HARRISBURG, Pa.--(BUSINESS WIRE)--LINKBANCORP, Inc. (OTC Pink: LNKB) and GNB Financial Services, Inc., (OTC Pink: GNBF) today announced the execution of a definitive agreement to combine in a stock and cash transaction, creating a leading Pennsylvania community bank with assets in excess of $800 million and a network of nine offices throughout South Central Pennsylvania.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, GNB Financial Services will merge with and into LINKBANCORP, with LINKBANCORP surviving the merger. Shareholders of GNB Financial will have the opportunity to elect to receive $87.68 per share in cash or 7.3064 shares of LINKBANCORP common stock for each share they own, representing a total valuation of approximately $62.6 million based on the trading price of LINKBANCORP as of December 7, 2020. The agreement provides for proration procedures intended to ensure that, in the aggregate, at least 80 percent of the GNB Financial common shares outstanding will be exchanged for LINKBANCORP common stock. The transaction is expected to be a tax-free exchange to the extent shareholders of GNB Financial receive stock in exchange for their shares. LINKBANCORP shareholders will own approximately 52% and GNB Financial shareholders will own approximately 48% of the combined company.
“This is a true partnership, leveraging the strengths of each institution to create a community bank that is extremely well positioned for the future,” said LINKBANCORP Chief Executive Officer Andrew Samuel, who founded LINKBANCORP in 2018 and will serve as CEO of the combined company. “It’s a very attractive financial transaction that accelerates our growth plan and evidences our commitment to an entrepreneurial, values-driven community banking model that positively impacts all of our constituencies,” said Samuel.
The combined company’s board of directors will be evenly split between the two institutions, and will be chaired by Joseph C. Michetti, Jr., currently the Chairman of GNB Financial.
Wesley M. Weymers, Chief Executive Officer of GNB Financial, stated, “We have great respect for LINKBANK’s very experienced and talented team and what they have accomplished in a relatively short period. This partnership is an exciting opportunity to combine two very complementary institutions and achieve the scale and talent needed to compete and thrive in a rapidly evolving environment.”
The companies anticipate that the combination, uniting the rich and successful legacy of The Gratz Bank, which was founded in 1934, with the growth-oriented commercial bank model of LINKBANK, will result in significant earnings growth. Following the effective date of the combination, LINKBANCORP intends to pay a quarterly dividend consistent with the historical practice of GNB Financial, provided sufficient funds are legally available and that the surviving bank remains “well capitalized” in accordance with applicable regulatory guidelines.
Although the companies’ subsidiary banks, LINKBANK and The Gratz Bank, will merge immediately following the parent company merger, with The Gratz Bank as the surviving legal entity, both community-based institutions will continue operating under their established brands and their respective customers will receive the same high-level of services and products from the familiar faces at their existing locations. No branch locations are anticipated to close as a result of the combination.
Simultaneous with the agreement, Mr. Weymers entered into a new employment agreement pursuant to which he will serve as Executive Chairman of The Gratz Bank at the effective time of the combination, joining current GNB executives Jeremy Dobbin, Aaron Klinger and Kevin Laudenslager who will each assume senior management positions at the combined bank, and the existing LINKBANK executives who will maintain their current roles, to form a highly experienced leadership team, led by Mr. Samuel as Chief Executive Officer.
The parties expect to complete the transaction in mid-2021, after satisfaction of customary closing conditions, including required regulatory and shareholder approvals.
Cedar Hill Advisors LLC acted as financial advisor to LINKBANCORP, Inc. and Boenning & Scattergood, Inc. acted as financial advisor to GNB Financial Services, Inc. Hogan Lovells US LLP acted as legal counsel for LINKBANCORP, Inc. and Pillar + Aught acted as legal counsel for GNB Financial Services, Inc.
ABOUT LINKBANCORP, Inc.
LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, LINKBANK is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Central and Southeastern Pennsylvania. As of September 30, 2020, LINKBANK had total assets of approximately $368.6 million. LINKBANCORP, Inc. common stock is traded over the counter (OTC Pink) under the symbol “LNKB”.
ABOUT GNB FINANCIAL SERVICES, Inc.
GNB Financial Services, Inc. is the parent company of The Gratz Bank and GNB Investment Corp. Founded in 1934, The Gratz Bank is a full-service state chartered commercial bank, providing a variety of financial services to individual and commercial customers throughout Dauphin County, Pennsylvania, and other contiguous counties, through its main office located in Gratz, Pennsylvania, its branch offices in Valley View, Herndon, Pottsville, Minersville and Trevorton, Pennsylvania, and its loan production office in State College, Pennsylvania. As of September 30, 2020, GNB Financial services had total assets of approximately $437.1 million. GNB Financial Services common stock is traded over the counter (OTC Pink) under the symbol “GNBF”.
