Community Bank System, Inc. (“Community Bank System”) (NYSE: CBU) and Kinderhook Bank Corp. (OTCQB: NUBK) today announced that they have entered into a definitive agreement pursuant to which Community Bank System will acquire Kinderhook Bank Corp., parent company of National Union Bank of Kinderhook (“Kinderhook Bank”) in an all cash transaction representing total consideration valued at approximately $93.4 million.
Image: Community Bank System to acquire Kinderhook Bank. Photo: courtesy of IndypendenZ/FreeDigitalPhotos.net.
The transaction has been unanimously approved by the boards of directors of both companies.
This transaction will provide natural market extension for both institutions, joining two high-quality, low-risk franchises with long histories of customer service, as well as a commitment to their communities. Kinderhook Bank provides Community Bank, N.A. a solid operating presence in the Capital District of Upstate New York, with total assets of nearly $640 million, deposits of $560 million and 11 banking offices across a five county area.
Under the terms of the agreement, shareholders of Kinderhook Bank Corp. will receive consideration per share of common stock equal to $62.00 in cash. This price represents, assuming full conversion of preferred equity, approximately 193% of Kinderhook Bank Corp.’s tangible book value as of September 30, 2018.
“Our acquisition of Kinderhook Bank Corp. will extend our banking footprint into the attractive Capital District markets which are similar to the other Upstate New York markets in which we successfully compete,” said Mark E. Tryniski, President and Chief Executive Officer of Community Bank System. “Our move to establish a broader and deeper banking presence in this region reflects the relative economic, demographic and geographic attractiveness of the area. This investment also complements the financial commitment we made in 2018 when we added an experienced commercial banking team focused on the greater Albany area. We’re pleased with the results of this activity to date and confident that the Kinderhook franchise will further support our efforts to grow our retail and business banking presence in the Capital District. Kinderhook Bank has an impressive 165-year history of service to its customers, its communities and its shareholders, values which align closely with those of Community Bank. Equally important, our institutions have similar organizational values and cultures that respect and value the people that contribute to our success. We are delighted to welcome the Kinderhook Bank team to the Community Bank organization and look forward to the future of the combined company.”
“The shareholders, customers and associates of Kinderhook Bank should benefit from our merger with Community Bank System, a financially strong and effectively managed institution,” said John A. Balli, President and Chief Executive Officer of Kinderhook Bank Corp. “Our customers will continue to receive the highly personalized service they expect, while having access to a greatly expanded set of products and services available from the larger combined organization with an extensive branch network. We are pleased that all of the Kinderhook Bank branch offices will remain open and our employees benefit by becoming part of an organization which also values their commitment and contribution to the Company’s growth and profitability and which offers additional opportunities for professional growth and advancement. We view our combination with Community Bank as a win for all of our stakeholders, and we look forward to working closely with their team to complete the combination.”
Upon completion of the transaction, the combined company will have approximately $11.3 billion in assets. Community Bank System expects the transaction to be approximately $0.07 – $0.08 per share accretive to its first full year of GAAP earnings and $0.09 to $0.10 per share accretive to cash earnings, excluding any one-time transaction costs.
The merger is expected to close in the second quarter of 2019 and is subject to customary closing conditions, including approval by the shareholders of Kinderhook Bank Corp. and required regulatory approvals.
Loomis & Co. Inc. acted as exclusive financial advisor to Community Bank System and Cadwalader, Wickersham & Taft LLP acted as its legal advisor. Endicott Financial Advisors, L.L.C. and First Capital Equities, Ltd. acted as financial advisors to Kinderhook Bank Corp. and Cranmore, FitzGerald, & Meaney acted as its legal advisor.
Source: Company Press Release