(Syracuse, Oneida, NY – March 2015) Community Bank System, Inc. (NYSE: CBU) and Oneida Financial Corp. (NASDAQ: ONFC) recently announced the signing of a definitive agreement pursuant to which Community Bank System, Inc. will acquire Oneida Financial Corp., parent company of Oneida Savings Bank in Oneida for approximately $142 million in Community Bank System, Inc. stock and cash, or $20 per share.
Under the terms of the agreement, shareholders of Oneida Financial Corp. can elect to receive either 0.5635 shares of Community Bank System, Inc. common stock or $20.00 in cash for each share of Oneida Financial Corp. common stock they hold, subject to an overall 60 percent stock and 40 percent cash split. The merger agreement has been unanimously approved by the board of directors of both companies.
The merger will combine two institutions with a long history of community-focused service and will result in the creation of the fourth largest institution by market share in the Syracuse, New York metropolitan statistical area (MSA). In addition, Oneida Financial Corp.’s significant insurance, benefits administration, and wealth management businesses will meaningfully strengthen and complement Community Bank System, Inc.’s existing non-banking service capacity.
Oneida Financial Corp. has total assets of nearly $800 million, deposits of $690 million, and 12 banking offices across Madison and Oneida Counties.
“We are very excited to be partnering with Oneida Financial Corp. to further extend and strengthen our Central New York service area,” said Community Bank System, Inc. President & Chief Executive Officer Mark E. Tryniski. “Oneida Financial Corp. has a leading market presence in Madison County, attractive share in Oneida County, and has built impressive businesses in insurance, benefits, and wealth management. Even more important to us, Oneida Financial Corp. has an impeccable history of service to its customers and its communities, and a culture that aligns very well with that of Community Bank System, Inc.”
Michael R. Kallet, Chairman and Chief Executive Officer of Oneida Financial Corp. commented, “This is an ideal opportunity for Oneida Financial Corp. to partner with a true community bank that has been nationally recognized for its financial strength and exceptional customer service. Their focus on customers and communities is identical to ours, and our customers will benefit from an expanded network of branch locations and ATM’s, and broader product and service offerings.” Mr. Kallet continued, “We are pleased with the attractive market premium our shareholders will be receiving, in addition to a greater dividend and substantial market liquidity. Community Bank System, Inc. has an impressive history of creating shareholder value through both earnings and dividend growth.”
Community Bank System, Inc. expects the transaction to be accretive in 2015 excluding merger costs, and approximately $0.07 per share accretive to 2016 GAAP earnings and $0.11 per share accretive to 2016 cash earnings.
The merger agreement provides for Michael Kallet and Eric Stickels from Oneida Financial Corp. to be added to the Board of Directors of Community Bank System, Inc. The merger is expected to close in July 2015 and is subject to approval by the shareholders of Oneida Financial Corp. and required regulatory approvals.
RBC Capital Markets, LLC acted as exclusive financial advisor to Community Bank System, Inc. and Bond Schoeneck & King, PLLC acted as its legal advisor. Keefe, Bruyette & Woods, A Stifel Company acted as exclusive financial advisor to Oneida Financial Corp. and rendered a fairness opinion and Luse Gorman, P.C. acted as its legal advisor.