[National Penn Bancshares, Inc. Logo] [Nittany Financial Corp. Logo]
PRESS RELEASE
National Penn contact: Karen L. Troutman
(610) 369-6365
kltroutman@natpennbank.com
Nittany contact: David Z. Richards Jr.
(814) 238-5724
DRichards@NittanyBank.com
NATIONAL PENN BANCSHARES, INC. TO ACQUIRE
NITTANY FINANCIAL CORPORATION
Boyertown, Pa. and State College, Pa., September 7, 2005 -- National Penn
Bancshares, Inc. (NASDAQ: NPBC), the parent company of National Penn Bank, and
Nittany Financial Corporation, (OTCBB: NTNY), the parent company of Nittany
Bank, announced today that they have signed a definitive merger agreement under
which National Penn Bancshares would acquire Nittany Financial in a transaction
valued at approximately $96.5 million.
Nittany Financial is a financial services company, with $326.5 million in
assets, headquartered in State College, Centre County, Pennsylvania. Its Nittany
Bank subsidiary operates four community offices in State College and one in
Bellefonte. Nittany Financial also has $310 million under management through two
of its subsidiaries, Vantage Investment Advisors, LLC, and Nittany Asset
Management, Inc.
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Under the terms of the merger agreement, which was unanimously approved
by the boards of directors of both companies:
o Nittany Financial shareholders will be entitled to exchange each share of
Nittany Financial common stock for 1.58 shares of National Penn Bancshares
common stock or $ 42.43 in cash. The five-for-four stock split that
National Penn Bancshares announced on August 24, 2005, with an effective
date of September 30, 2005, results in an adjusted exchange ratio of 1.975
shares of National Penn Bancshares common stock. This exchange ratio is
subject to further adjustment as set forth in the definitive agreement
based on changes in the market price of National Penn Bancshares common
stock.
o Nittany Financial shareholders may elect to receive cash, National Penn
Bancshares common stock or a combination of both for their Nittany
Financial shares. Additionally, the elections of Nittany Financial
shareholders are further subject to allocation procedures that are intended
to result in the exchange of 30% of the Nittany Financial shares for cash,
and the remaining 70% exchanged for shares of National Penn common stock.
o Options to purchase shares of Nittany Financial common stock will be
converted into options to purchase shares of National Penn Bancshares
common stock.
o Nittany Bank will ultimately retain its name as a division of National Penn
Bank and initially operate as a subsidiary of National Penn Bancshares,
Inc. Two non-management members of Nittany Financial's board will be
offered seats on the board of National Penn Bank. Nittany Financial
President and CEO David Z. Richards Jr. will remain as president and CEO of
Nittany Bank. He also will join National Penn's Leadership Group, the
company's senior management team.
o The existing executive management team at Nittany Financial has entered
into employment agreements with National Penn Bancshares and will continue
to lead the combined company's business expansion efforts in Centre County,
Pa.
Upon completion of the merger, National Penn expects to have assets in
excess of $5 billion and to remain the seventh largest bank holding company
headquartered in Pennsylvania.
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The transaction, anticipated to close in the first quarter of 2006, is
subject to several conditions and contingencies, including approvals by the
Federal Reserve Bank and the Pennsylvania Department of Banking and the
affirmative vote of the shareholders of Nittany Financial. All directors,
certain executive officers and greater-than-five percent shareholders of Nittany
Financial (collectively holding approximately 40 percent of the outstanding
shares of Nittany Financial common stock ) have agreed in letter agreements
signed with National Penn to vote in favor of the merger.
In a joint announcement made today by Wayne R. Weidner, chairman and
CEO of National Penn Bancshares, and Samuel J. Malizia, chairman of Nittany
Financial, Weidner stated, "Nittany is a financially strong institution with
excellent leadership and a similar culture and focus on the customer as National
Penn's. They also have built a strong market position in a geographic area that
is one of the fastest growing regions in Pennsylvania in terms of job growth.
The State College area also is experiencing growth in the commercial and real
estate sectors -- two of National Penn's core strengths."
Nittany chairman, Samuel J. Malizia said, "With our success in our
marketplace and National Penn's financial success and excellent reputation, this
is a win-win for everyone. Our customers will benefit most, because they will be
served by the same supportive staff, but will have access to a wider range of
services through the new parent company."
Glenn E. Moyer, president of National Penn, said, "This transaction
gives us entry into an exciting market with many possibilities for expansion.
It's also consistent with our strategy of acquiring highly successful
organizations, then allowing them to run according to their business model and
grow with the additional resources we have to offer."
David Z. Richards, president and CEO of Nittany Financial Corp. said,
"National Penn is unique from many other financial institutions, with a history
of providing excellent support to the community banks they acquire, while
allowing them to build on their entrepreneurial spirit. They clearly understood
the importance of maintaining our growth strategy and team of professional
bankers. The message to our shareholders, customers, community and employees is
that the same Nittany Bank, with its core values and customer focus, will
continue to improve."
