancshares, Inc.
Susquehanna is a financial services holding company with assets of approximately $14 billion. Headquartered in Lititz, Pa., the company provides banking and financial services at 221 branch locations in
the mid-Atlantic region. Through Susquehanna Wealth Management, the company offers investment, fiduciary, brokerage, insurance, retirement planning, and private banking services, with approximately $6 billion in assets under management and
administration. Susquehanna also operates an insurance brokerage and employee benefits company, a commercial finance company and a vehicle leasing company. Investor information may be requested on Susquehannas Web site at
www.susquehanna.net
.
About Abington Bancorp, Inc.
Abington Bancorp Inc. is the holding company for Abington Bank, with assets of approximately $1.2 billion. Abington Bank is a Pennsylvania-chartered, FDIC-insured savings bank which was
originally organized in 1867. Abington Bank conducts business from its headquarters and main office in Jenkintown, Pennsylvania, as well as twelve additional full-service branch offices and seven
limited-service banking offices located in Montgomery, Bucks and Delaware counties, Pennsylvania.
This press release contains
forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are based on Susquehannas and Abingtons current expectations, estimates and projections about future events. This includes
statements regarding the timing of the transaction, the timing and success of business plans and integration efforts once the transaction is complete, Susquehannas ability to expand its services and realize growth and efficiencies through the
acquisition of Abington, Susquehannas expectations regarding the internal rate of return on the acquisition, merger-related expenses and the impact of the transaction on Susquehannas earnings and capital position. These statements are
not historical facts or guarantees of future performance, events or results. Such statements involve potential risks and uncertainties, such as whether the merger will be approved by the shareholders of Susquehanna and Abington or by regulatory
authorities, whether each of the other conditions to closing set forth in the merger agreement will be met, Susquehannas ability to integrate Abington as planned and the general effects of financial, economic, regulatory and political
conditions affecting the banking and financial services industries. Accordingly, actual results may differ materially. Neither Susquehanna nor Abington undertake any obligation to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise. For additional factors that may affect future results, please see filings made by Susquehanna and Abington with the Securities and Exchange Commission (SEC), including
Susquehannas Annual Report on Form 10-K for the year ended December 31, 2009, and Abingtons Annual Report on Form 10-K for the year ended December 31, 2009.
# # #
Susquehanna Bancshares, Inc./Abington Bancorp, Inc.
Acquisition Q&As
Note: Due to regulations governing the release of information by publicly traded companies, we cant address all questions at this time. We will
communicate additional information as we are able and as it becomes available.
Q: Who is Abington Bancorp, Inc. and why are we
acquiring them?
A: Abington Bancorp, Inc. is traded under the NASDAQ National Market System under the symbol
ABBC
and is the holding company for Abington Bank, a state chartered, FDIC-insured savings bank with assets more than $1 billion. The Bank was founded in 1867 and is headquartered in Jenkintown, Pennsylvania. Its banking
office network has thirteen full-service and seven limited-service branches located throughout Montgomery, Bucks and Delaware counties. By acquiring Abington Bancorp, Susquehanna will be able to increase its presence in the Montgomery and Delaware
counties enter Bucks County. The counties feature attractive demographics and diverse commercial industries.
Abington
At-A-Glance
Headquarters: Jenkintown, PA
Assets: $1.2 billion
Deposits: $925 million
Loans: $750 million
Abington Bank Market Map
Offices located in Delaware, Montgomery, and
Bucks counties
Q: When will the acquisition take place?
A: Pending approvals, it is scheduled to take place in third quarter of 2011.
Q: Will there
be any branch closures (from either organization) from this merger?
A: The thirteen full-service branches and seven limited-service
branches do not overlap with our current branch footprint; therefore, we do not anticipate branch closures related to this merger.
Q: Will
Abington Bank branches become Susquehanna Bank branches in the DV region?
A: Yes. Abington Bank will be merged into Susquehannas
existing bank network and marketed under the Susquehanna brand. Abington Bank branches will become Susquehanna Bank branches in the DV region.
Q: How will this impact reporting structure in the DV region?
A: Post-merger reporting structures will be announced at a later time.
Q: How will this merger affect our customers?
A: Our customers will have access to an
expanded network of branches and ATMs.
Q: How should we handle customer questions about the merger?
A: Please share the benefits of the merger, which include expanded access to branches and ATMs in Montgomery and Bucks counties. The merger is not
scheduled to take place until the third quarter of 2011, and it should not result in any changes to products or services for existing Susquehanna Bank customers. We are committed making the transition as simple as possible for Abington Bank
customers who will be joining our company, and we will provide advance communications to them regarding products and services.
Q: Where
can I find up-to-date information about the merger?
A: We understand that you may have additional questions about this merger. We will
communicate additional information as it becomes available. Updates about the merger will be posted in a temporary site in the Links for You section on the homepage of WebOne and will be titled Abington Bank Merger. All
communication regarding the merger will be posted and archived in this area. This site will be available next week. Also, continue to check the WebOne news section for the latest merger news and information.
Q: If I have a question about the merger, who can I ask?
A: You should talk to you supervisor. You can also submit a question in the Abington Bank Merger site on WebOne, which will be available next week. Questions received will be reviewed and answers will be
posted when information is available.
If you receive any questions from the media, please refer them to:
Steve Trapnell, Corporate Communications Manager, 717-625-6548
Alison van Harskamp, Director of Corporate Communications, 717-625-6260
Additional Information and Where to Find It
In connection with the proposed merger, Susquehanna Bancshares, Inc. (Susquehanna) will file a registration statement on Form S-4 with the Securities and Exchange Commission (the
SEC). The registration statement will include a joint proxy statement for Susquehanna and Abington Bancorp, Inc. (Abington), which will also constitute a prospectus of Susquehanna.
The proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by Susquehanna or Abington with
the SEC, may be obtained free of charge at the SECs Web site at http://www.sec.gov/. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Abington by contacting Frank Kovalcheck, Abington
Bancorp, Inc., 180 Old York Road, Jenkintown, PA 19046, telephone: 215-886-8280, or from Abingtons Web site at http://www.abingtonbankonline.com. Investors and security holders may obtain free copies of the documents filed with the SEC by
Susquehanna by contacting Abram G. Koser, Susquehanna Bancshares, Inc., 26 North Cedar Street, Lititz, PA 17543, telephone: 717-626-4721.
Investors and security holders are urged to read the proxy statement/prospectus and the other relevant
materials when they become available before making any voting or investment decision with respect to the merger.
Participants in Solicitation
Susquehanna, Abington and their respective directors, executive officers and certain other members of management and employees may be deemed participants in the solicitation of proxies from
shareholders of Susquehanna and Abington in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the shareholders of Susquehanna and Abington in connection with
the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about the executive officers and directors of Susquehanna in its Annual Report on Form 10-K for the year ended
December 31, 2009 and in its definitive proxy statement filed with the SEC on March 26, 2010. You can find information about Abingtons executive officers and directors in its Annual Report on Form 10-K for the year ended
December 31, 2009 and in its definitive proxy statement filed with the SEC on April 16, 2010.
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