Penns Woods Bancorp, Inc. (Penns Woods) (Nasdaq:PWOD) and Luzerne
National Bank Corporation (Luzerne) (PINK:LUZR) jointly announced
today that they have entered into a definitive merger agreement
under which Penns Woods will acquire Luzerne in a stock and cash
transaction. The merger, approved unanimously by the boards
of directors of both companies, further broadens Penns Woods'
footprint into contiguous markets located in the Pennsylvania
counties of Luzerne and Lackawanna. The combined company will
have more than $1.1 billion in assets.
"We are very excited to be able to become partners with
Luzerne. The organizations fit together nicely, sharing a
unified commitment to deliver the best banking experience," said
Richard A. Grafmyre, President and CEO of Penns Woods and Jersey
Shore State Bank. "This acquisition creates tremendous
opportunities to build on the successes that each organization has
achieved individually in its own markets."
"As Chairman of the Board of Penns Woods, I look forward to the
opportunities presented by the partnership of the two
organizations," said Ronald A. Walko, Chairman of the Board of
Penns Woods. "I expect that together these two great banks will
maximize Penns Woods shareholder value through expanded financial
services."
"The affiliation of Luzerne with Penns Woods will present
significant opportunities for our customers, employees and
shareholders," said Luzerne President and CEO Robert C. Snyder.
"Each organization is known for its commitments to customer service
and community. Partnering with Penns Woods will bring
increased financial service capabilities to our customers while
allowing Luzerne to maintain its local identity as an independent
community bank. We have known the team at Penns Woods for many
years, admire their success, and look forward to adding to that
success."
"We have always been proud of being one of the leading community
banks in northeastern Pennsylvania and our partnership with Penns
Woods will allow us to continue that tradition," stated Joseph E.
Kluger, Chairman of the Board of Luzerne. "In addition, the
terms of the transaction provide a significant, on-going role for
Luzerne in the combined company along with receipt of consideration
for shareholders that is very attractive financially. We are
excited by the opportunity to become part of this growing
company."
Under the terms of the merger agreement, Penns Woods will
acquire all of the outstanding shares of Luzerne for a total
purchase price of approximately $44.5 million as of the date of the
agreement. Luzerne shareholders will have the opportunity to
elect to receive for each outstanding share of Luzerne common stock
either 1.5534 shares of Penns Woods common stock, $61.86 in cash or
a combination of cash or stock. All shareholder elections will
be subject to allocation and proration procedures set forth in the
merger agreement that are designed to ensure that no more than 10%
of the outstanding Luzerne shares are exchanged for cash. The
transaction is expected to be a tax-free exchange to the extent
that shareholders of Luzerne receive stock in exchange for their
shares.
The transaction is expected to close in the second quarter of
2013 subject to customary closing conditions, including receipt of
regulatory approvals and approvals by both Penns Woods and Luzerne
shareholders. Following the completion of the merger, Penns
Woods intends to continue to operate Luzerne Bank as a separate
banking subsidiary of Penns Woods under the name "Luzerne
Bank." The existing members of the board of directors of
Luzerne Bank will continue to serve as directors after closing, and
Richard A. Grafmyre, Penns Woods' President and Chief Executive
Officer, will join the Luzerne Bank board. In addition, at
closing the Penns Woods board of directors will be expanded to
include three current non-employee directors from the Luzerne board
of directors.
Monocacy Financial Advisors, LLC served as financial
advisor to Penns Woods, and Janney Montgomery Scott LLC served
as financial advisor to Luzerne in the transaction.
Stevens & Lee, P.C. served as legal counsel to
Penns Woods, and Ballard Spahr LLP served as legal counsel to
Luzerne in the transaction.
About the Companies
Penns Woods Bancorp, Inc. is the parent company of Jersey Shore
State Bank, which operates thirteen branch offices providing
financial services in Lycoming, Clinton, Centre, and Montour
Counties. Investment and insurance products are offered
through the bank's subsidiary, The M Group, Inc. D/B/A The
Comprehensive Financial Group.
Luzerne National Bank Corporation is the parent company of
Luzerne Bank, which operates eight branch offices providing
financial services in Luzerne and Lackawanna counties.
