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PNC TO ACQUIRE FLAGSHIP FINANCIAL FOR $13.05 CASH PER SHARE

 PNC TO ACQUIRE FLAGSHIP FINANCIAL FOR $13.05 CASH PER SHARE
 JENKINTOWN, Pa., Jan. 21 /PRNewswire/ -- Thomas H. O'Brien, chairman and chief executive officer of PNC Financial Corp (NYSE: PNC), and Raymond W. McConnell, chairman and acting chief executive officer of Flagship Financial Corporation (NASDAQ-NMS: FLGF), a thrift holding company headquartered in Jenkintown, today announced a definitive agreement for PNC to acquire Flagship.
 Subject to regulatory approval, Flagship's two thrifts, First American Savings, F.A., and Brandywine Savings Bank PaSA, would be merged into PNC's Provident National Bank in Philadelphia. Between them, First American and Brandywine Savings operate 21 community offices in Philadelphia and the suburban counties of Chester, Montgomery and Bucks.
 Under terms of the agreement, PNC will pay Flagship shareholders $13.05 cash per common share. Flagship has 3,474,985 common shares outstanding. Flagship has also granted PNC an option to acquire up to 19.99 percent of Flagship's common stock.
 The transaction is subject to completion of due diligence review by PNC and approval by PNC's board of directors, Flagship stockholders and various regulatory authorities. PNC said the anticipated closing date would be in the second half of 1992.
 O'Brien said, "This is a meaningful step toward achieving one of PNC's highest priorities, increasing our market penetration in Philadelphia and the Delaware Valley, our largest market. With the potential efficiencies we can capture, we expect this in-market transaction will have positive implications for our shareholders and should benefit earnings per share within the first 12 months."
 McConnell said, "Flagship's board has carefully reviewed all options available, including other potential combinations and remaining independent. We believe the transaction with PNC is in the best interest of our shareholders. The transaction with PNC also holds great promise for our customers, who will be able to avail themselves of products and services greater than a smaller institution alone can provide."
 "Flagship has a reputation for being a quality-oriented institution that shares with Provident and PNC the same values of offering a high level of customer service at a reasonable price," said Richard L. Smoot, president and chief executive officer of Provident.
 Flagship has assets of $947 million, deposits of $737 million and total shareholders' equity of approximately $80 million, as of Sept. 30, 1991.
 Flagship ranks among the 10 largest publicly traded thrifts and thrift holding companies in Pennsylvania and conducts business through its wholly owned subsidiaries, First American Savings F.A., and Brandywine Savings Bank, PaSA. First American currently operates 12 offices in southeastern Pennsylvania, and Brandywine currently operates nine offices in Chester County, Pa. The common stock of Flagship is traded on the NASDAQ National Market System under the symbol FLGF.
 PNC Financial Corp, headquartered in Pittsburgh, is the nation's 15th largest bank holding company, with assets of $44.9 billion. It operates approximately 500 community banking offices in Pennsylvania, Kentucky, Ohio, Indiana and Delaware and conducts business through additional offices in 16 states.
 PNC's principal banking affiliates include: Pittsburgh National Bank, Pittsburgh; Provident National Bank, Philadelphia; Citizens Fidelity Bank, Louisville, Ky.; Central Trust, Cincinnati; Bank of Delaware, Wilmington, Del.; Northeastern Bank, Scranton, Pa.; Marine Bank, Erie, Pa.; PNC National Bank, Wilmington; Hershey Bank, Hershey, Pa.; and The First Bank and Trust Company, Mechanicsburg, Pa.
 /delval/
 -0- 1/21/92
 /CONTACT: Robert K. Lockyer, chief financial officer, 215-576-3075, or (financial) Joseph F. Kubiak, 215-576-3078, both of Flagship Financial/
 (PNC FLGF) CO: PNC Financial Corp; Flagship Financial Corporation ST: Pennsylvania IN: FIN SU: TNM


MP-LJ -- PH005 -- 1677 01/21/92 09:42 EST
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Publication:PR Newswire
Date:Jan 21, 1992
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