Bank to combine with partner

January 08, 2009|By KATE S. ALEXANDER

GREENCASTLE, Pa. - After more than 100 years as a local bank "of Greencastle," the First National Bank on center square and its 16 branches in Franklin and Fulton County will soon upgrade to a new name, more capital and a more formidable position in the financial market.

First National Bank of Greencastle announced in November plans to partner with Harrisburg, Pa.-based Graystone Bank under the name Graystone Tower Bank.

Executives of First National Bank and its holding company, Tower Bankcorp Inc., together with executives of Graystone Bank and its holding company, Graystone Financial Inc., sent letters to shareholders and customers detailing the plan and assuring them the company plans to keep all existing branches and continue the same level quality of service.

The beauty of the partnership is that because there is no overlap in services, all existing institutions will remain open, said Jeff Shank, president and CEO of First National Bank of Greencastle.


Shank said combining the banks under the same banner will provide the capital to potentially open more branches in central and south-central Pennsylvania as well as the flexibility to offer more products and services.

According to a press release issued by Tower Bankcorp Inc., Graystone Bank has nine branches serving Centre, Cumberland, Dauphin, Lancaster, Lebanon and York counties that it will bring to the partnership.

While plans are under way and lawyers and accountants are preparing for the official merger in early 2009, Shank said the companies are still waiting for a final vote of approval from shareholders at the first-quarter meeting.

Shank said he is optimistic that the benefits of the partnership will help it pass with shareholders.

Graystone President and CEO Andrew Samuel said the move is a "win-win for employees, customers, shareholders and the community."

Partnering with Graystone Bank, First National Bank will give the new Graystone Tower Bank an estimated $1.2 billion in capital, Samuel said.

It will also give it a NASDAQ listing.

Listing on the NASDAQ is perhaps the greatest benefit to shareholders, as it provides more liquidity and position in the market, Shank said.

As a company with larger capital, the listing will afford shareholders additional dividends up to $1.12 per share.

For those who use First National Bank of Greencastle every day, Shank said the only visible change will be the name on the Carlisle Street building, which will be Tower Bank, a division of Graystone Tower Bank.

"The idea was to partner with Graystone and not affect the services which touch our customers," Shank said. "Our goal is for customers to be able to see the same faces they have known for years, to walk into a branch or pick up a phone and talk who they want."

Some Greencastle jobs will move to the new central office expected to be in Harrisburg, but very few, Shank said.

First National Bank of Greencastle is separately chartered from the First National Bank of Mercersburg.

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