Warwick Community Bancorp (NASDAQ:WSBI)
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Provident Bancorp, Inc. and Warwick Community Bancorp, Inc. Announce Agreement
to Merge
MONTEBELLO, N.Y., March 16 /PRNewswire-FirstCall/ -- Provident Bancorp, Inc.,
the holding company for Provident Bank ("Provident" Nasdaq: PBCP), and Warwick
Community Bancorp, Inc. ("Warwick" Nasdaq: WSBI) jointly announced today the
execution of a definitive agreement in which Provident, headquartered in
Montebello, New York will acquire Warwick in an exchange of cash and stock.
Warwick, headquartered in Warwick, New York operates Warwick Savings Bank, a New
York State-chartered savings bank with 7 offices in Orange and Putnam counties
and The Towne Center Bank, a New Jersey State-chartered commercial bank with 2
branches in Bergen County.
The transaction,approved by the directors of both companies, is valued at
approximately $153.4 million based on the March 15 closing price for Provident.
The total value at closing may rise or fall based on the per share price of
Provident common stock prior to closing. Under the terms of the agreement,
stockholders of Warwick will be entitled to receive either cash or shares of
Provident common stock, subject to election and allocation procedures which are
intended to ensure that in the aggregate, 50% of the shares of Warwick are
converted into the right to receive cash of $32.26 per share and that 50% are
converted into the right to receive 2.781 shares of Provident common stock.
Stock options will be cashed out for the in-the-money value of such options.
Provident will pay an aggregate of approximately $79.3 million in cash and issue
approximately 6.3 million shares of its common stock. The total per share
consideration is expected to be the sum of (a) 0.5 times $32.26 plus (b) 0.5
times 2.781 shares of Provident common stock times the price per share of
Provident common stock immediately prior to closing. At time of announcement
the total per share value is $32.61 based on the March 15, 2004 closing price of
$11.85 for Provident common stock.
"Provident is pleased to continue its strategic growth and expanded service to
the consumers and businesses of Orange County by adding Warwick to Provident
Bancorp. This merger along with our recent acquisition of Ellenville National
Bank will give Providentthe presence we envisioned in Orange County," said
George Strayton, Provident's President and Chief Executive Officer. "They have
an excellent branch network with great people who are committed to the same
philosophy of service and quality as Provident."
The combination will greatly enhance Provident's deposit market share in the
demographically attractive Hudson Valley region of New York. This transaction
will give Provident a No. 1 market share position in Orange County with
approximately 14.4% of total deposits to compliment its existing No. 3 market
share position in neighboring Rockland County, where it holds 13.0% of total
deposits. Deposit totals are as of June 30, 2003.
Warwick has total assets of $760 million, deposits of $488 million, loans of
$326 million, and $74 million of stockholders' equity at December 31, 2003.
Warwick presently operates banking offices serving markets in the New York
counties of Orange and Putnam as well as Bergen County New Jersey.
Fred G. Kowal, Chief Executive Officer of Warwick, stated, "Our decision to
merge with Provident was carefully considered in light of the interests of our
shareholders, customers, and employees and the communities that we serve. We
have focused on building shareholder value at Warwick and are pleased to be
joining an institution that has operated at such a high level of performance and
demonstrated a genuine commitment to customer service."
It is anticipated that the merger will close in the fourth quarter of 2004 and
is conditioned upon receiving requisite regulatory and shareholder approvals.
In connection with the merger, Warwick Savings Bank and Towne Center Bank will
merge into Provident Bank. Towne Center Bank will maintain its name while
operating as a distinct division of Provident Bank. The transaction is expected
to be accretive to earnings in the first year based on conservative cost savings
assumptions.
Prior to completion of the merger, Warwick may pay a special cash dividend to
its stockholders. The amount of this dividend will depend upon the performance
of an auto lease portfolio held by Warwick Savings Bank and cannot exceed
approximately $7.8 million (equating to approximately $1.74 per share). There
can be no assurance as to the amount or timing of the dividend, or whether any
dividend will be payable.
Provident will host a conference call for investors, analysts and other
interested parties on Tuesday, March 16, 2004 at 2:00 p.m. EST to discuss the
transaction. All interested parties are welcome to access the conference call
by dialing 1-(888) 273-9889, reference pass code 725002. Participants are asked
to call in a few minutes prior to the call in order to register for the event.
Provident has prepared an investor presentation to accompany the audio call.
This presentation will be available on Tuesday, March 16, 2004 after 12:00 noon,
Eastern Standard Time. The presentation can be accessed on Provident's website
at http://www.providentbanking.com/. A replay of the call will be available
until Friday, March 19, 2004 by calling 1-800-475-6701, pass code 725002.
Provident Bancorp, Inc. is the holding company of Provident Bank, a full service
community bank with 27 offices in Rockland, Orange, Ulster and Sullivan counties
in New York. Provident is headquartered in Montebello, New York. Provident
completed its "second step" conversion transaction and simultaneous acquisition
of E.N.B. Holding Company, Inc. on January 14, 2004.
This news release contains forward-looking statements. Such statements are
subject to certain factors that may cause the Company's results to vary from
those expected. These factors include changing economic and financial market
conditions, competition, ability to execute our business plan, items already
mentioned in this press release, and other factors described in our filings with
the Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect management's
judgment only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events and
circumstances that arise after the date hereof.
Provident Bancorp, Inc. will file a registration statement, a proxy
statement/prospectus and other relevant documents concerning the proposed
transaction with the Securities and Exchange Commission (the "SEC").
Stockholders are urged to read the registration statement and the proxy
statement/prospectus when it becomesavailable and any other relevant documents
filed with the SEC, as well as any amendments or supplements to those documents,
because they will contain important information. You will be able to obtain a
free copy of the joint proxy statement/prospectus,as well as other filings
containing information about Provident and Warwick, at the SEC's Internet site
(http://www.sec.gov/). Copies of the proxy statement/prospectus to be filed by
Provident Bancorp, Inc. also can be obtained, when available and without charge,
by directing a request to Provident Bancorp, Inc., Investor Relations, attn.
Roberta Lenett, 400 Rella Boulevard, Montebello, New York 10901, (845) 369-8082
or to Warwick Community Bancorp, Inc., attn. Barbara A. Rudy - Moore, Senior
Vice President, 18 Oakland Avenue, P.O. Box 591, Warwick, New York 10990-0591,
845-986-2206 ext. 2238, or by sending a request to .
Warwick Community Bancorp, Inc., and its directors and executive officers may be
deemed to be participants in the solicitationof proxies from the stockholders
of Warwick in connection with the acquisition. Information about the directors
and executive officers of Warwick and their ownership of Warwick common stock is
set forth in Warwick's most recent proxy statement as filed with the SEC, which
is available at the SEC's Internet site (http://www.sec.gov/) and at Warwick's
address in the preceding paragraph. Additional information regarding the
interests of these participants may be obtained by reading the joint proxy
statement/prospectus regarding the proposed transaction when it becomes
available.
DATASOURCE: Provident Bancorp, Inc.
CONTACT: George Strayton, President and Chief Executive Officer of
Provident Bancorp, Inc., +1-845-369-8040; or Fred G. Kowal, Chief Executive
Officer of Warwick Community Bancorp, Inc., +1-845-986-2206
Web site: http://www.providentbanking.com/