CORESTATES, INDEPENDENCE BANCORP ENTER INTO ACQUISITION AGREEMENT
PHILADELPHIA, Nov. 19 /PRNewswire/ -- CoreStates Financial Corp (NASDAQ-NMS: CSFN) and Independence Bancorp, Inc. (NASDAQ-NMS: INBC), of Perkasie, Pa., announced today that they have entered into an agreement for CoreStates to acquire Independence in an exchange of stock. Independence Bancorp is a $2.6 billion-assets bank holding company whose four banking subsidiaries serve seven eastern Pennsylvania counties through 54 community banking offices. CoreStates is the Philadelphia-based, $22.8 billion-assets bank holding company whose lead bank, CoreStates Bank, N.A., is the market leader for most segments of commercial banking in the five-county Philadelphia metropolitan area. Under terms of the agreement, approved by directors of both companies, each of Independence's 12.7 million (fully diluted) shares will be exchanged for 1.5 shares of CoreStates, assuming that the average price of CoreStates' stock over a pricing period prior to closing is $27 per share or less. If the average price is $28 or more, the exchange ratio will be 1.45 shares of CoreStates for each Independence share. If the average falls between $27 and $28, the exchange ratio will be determined by dividing $40.50 by the average price. Based on CoreStates' $27 closing price on Thursday, November 18, the transaction is worth $40.50 per Independence Bancorp share, for a total value of approximately $514 million. Giving effect to the increase in capital that will result from conversion, this price is equivalent to 1.96 times book value. CoreStates also has received an option to purchase up to 9.9 percent of Independence's stock if certain contingencies occur. Assuming approval by regulators and by Independence Bancorp's shareholders, the transaction is expected to close in the second quarter of 1994. CoreStates anticipates that the transaction will be accounted for as a pooling of interests. Independence's banking subsidiaries are Bucks County Bank & Trust Company, Perkasie; Cheltenham Bank, Jenkintown; Lehigh Valley Bank, Bethlehem, and Third National Bank & Trust Company, Scranton. The heart of the Independence franchise is Bucks County, where Independence ranks first in deposits and CoreStates is second. CoreStates Chairman Terrence A. Larsen said that Independence "brings us a very attractive franchise. These banks cultivate the same kinds of close customer and community relationships that we value at CoreStates. We expect customers to see significant added benefits as a result of this combination, and stronger customer relationships in turn will enhance shareholder value." He said the combination would increase CoreStates' market share of deposits in Bucks County from about 11 percent to about 26 percent. In the Allentown-Bethlehem area, where CoreStates currently has no branches, the acquired branches will support CoreStates' already significant commercial business, especially its corporate middle market relationships. John D. Harding, president and chief executive of Independence Bancorp, said, "CoreStates has shown a deep commitment to making the kinds of investments in technology, people and innovative products
that will be needed to meet customer demands through the 1990s. We believe this will result very quickly in tangible benefits for the customers of our banks."
Larsen said CoreStates has been acquainted with the leaders of Independence Bancorp for years, and that Independence has shown that it shares many of the cultural values that drive CoreStates. He said that the acquired banks would be merged legally into CoreStates' lead banking subsidiary, CoreStates Bank, N.A., but would be operated as a separate division of the bank under their existing market identities. Harding will be chief executive officer of the new division, Larsen said. He said that, as in any in-market merger, CoreStates would expect to be able to reduce operating costs significantly. CoreStates also would expect to find great interest among Independence's customers for new products and services that would become available to them as a result of the combination. Larsen said there are "closing costs and consolidation costs in the first year, and until we get past those costs and the actual consolidation we don't get the full benefit of the merger on earnings. After that it will add to per share earnings," he said. To the extent the consolidation process might affect job levels in the future, Larsen said all Independence employees are considered part of the
CoreStates family immediately, and receive all the consideration implied in CoreStates' strongly held CoreValues.
"We aren't in a position to say how many positions might be affected by changes over time, but I can say categorically that we want to keep every affected employee that we possibly can within CoreStates," he said. "This is not only the right thing to do, it is good business in the long run. It is required by the CoreValues to which we subscribe." Larsen also stressed that CoreStates would manage consolidation to insulate customers from negative effects. "We have learned to maintain our people contacts and we are experienced at making seamless transitions in our back office operations. Customers are our priority, and we will make certain they know that by our actions." CoreStates has two other acquisitions pending, both in New Jersey. Its acquisition of the four-branch, $125 million-assets Inter Community Bancorp of Springfield was announced in June and is expected to close by year-end. Its acquisition of the 49-branch, $2.3 billion-assets Constellation Bancorp of New Brunswick was announced in August and assuming the necessary approvals is expected to close in the first quarter of 1994. /delval/ -0- 11/19/93 /CONTACT: Gary Brooten of CoreStates, 215-973-3546, or Philip H. Rinnander of Independence, 215-453-3030/ (CSFN INBC)
CO: CoreStates Financial Corp; Independence Bancorp, Inc. ST: Pennsylvania IN: FIN SU: TNM
LJ -- PH035 -- 6643 11/19/93 15:47 EST
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|Date:||Nov 19, 1993|
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