Citizens to acquire Fredericksburg, Pa. bank

Citizens Financial Services Inc., the holding company for First Citizens Community Bank, and The First National Bank of Fredericksburg announced Thursday they had signed a merger agreement.

Citizens, headquartered in Mansfield, will acquire Fredericksburg, Pennsylvania-based FNB by merging the bank into First Citizens.

Citizens had consolidated total assets of $930 million on March 31, according to a joint news release. It operates 18 full-service offices in Pennsylvania and New York. FNB had total assets of $238.1 million in March, according to the news release. It serves the Lebanon Valley region, situated between Harrisburg and Allentown, through seven full-service offices in Lebanon, Berks and Schuylkill counties in Pennsylvania.

Upon completion of the transaction, the combined company will have approximately $1.1 billion in total assets, $1 billion in total deposits and $710 million in total loans, according to the news release.

The cash and stock transaction is valued at approximately $22.1 million, based on Citizen’s closing stock price as of June 30, according to the news release.

Under the terms of the merger agreement, which has been approved by the boards of directors, each FNB stockholder will be entitled to elect to receive $630 in cash, shares of Citizens common stock based on a fixed exchange ratio of 12.6 shares of Citizens common stock for each share of FNB common stock, or a combination of cash and stock, in exchange for each share of FNB common stock owned at the closing of the transaction, according to the news release.

“We are excited to expand our franchise into the Lebanon Valley through our partnership with FNB,” said Randall E. Black, Citizens’ and First Citizens’ president and chief executive officer, in a statement. “The board, leadership team and employees of FNB have built a great community banking model focused on customer service and being a true community partner.”

Citizens plans to operate the FNB market as a separate and distinct market, with local decision making and oversight, Black said.

“With the challenges we continue to face in a changing banking industry, this transaction offers greater opportunities to our shareholders, employees, customers and the communities we serve,” said Rodney P. Seidel, FNB’s president and chief executive officer, in a statement.

The transaction is expected to be completed in the fourth quarter of 2015 and is subject to regulatory approvals and the approval of FNB’s stockholders.