another freakin merger
<b>Camp Hill bank makes deal to merge</b>
Tuesday, June 15, 2004
BY TOM DOCHAT
Of The Patriot-News
Pennsylvania State Bank of Camp Hill would become part of Lancaster-based Sterling Financial Corp. under a $44 million merger announced yesterday.
Sterling plans to buy The Pennsylvania State Banking Co. in a stock and cash transaction that is expected to close late this year or early in 2005.
The deal would increase Sterling's geographic reach into the Harrisburg region and enable Pennsylvania State Bank to provide more services in estate and financial planning and wealth management.
Pennsylvania State Bank, which has four branches in Cumberland County and two in Dauphin County, would keep its name and charter as an affiliate of Sterling.
Sterling, with more than $2.3 billion in assets, operates a number of affiliate banks, including Bank of Lancaster County, Bank of Lebanon County and Bank of Hanover and Trust Co. It also offers leasing, insurance and wealth-management services.
"We are extremely pleased Pennsylvania State Bank is joining the Sterling Financial family," said J. Roger Moyer Jr., Sterling president and CEO. "We have felt for some time that the demographics in Cumberland and Dauphin counties are an ideal match for our community banking model, and to enter those areas with a quality, local bank that people know and trust is ideal."
Pennsylvania State Bank was founded in 1989 in Camp Hill and has grown to more than $200 million in assets at six branches and a commercial loan office in Cleona.
Thomas J. Sposito II, Pennsylvania State Bank's president and CEO, said he sees the Sterling acquisition "as an acceleration of our strategic plan" for the region. "Our goal is to be the community bank of choice in the Harrisburg area."
He said the Sterling deal would enable Pennsylvania State Bank to begin offering trust, insurance and wealth-management services, and allow it to handle larger commercial loans.
The acquisition should enable Pennsylvania State Bank to expand in the Harrisburg market, he added.
Sposito and the bank's current board of directors will remain in place after the acquisition is complete. One member of Pennsylvania State Bank's holding company will be added as a director of Sterling. The Pennsylvania State Bank holding company was formed at the end of last year.
The company employs 62 people. Sposito said a small number of jobs probably will be eliminated through the acquisition, but other jobs may be added. He said no branches will be closed, and no "customer contact" employees will be affected by the acquisition.
Under terms of the deal, Sterling will pay Pennsylvania State Bank shareholders $22 in cash for each of their shares, or the shareholders can exchange their stock for 0.83 of a share of Sterling stock. At least 70 percent of the Pennsylvania State Bank stock must be exchanged for Sterling shares, but the stock exchange will be capped at 75 percent of the Pennsylvania State shares.
The $22 cash price values the purchase at a 66 percent premium to Pennsylvania State's closing price of $13.25 a share last Thursday. Pennsylvania State stock, which is traded over the counter, closed yesterday at $20.52, up $7.27, or 55 percent.
Sterling shares, traded on the Nasdaq Stock Market, closed at $23.40, down $2.08, or 8.2 percent.
TOM DOCHAT: 255-8216 or
tdochat@patriot-news.com