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Susquehanna Bancshares and Tower Bancorp to merge

Five bank branches will close in the Tri-State area

November 17, 2011|By JULIE E. GREENE | julieg@herald-mail.com
  • William J. Reuter, Susquehanna chairman and chief executive officer said Susquehanna Bancshares and Tower Bancorp will merge. Bank officials will attempt to keep as many employees affected by the consolidations as they can, as there always are vacancies throughout the company. Susquehanna also will add employees to its loan center on Maugans Avenue north of Hagerstown, he said.
Herald-Mail file photo

The merger of Susquehanna Bancshares and Tower Bancorp, approved Wednesday by shareholders, will result in the closure of five local bank branches — one in Washington County, three in Franklin County, Pa., and one in Fulton County, Pa. — a Susquehanna corporate spokesman said Thursday.

William J. Reuter, Susquehanna chairman and chief executive officer, said bank officials will attempt to keep as many employees affected by the consolidations as they can, as there always are vacancies throughout the company. Susquehanna also will add employees to its loan center on Maugans Avenue north of Hagerstown, he said.

The merger, which is expected to be completed on Feb. 17, 2012, still needs final regulatory approval, said Reuter, who used to live in the local area and serves on the board at Meritus Medical Center.

Tower's bank at 18233 Maugans Ave. will close Feb. 17 as that branch will be consolidated into the Susquehanna branch at 13418 Marsh Pike, Susquehanna spokesman Stephen Trapnell said.

Work is going on now to expand the Marsh Pike branch, including adding drive-through lanes, Reuter said. Susquehanna anticipated having to retrofit that branch because the county took part of the right-of-way by the branch to widen a road, he said.

In Franklin County, both banks recently had built new branches across the street from each other on Norland Avenue in Chambersburg, Pa., Susquehanna officials said. The Tower branch will close Feb. 17, and the Susquehanna branch will remain open.

In downtown Greencastle, Pa., the Susquehanna branch will close after the nearby Tower branch is enlarged, including adding more capacity and drive-through lanes, Reuter said.

Both of those branches have been busy, so the remaining Tower branch will need to accommodate a larger customer base, Reuter said.

In Waynesboro, Pa., the drive-through operation at the Waynesboro Mall will close Feb. 17, Trapnell said. The lobby of the 232 E. Main St. branch will close that day and that branch will become a drive-through-only branch, he said.

Both of those Waynesboro branches are close to a Susquehanna branch at 10 W. Main St., which will remain open, Trapnell said.

In Fulton County, Pa., the Needmore, Pa., branch will close Feb. 17 and that operation will be consolidated into the McConnellsburg, Pa., branch, Trapnell said.

Once the merger is approved, Susquehanna will have about 260 branches in Maryland; Pennsylvania; Berkeley County, W.Va.; and southern New Jersey, bank officials said. That includes the addition of about 20 Tower branches and about 20 branches from Susquehanna's acquisition of Abington Bancorp Inc.

The acquisition of Abington was approved Oct. 1, according to an Oct. 3 Susquehanna news release filed with the U.S. Securities and Exchange Commission. That deal expands Susquehanna's presence in the greater Philadelphia area.

The merger will provide both Tower and Susquehanna customers more bank branches in Washington County, especially Tower customers because Tower only had a few branches in the county, Trapnell said.

The merger with Tower also will increase Susquehanna's capability to provide bigger loans for businesses, Trapnell said.

Bank officials still are evaluating bank fees at Susquehanna and Tower, so there might be some changes to make them consistent, Trapnell said. Tower customers should receive a welcome guide in January that would include such information, he said.

With the Tower merger, Susquehanna would have about $18 billion in assets, Reuter said.

The Tower bank merger has an approximate total value of $343 million, according to an SEC filing.

Tower shareholders will have the option of receiving either 3.4696 shares of Susquehanna common stock or $28 in cash for each share of Tower common stock, according to a joint news release about the merger. That arrangement is subject to proration so that $88 million of the merger consideration is paid in cash.

Since the proposed merger was announced in June, at least five individuals filed actions or sent Tower letters through their attorneys with various concerns about the merger, according to a Sept. 28 SEC filing by Tower Bancorp.

These included a federal lawsuit filed by a Tower shareholder whose allegations included that Tower's board of directors breached their fiduciary duties in connection with their approval of the merger because the consideration offered to Tower's shareholders allegedly was inadequate, according to the SEC filing.

To avoid the costs, risks and uncertainties of litigation, Tower and the other defendants entered into a memorandum of understanding with the plaintiffs on Sept. 28, according to the Sept. 28 SEC filing.

Under that agreement, both sides agreed to settle the lawsuits and demands, subject to court approval, according to the Sept. 28 SEC filing. Tower agreed to make additional information available to shareholders, and the plaintiffs agreed to dismiss their lawsuits and withdraw all motions and previous demands, according to the filing.

Reuter said anytime a merger occurs, legal action is expected.

"Unfortunately, that's the way of the world right now," he said.

Tower Bank came to Franklin, Fulton and Washington counties in 2009 when The First National Bank of Greencastle merged with Graystone Tower Bank under Tower Bancorp and changed the name of its local branches to Tower Bank, a division of Graystone Tower Bank, according to Herald-Mail archives.

With the acquisition of Tower, Susquehanna will expand its branch presence in Pennsylvania into Lebanon, Fulton and Centre counties.

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