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Filed by Lawrence Financial Holdings, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Lawrence Financial Holdings, Inc.
Commission File No.: 0-31847
N E W S R E L E A S E
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FOR IMMEDIATE RELEASE OCTOBER 12, 2004
CONTACT:
R. E. Coffman, Jr. or David G. Ratz Jack F. Blair
President & CEO Executive VP & COO President & CEO
Oak Hill Financial, Inc. Lawrence Financial Holdings, Inc.
14621 SR 93 311 S. Fifth St.
Jackson, OH 45640 Ironton, OH 45638
(740) 286-3283 (740) 532-0263
OAK HILL FINANCIAL, INC. AND LAWRENCE FINANCIAL HOLDINGS, INC.
SIGN DEFINITIVE MERGER AGREEMENT
JACKSON AND IRONTON, OHIO - Oak Hill Financial, Inc. (Nasdaq NMS: OAKF) and
Lawrence Financial Holdings, Inc. (OTC: LWFH) jointly announced today the
signing of a definitive agreement to merge Lawrence Financial with and into Oak
Hill.
Under the terms of the agreement, stockholders of Lawrence Financial will be
entitled to elect to receive, in exchange for each share of Lawrence Financial
common stock held, either $23.75 in cash or an equivalent amount in shares of
Oak Hill common stock (based upon the average of the last sales price of Oak
Hill common stock for the 20 most recent full trading days ending at the close
of trading four business days prior to the merger), or a combination thereof.
This is subject to certain allocation and pro rata mechanisms as part of the
election process. In total, between 50.0% and 52.0% of Lawrence Financial common
shares will be exchanged for Oak Hill common shares and, accordingly, between
48.0% and 50.0% of Lawrence Financial common shares will be exchanged for cash.
To the extent that Oak Hill common shares are received, the exchange is expected
to qualify as a tax-free acquisition to Lawrence Financial stockholders. The
estimated total value of the proposed transaction is $15.4 million.
The merger is expected to be completed in the first quarter of 2005 pending
Lawrence Financial stockholder approval, regulatory approval, and other
customary conditions of closing.
Lawrence Financial President and CEO Jack L. Blair stated that the merger will
provide significant benefits to Lawrence Financial's stockholders, customers,
and employees. "Joining forces with a larger, growing organization will enhance
liquidity for our stockholders, enable us to offer a much broader line of
banking services, and create more career opportunities for our employees," Blair
stated. "Oak Hill is one of the premier community banking companies in Ohio.
They have an outstanding record of performance and an excellent history of
growth and service to their customers and local communities."
R. E. Coffman, Jr., President and CEO of Oak Hill Financial, stated, "This will
be a great partnership. We are very impressed with the way the people at
Lawrence Financial have operated their bank. They have an
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excellent track record in their market. This merger is an exciting growth
opportunity for both of our organizations."
Coffman added that a key benefit of the merger is the geographic fit between the
Southern Ohio market areas served by the two banks. "Lawrence Financial's
primary market is Lawrence County and they also have one office in Scioto
County," said Coffman. "We have one branch that we recently opened in Lawrence
County and we were looking to expand there, and we have three established
branches in Scioto County, so there are strong synergies. With the merger, we
will be number two in market share in Lawrence County and significantly improve
our position in Scioto County."
Coffman added, "We expect the merger with Lawrence Financial to be as much about
3% accretive to earnings per share in 2005 and over 5% accretive in 2006 and
beyond."
At June 30, 2004, Oak Hill Financial had total assets of $980.8 million, net
loans of $845.9 million, deposits of $366.1 million, and stockholders' equity of
$37.5 million. At the same date, Lawrence Financial had total assets of $125.0
million, net loans of $83.4 million, deposits of $110.7 million, and
stockholders' equity of $13.7 million. Pursuant to the merger negotiations,
Lawrence Financial has entered into separate agreements to sell various loans
that do not fit Oak Hill Financial's lending profile. The estimated current
amount of the loans to be sold is $11.9 million.
On October 9, 2004, Oak Hill Financial completed its previously announced merger
with Ripley National Bank of Ripley, Ohio. The Ripley merger brings $52.2
million in assets, $39.5 million in net loans, and $47.2 million in deposits to
Oak Hill's balance sheet. The price to book value of the Ripley transaction was
134%.
Keefe, Bruyette, and Woods is serving as Lawrence Financial's financial advisor
and RP Financial, Inc. assisted Oak Hill Financial in connection with this
transaction. Porter, Wright, Morris & Arthur LLP represented Oak Hill Financial,
while Muldoon Murphy Faucette & Aguggia LLP represented Lawrence Financial.
ABOUT OAK HILL FINANCIAL
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Oak Hill Financial is a financial holding company headquartered in Jackson,
Ohio. Its banking affiliate, Oak Hill Banks, operates 29 full-service branches
and four loan production offices in 15 counties in southern and central Ohio.
Oak Hill also owns Action Finance, a consumer finance company with six offices
in the same region; Oak Hill Financial Insurance Agency, Inc, which specializes
in employee benefits; and 49% of Oak Hill Title Agency LLC.
