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 JOHNSTOWN, Pa., Nov. 11 /PRNewswire/ -- USBANCORP, Inc. (NASDAQ-NMS: UBAN) and Johnstown Savings Bank (NASDAQ-NMS: JSBK) today jointly announced the signing of a definitive agreement pursuant to which Johnstown Savings Bank would merge with U.S. National Bank in Johnstown, one of USBANCORP's three banking subsidiaries.
 Under the terms of the definitive agreement, shareholders of Johnstown Savings Bank will receive .528 shares of USBANCORP common stock and $11.03 in cash for each share of Johnstown Savings Bank common stock.
 Alternatively, Johnstown Savings Bank shareholders may affirmatively elect to receive all stock or all cash consideration subject to certain limitations and provided that, in the aggregate, USBANCORP, Inc. will issue no more than 1,025,616 shares of common stock and will pay no more than $22,645,818 in cash. At a USBANCORP, Inc. stock price of $25.50, this represents a 55 percent stock and 45 percent cash split and an indicated transaction value of approximately $47.5 million or $24.50 per Johnstown Savings Bank share.
 Clifford A. Barton, chairman and chief executive officer of USBANCORP, Inc., said, "One of our strategic USBANCORP objectives is to pursue business combinations that enhance our company's profitability, increase shareholder value, and build market share. This merger will combine two strong Johnstown-based financial institutions and will benefit both customer bases by providing them with a more comprehensive line of retail, commercial and trust services, as well as additional convenient branch locations."
 Four Johnstown Savings Bank directors will join the U.S. National Bank board of directors when the transaction is completed. Of these four, two will also become directors of USBANCORP, Inc.
 Upon completion of the merger, U.S. National Bank will have the largest deposit market share in Cambria County with more than 26 percent of the total consumer deposit dollars available.
 The merger will increase USBANCORP's total assets by 28 percent to $1.6 billion and deposits will increase 20 percent to $1.3 billion. The combined holding company capital ratios will remain strong as equity to assets approximates 8.8 percent on a pro-forma basis at Sept. 30, 1993.
 In addition, the merger will result in combined trust assets of $950 million and a mortgage servicing operation with more than 16,000 residential mortgages totaling $820 million. Barton noted that the newly acquired mortgage servicing operation will provide USBANCORP with additional sources for generating non-interest income.
 "The affiliation with Johnstown Savings Bank matches USBANCORP, Inc.'s acquisition criteria and low-risk expansion strategy," Barton continued.
 By seizing identified earnings enhancement opportunities with respect to Johnstown Savings Bank (which approximate $3.8 million on a pre-tax basis or 80 percent of Johnstown Savings Bank's estimated 1993 stand-alone net income) the transaction will become accretive to shareholders in the second year. Earnings per share dilution in the initial year of acquisition is estimated to be less than 5 percent. Based upon the Sept. 30, 1993, pro-formas, however, the transaction is immediately accretive on a book value basis.
 Patrick J. Coyne, Johnstown Savings Bank president and chief executive officer, said, "The alliance with USBANCORP, Inc. will enable us to continue to provide personalized, community banking services to our customer base and will significantly improve our combined competitiveness and ability to continue the tradition of a full-service independent local financial institution meeting local needs."
 Coyne, who has led Johnstown Savings Bank since June 1989, has been responsible for greatly enhancing shareholder value through increased profitability.
 "At this stage of Johnstown Savings Bank's growth, I am certain that this new affiliation with U.S. National Bank is significantly beneficial for both our customers and our shareholders. While I will be leaving upon consummation of the transaction to pursue other opportunities and challenges as they may arise, I am confident that the established trend of improving profitability at Johnstown Savings Bank will continue through this new partnership. The management of USBANCORP has, during the past several years, demonstrated an accomplished record of financial and shareholder success. I strongly endorse this partnership which will benefit both shareholder groups," said Coyne.
 The transaction is subject to regulatory approvals and approval by the shareholders of USBANCORP, Inc. and Johnstown Savings Bank. Johnstown Savings Bank also has the right to terminate the transaction in the event USBANCORP's average stock price for the 10 trading days prior to closing is less than $23. Under the terms of the agreement, Johnstown Savings Bank has granted to USBANCORP, Inc. an option to purchase 19.9 percent of Johnstown Savings Bank's authorized shares under certain circumstances.
 USBANCORP, Inc., a community bank holding company, is the parent of U.S. National Bank and USBANCORP Trust Company in Johnstown and two Pittsburgh affiliates, Three Rivers Bank and Community Bancorp, Inc. The company's subsidiaries provide full-service banking to six southwestern Pennsylvania counties through 41 community offices. The counties served include Allegheny, Cambria, Clearfield, Somerset, Washington and Westmoreland.
 Johnstown Savings Bank operates six full-service community banking offices in the greater Johnstown area and a mortgage banking company.
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 /CONTACT: Terry K. Dunkle, executive vice president, 814-533-5201, or Orlando B. Hanselman, senior vice president, treasurer & CFO, 814-533-5319, of USBANCORP; or Patrick J. Coyne, president & CEO, 814- 535-8901, or Walter F. Rusnak, senior vice president & CFO, 814-535-8904, of Johnstown Savings Bank/

CO: USBANCORP, Inc.; Johnstown Savings Bank; U.S. National Bank ST: Pennsylvania IN: FIN SU: TNM

CD-LJ -- PG004 -- 3105 11/11/93 09:24 EST
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Publication:PR Newswire
Date:Nov 11, 1993

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