There are 2,270,442 shares of Nittany Financial common stock
outstanding and 90,909 options outstanding at an average exercise price of
$8.62. Based on a 10-day average closing price per share for National Penn of
$25.75, the 70% stock and 30% cash blended acquisition price per share of $41.21
represents 24.8 times Nittany Financial's trailing twelve months earnings and
3.69 times Nittany Financial's book value as of June 30, 2005. Nittany
Financial's June 30, 2005 historical
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financial data has not been adjusted for recent option exercise.
The merger is expected to be non-dilutive to National Penn Bancshares'
earnings per share by the end of the first full year of combined operations, and
accretive in the second full year of combined operations, based on anticipated
revenue enhancements and cost savings. As with any earnings estimate, there are
factors that could cause the actual results to differ materially, such as the
factors discussed in National Penn Bancshares' filings with the Securities and
Exchange Commission.
Sandler O'Neill & Partners, L.P. provided a fairness opinion about the
transaction to National Penn Bancshares and Ryan Beck & Co. provided a fairness
opinion to Nittany Financial. Reed Smith LLP is legal counsel to National Penn
Bancshares, and Malizia Spidi Fisch, PC is legal counsel to Nittany Financial.
ABOUT NATIONAL PENN BANCSHARES, INC.:
National Penn Bancshares, Inc. is a $4.59 billion asset financial
services company operating 73 offices in southeastern Pennsylvania through
National Penn Bank and its FirstService Bank, HomeTowne Heritage Bank, and The
Peoples Bank of Oxford divisions. The Peoples Bank of Oxford Division also
operates one community office in Cecil County, Maryland. National Penn's
investment management units, with combined client assets approaching $1.6
billion, consist of National Penn Investors Trust Company, which provides trust
and investment management services; National Penn Investment Services, which
markets brokerage services provided by PrimeVest Financial Services, Inc.; and
FirstService Capital, Inc, which provides investment advisory services. National
Penn Bancshares also provides mortgage banking activities through National Penn
Mortgage Company; insurance services through National Penn Insurance Agency,
Inc.; and equipment leasing services through National Penn Leasing Company.
National Penn Bancshares, Inc. common stock is traded on the NASDAQ Stock Market
under the symbol "NPBC." Additional information about the National Penn family
is available on the company's Web site at www.nationalpennbancshares.com.
ABOUT NITTANY FINANCIAL CORPORATION:
Nittany Financial Corp. is the parent company for Nittany Bank, a
federally chartered financial institution headquartered and operated in State
College, Pennsylvania. Nittany Bank began operations
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in October 1998 and currently operates four offices in State College and one
office in Bellefonte, five ATMs, telephone banking [(814) 231-1800] and
transactional internet banking. Nittany also owns two investment subsidiaries.
Nittany Asset Management, Inc. offers retail investment products through the
Bank's five offices. Vantage Investment Advisors, LLC is a registered investment
advisory firm providing fee-based investment management services. Vantage
currently manages approximately $310 million in investments for small business
retirement plans as well as individual portfolio management for consumers.
Additional information about Nittany Financial is available on the company's Web
site at www.nittanybank.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This release contains forward-looking information about National Penn
Bancshares, Inc., Nittany Financial Corporation and the combined operations of
National Penn Bancshares, Inc. and Nittany Financial Corporation after the
completion of the transactions described in the release that are intended to be
covered by the safe harbor for forward-looking statements provided by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts. These statements can be identified by
the use of forward-looking terminology such as "believe," "expect," "may,"
"will," "should," "project," "plan," "seek," "intend," or "anticipate" or the
negative thereof or comparable terminology, and include discussions of strategy,
financial projections and estimates and their underlying assumptions, statements
regarding plans, objectives, expectations or consequences of the transactions,
and statements about the future performance, operations, products and services
of the companies and their subsidiaries.