ABOUT LAWRENCE FINANCIAL
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Lawrence Financial is a savings and loan holding company headquartered in
Ironton, Ohio. Its subsidiary, Lawrence Federal Savings Bank, operates five
banking offices in Lawrence County, which is in the Ohio portion of the
Huntington-Ashland MSA, and Scioto County. A second subsidiary, Lawrence
Financial Services Corp., only holds liquid assets in the form of cash.
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OAK HILL FINANCIAL/LAWRENCE FINANCIAL CORP. MERGER
SUMMARY FACT SHEET
AGREEMENT DATE October 12, 2004
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DEAL STRUCTURE & TERMS Definitive agreement signed
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Due diligence completed
Agreement terminates if the merger is not completed
by September 1, 2005
$500,000 break-up fee
48.0% to 50.0% of the common shares of Lawrence
Financial will be purchased in cash for $23.75. The
remaining shares will be exchanged for common shares
of Oak Hill Financial, with the exchange ratio to be
equal to $23.75 divided by the average of the last
sales price of Oak Hill common for the 20 most recent
full trading days in which the shares are traded on
the Nasdaq NMS ending at the close of trading four
business days prior to the effective date of merger.
TIMING Subject to normal regulatory approval and
- ------ stockholder approval by Lawrence Financial. Closing
expected by March 31, 2005.
PRICING Purchase price per share $23.75
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Estimated price to book value(1) 142%
Estimated Oak Hill shares to be issued (000)(2) 213 - 222
Estimated transaction value $16.0 million
(1) Based on Lawrence Federal's current book value
adjusted for the anticipated loan sale.
(2) Based on OAKF's closing price of $36.17 on
10/12/04
TRANSACTION RATIONALE
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* Logical contiguous expansion into complementary market area.
* Lawrence Financial has a strong 21.0% deposit market share in Lawrence County.
* Oak Hill will have the opportunity to enhance Lawrence Financial's net
interest margin and noninterest income.
* Growth potential within Lawrence Financial's existing customer base, which
represents a built-in market for Oak Hill's broader product line.
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* Potential for generating commercial and commercial real estate loans within
the Huntington-Ashland MSA.
OTHER
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Prior to the signing of the definitive merger agreement, there was no material
relationship between Oak Hill Financial and Lawrence Financial Holdings or any
of their affiliates.
FORWARD-LOOKING STATEMENTS
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This release contains certain forward-looking statements about the proposed
merger of Oak Hill Financial and Lawrence Financial, which are subject to
numerous assumptions, risks and uncertainties. These statements include
statements regarding the anticipated closing date of the transaction and
anticipated future results. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current facts and often
include words like "believe," "expect," "anticipate," "estimate," and "intend"
or future or conditional verbs such as "will," "would," "should," "could" or
"may." Actual results could differ materially from those contained or implied by
such statements for a variety of factors including: delays in completing the
merger, the required governmental approvals of the merger may not be obtained on
the proposed terms and schedule; Lawrence Financial's stockholders may not
approve the merger; difficulties in achieving cost savings from the merger or in
achieving such cost savings within the expected time frame, difficulties in
integrating Oak Hill Financial and Lawrence Financial, increased competitive
pressures, changes in the interest rate environment, changes in general economic
conditions, legislative and regulatory changes that adversely affect the
business in which Oak Hill Financial and Lawrence Financial are engaged, and
changes in the securities markets. All forward-looking statements included in
this release are based on information available at the time of the release.
Neither Oak Hill Financial nor Lawrence Financial assume any obligation to
update any forward looking statement
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
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Oak Hill Financial and Lawrence Financial will be filing relevant documents
concerning the transaction with the Securities and Exchange Commission,
including a registration statement on Form S-4, which will include a proxy
statement/prospectus. Stockholders will be able to obtain a free copy of the
proxy statement/prospectus, as well as other filings containing information
about Oak Hill Financial and Lawrence Financial at the SEC's website,
www.sec.gov. In addition, documents filed with the SEC by Oak Hill Financial
will be available free of charge from the Corporate Secretary of Oak Hill
Financial at 14621 SR 93, Jackson, Ohio 45640, telephone 740-286-3283, or from
the Chief Financial Officer of Lawrence Financial Holdings at 311 S. Fifth St.,
Ironton, Ohio, telephone 740-532-0263.
STOCKHOLDERS AND INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND
OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
REGARDING THE TRANSACTION, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
OAK HILL FINANCIAL, LAWRENCE FINANCIAL, THE MERGER, THE PERSONS SOLICITING
PROXIES IN THE MERGER AND THEIR INTERESTS IN THE MERGER AND RELATED MATTERS.
Lawrence Financial and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from Lawrence Financial's
stockholders to approve the merger. Information about the directors and
executive officers of Lawrence Financial and their ownership of Lawrence
Financial common stock is set forth in Lawrence Financial's proxy statement as
filed with the SEC on April 8, 2004. Additional information about the interests
of those persons in the merger may be obtained from the definitive proxy
statement/prospectus regarding the proposed merger when it becomes available.