Additional Information For Shareholders
Penns Woods will file with the Securities and Exchange
Commission (SEC) a registration statement on Form S-4 containing a
joint proxy statement/prospectus and other documents regarding the
proposed transaction. The proxy materials will set forth
complete details of the merger transaction. Penns Woods and
Luzerne shareholders and investors are urged to read the joint
proxy statement/prospectus when it becomes available, because it
will contain important information about Penns Woods and Luzerne
and the proposed transaction. When available, copies of this
joint proxy statement/prospectus will be mailed to
shareholders. Copies of the joint proxy statement/prospectus
also may be obtained free of charge at the SEC's web site at
http://www.sec.gov, or by directing a request to Penns Woods
Bancorp, Inc., Attention – Richard A. Grafmyre,
President & CEO, 300 Market Street, Williamsport,
Pennsylvania 17701 or on its website at www.jssb.com, or to Luzerne
National Bank Corporation, Attention – Robert C. Snyder,
President & CEO, 118 Main Street, Luzerne,
Pennsylvania 18709. Copies of other documents filed by
Penns Woods with the SEC may also be obtained free of charge at the
SEC's website or by directing a request to Penns Woods at the
address provided above.
Penns Woods and Luzerne and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of Penns Woods
and Luzerne in connection with the proposed merger.
Information about the directors and executive officers of
Penns Woods is set forth in the proxy statement, dated
March 21, 2012, for Penns Woods' 2012 annual meeting of
shareholders, as filed with the SEC on Schedule 14A.
Additional information regarding the interests of such
participants and other persons who may be deemed participants in
the transaction may be obtained by reading the joint proxy
statement/prospectus included in the Form S-4 when it becomes
available.
Forward-Looking Statements
This news release contains forward-looking statements.
These forward-looking statements involve risks and
uncertainties and are based on the beliefs and assumptions of the
managements of Penns Woods and Luzerne and their subsidiaries and
on the information available to their managements at the time that
these statements were made. There are a number of factors,
many of which are beyond the control of Penns Woods and Luzerne,
that could cause actual conditions, events or results to differ
significantly from those described in the forward-looking
statements. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking
statements include, among others, the following: (1) the
parties may fail to satisfy the conditions to closing for the
proposed merger in a timely manner or at all; (2) the Luzerne
or Penns Woods shareholders may fail to approve the proposed
merger; (3) the parties may fail to obtain the necessary
governmental approvals or adverse regulatory conditions may be
imposed in connection with such approvals; (4) the
announcement and pendency of the transaction may result in
disruption to the parties' businesses; (5) Penns Woods may
encounter difficulties related to the integration of the businesses
following the merger; (6) the effect of changes in laws and
regulations, including federal and state banking laws and
regulations, and the associated costs of compliance with such laws
and regulations either currently or in the future as applicable;
(7) the effect of changes in accounting policies and practices, as
may be adopted by the regulatory agencies as well as by the
Financial Accounting Standards Board, or of changes in Penns Woods'
or Luzerne's organization, compensation and benefit plans; (8) the
effect on Penns Woods' or Luzerne's competitive position within
their respective market area and increased competition from larger
regional and out-of-state banking organizations as well as non-bank
providers of various financial services; (9) the effect of changes
in interest rates; and (10) the effect of changes in the business
cycle and downturns in the local, regional or national
economies. For a list of other factors which could cause
actual results to differ from those currently anticipated, see
Penns Woods' filings with the SEC, including
"Item 1A. Risk Factors," set forth in the Penns Woods'
Annual Report on Form 10-K for the fiscal year ended
December 31, 2011.
Forward-looking statements speak only as of the date they are
made. Neither Penns Woods nor Luzerne undertakes and both
specifically disclaim any obligation to update any forward-looking
statement, whether written or oral, that may be made from time to
time by or on behalf of Penns Woods or Luzerne.
CONTACT: Penns Woods Bancorp, Inc.
Richard A. Grafmyre
President & CEO
(570) 322-1111
Luzerne National Bank Corporation
Robert C. Snyder
President & CEO
(570) 288-4511
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