National Penn Bancshares and Nittany Financial's businesses and
operations, as well as their combined business and operations following the
completion of the transactions described in the release, are and will be subject
to a variety of risks, uncertainties and other factors. Consequently, their
actual results and experience may materially differ from those contained in any
forward-looking statements. Such risks, uncertainties and other factors that
could cause actual results and experience to differ from those projected
include, but are not limited to, the following: (1) ineffectiveness of their
business strategy due to changes in current or future market conditions, (2) the
effects of competition, and of changes in laws and regulations on competition,
including industry consolidation and development of competing financial products
and services, (3) interest rate movements, (4) deteriorating economic
conditions, (5) risks inherent in transactions of this sort, such as the failure
to achieve merger-related synergies, technology and integration issues, and
potential difficulties in
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establishing and maintaining operations in new markets, (6) volatility in the
securities markets, and (7) those risks, factors and uncertainties identified in
National Penn Bancshares' Current Report on Form 8-K filed with the United
States Securities and Exchange Commission ("SEC") on September 7, 2005. The
foregoing review of important factors should be read in conjunction with the
other cautionary statements that are included in National Penn Bancshares'
Annual Report on Form 10-K and Nittany Financial's Annual Report on Form 10-KSB
for their fiscal years ended December 31, 2004, as well as in the materials to
be filed with the SEC. See "Additional Information" below. Neither National Penn
Bancshares nor Nittany Financial makes any commitment to revise or update any
forward-looking statements in order to reflect events or circumstances occurring
or existing after the date any forward-looking statement is made. National Penn
Bancshares and Nittany Financial caution readers not to place undue reliance on
these statements.
ADDITIONAL INFORMATION:
National Penn Bancshares intends to file a registration statement on
Form S-4 in connection with the transaction, and Nittany Financial intends to
mail a proxy statement/prospectus to its shareholders in connection with the
transaction. Investors and security holders of Nittany Financial are urged to
read the proxy statement/prospectus when it becomes available, because it will
contain important information about National Penn Bancshares, Nittany Financial,
and the transaction. Investors and security holders may obtain a free copy of
the proxy statement/prospectus (when it is available) at the SEC's web site at
www.sec.gov. A free copy of the proxy statement/prospectus may also be obtained
from National Penn Bancshares or Nittany Financial. You may direct such a
request to either of the following persons:
Sandra L. Spayd David Z. Richards Jr.
Corporate Secretary President and CEO
National Penn Bancshares, Inc. Nittany Financial Corporation
Philadelphia and Reading Avenues 116 East College Ave
Boyertown, PA 19512 State College, PA 16801
(610) 369-6202 (814) 238-5724
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National Penn Bancshares, Nittany Financial and their respective
executive officers and directors may be deemed to be participants in the
solicitation of proxies from the shareholders of Nittany Financial in favor of
the transaction. Information regarding the interests of these officers and
directors in the transaction will be included in the proxy statement/prospectus.
In addition to the registration statement on Form S-4 to be filed by
National Penn Bancshares in connection with the transaction, and the proxy
statement/prospectus to be mailed to the shareholders of Nittany Financial in
connection with the transaction, each of National Penn Bancshares and Nittany
Financial file annual, quarterly and current reports, proxy and information
statements and other information with the SEC. Investors may read and copy any
of these reports, statements and other information at the SEC's public reference
rooms located at 100 F Street, N.E., Washington, D.C., 20549, or any of the
SEC's other public reference rooms located in New York and Chicago. Investors
should call the SEC at 1-800-SEC-0330 for further information on these public
reference rooms. The reports, statements and other information filed by National
Penn Bancshares and Nittany Financial with the SEC are also available for free
at the SEC's Web site at www.sec.gov. A free copy of these reports, statements
and other information may also be obtained from National Penn Bancshares or
Nittany Financial.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
DETAILS ON WEBCAST DISCUSSING THIS TRANSACTION
THE WEBCAST, SCHEDULED FOR WEDNESDAY, SEPTEMBER 7, 2005 AT 2 P.M. EDT
WILL BE AVAILABLE ONLINE AT NPBC'S WEB SITE AT WWW.NATIONALPENNBANCSHARES.COM.
YOU MAY ACCESS THE WEBCAST AT WWW.NATIONALPENNBANCSHARES.COM BY SELECTING
"INVESTOR RELATIONS" AT THE TOP OF THE HOME PAGE AND CLICKING THE "LIVE WEBCAST"
LINK. TO LISTEN TO THE LIVE PRESENTATION, PLEASE GO TO THE WEB SITE AT LEAST
FIFTEEN MINUTES EARLY TO DOWNLOAD AND INSTALL ANY NECESSARY AUDIO SOFTWARE.
PARTICIPANTS WHO LOG ON TO THE WEBCAST WILL HAVE THE OPPORTUNITY TO EMAIL
NATIONAL PENN BANCSHARES WITH THEIR QUESTIONS. WE WILL BEGIN ACCEPTING EMAILS AT
10 A.M. EDT ON SEPTEMBER 7 AND WILL CONTINUE TO ACCEPT EMAILS UNTIL THE
CONCLUSION OF THE PRESENTATION. NATIONAL PENN
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BANCSHARES MAY NOT HAVE ADEQUATE TIME TO ADDRESS EACH EMAIL RECEIVED. FOR THOSE
WHO CANNOT LISTEN TO THE LIVE PRESENTATION, A REPLAY WILL BE AVAILABLE ON OUR
WEB SITE FOR 30 DAYS.
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