Community Bank System to Enhance Capital District Presence with Acquisition of Kinderhook Bank Corp.
January 22, 2019
Community Bank System to Enhance Capital District Presence with
Acquisition of Kinderhook Bank Corp.
January 22, 2019 - SYRACUSE, NY and KINDERHOOK, NY—(BUSINESS WIRE)--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. 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.
Community Bank System will host a conference call at 11 am (ET) on Wednesday, January 23, 2019 to
discuss its fourth quarter 2018 financial results and the combination with Kinderhook Bank Corp. The
conference call can be accessed at 866-337-5532 using the conference ID code 7885932. Investors may
also listen live via the Internet at: https://www.webcaster4.com/Webcast/Page/995/28890.
About Community Bank System, Inc.
Community Bank System, Inc. operates more than 230 customer facilities across Upstate New York and
Northeastern Pennsylvania, Vermont, and Western Massachusetts through its banking subsidiary,
Community Bank, N.A. With assets of approximately $10.6 billion, the DeWitt, N.Y. headquartered
company is among the country's 150 largest financial institutions. In addition to a full range of retail,
municipal, and business banking services, the Company offers comprehensive financial planning, trust
and wealth management services through its’ Community Bank Wealth Management Group and
OneGroup NY, Inc. operating units. The Company's Benefit Plans Administrative Services, Inc. subsidiary
is a leading provider of employee benefits administration, trust services, collective investment fund
administration and actuarial and consulting services to customers on a national scale. Community Bank
System, Inc. is listed on the New York Stock Exchange and the Company's stock trades under the symbol
CBU. For more information about Community Bank visit www.communitybankna.com or
http://ir.communitybanksystem.com .
About Kinderhook Bank Corp.
Kinderhook Bank Corp. reported total assets at September 30, 2018 of approximately $640 million, and is
the holding company for National Union Bank of Kinderhook. The bank's business, municipal, and
consumer customers enjoy personalized relationships, online and mobile banking options, with 11
branches in upstate New York. Kinderhook Bank Corp. is listed on the OTCQB Venture Market and
trades under the symbol NUBK. For more information about Kinderhook Bank visit www.nubk.com.
Acquisition of Kinderhook Bank Corp.
January 22, 2019 - SYRACUSE, NY and KINDERHOOK, NY—(BUSINESS WIRE)--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. 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.
Community Bank System will host a conference call at 11 am (ET) on Wednesday, January 23, 2019 to
discuss its fourth quarter 2018 financial results and the combination with Kinderhook Bank Corp. The
conference call can be accessed at 866-337-5532 using the conference ID code 7885932. Investors may
also listen live via the Internet at: https://www.webcaster4.com/Webcast/Page/995/28890.
About Community Bank System, Inc.
Community Bank System, Inc. operates more than 230 customer facilities across Upstate New York and
Northeastern Pennsylvania, Vermont, and Western Massachusetts through its banking subsidiary,
Community Bank, N.A. With assets of approximately $10.6 billion, the DeWitt, N.Y. headquartered
company is among the country's 150 largest financial institutions. In addition to a full range of retail,
municipal, and business banking services, the Company offers comprehensive financial planning, trust
and wealth management services through its’ Community Bank Wealth Management Group and
OneGroup NY, Inc. operating units. The Company's Benefit Plans Administrative Services, Inc. subsidiary
is a leading provider of employee benefits administration, trust services, collective investment fund
administration and actuarial and consulting services to customers on a national scale. Community Bank
System, Inc. is listed on the New York Stock Exchange and the Company's stock trades under the symbol
CBU. For more information about Community Bank visit www.communitybankna.com or
http://ir.communitybanksystem.com .
About Kinderhook Bank Corp.
Kinderhook Bank Corp. reported total assets at September 30, 2018 of approximately $640 million, and is
the holding company for National Union Bank of Kinderhook. The bank's business, municipal, and
consumer customers enjoy personalized relationships, online and mobile banking options, with 11
branches in upstate New York. Kinderhook Bank Corp. is listed on the OTCQB Venture Market and
trades under the symbol NUBK. For more information about Kinderhook Bank visit www.nubk.com.
Contact:
Dori McDannold, VP Marketing
dmcdannold@nubk.com, (518) 650-8199 x108
