Attached files
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8-K - UNION NATIONAL FINANCIAL CORP / PA | v181988_8k.htm |
EX-2.1 - UNION NATIONAL FINANCIAL CORP / PA | v181988_ex2-1.htm |
Exhibit
99.1
DONEGAL
FINANCIAL SERVICES CORPORATION AGREES TO
ACQUIRE
UNION NATIONAL FINANCIAL CORPORATION
Jeffrey
D. Miller, Senior Vice President &
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Mark
D. Gainer, Chairman, President
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Chief
Financial Officer
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&
Chief Executive Officer
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Donegal
Financial Services Corporation
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Union
National Financial Corporation
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Phone:
(717) 426-1931
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Phone:
(717) 519-8630
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Fax:
(717) 426-7009
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Fax: (717)
735-7121
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E-mail: jeffmiller@donegalgroup.com
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E-mail: mgainer@uncb.com
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For Immediate
Release
MARIETTA
and LANCASTER, Pennsylvania, April 20, 2010 (GLOBENEWSWIRE) – Donald H.
Nikolaus, President of Donegal Financial Services Corporation, and Mark D.
Gainer, Chairman, President and Chief Executive Officer of Union National
Financial Corporation, today jointly announced the execution of an agreement
pursuant to which Union National Financial Corporation (OTC Bulletin Board:
"UNNF.OB") and Donegal Financial Services Corporation would
merge. Under the agreement, Province Bank FSB, which Donegal
Financial Services Corporation owns, and Union National Community Bank, which
Union National Financial Corporation owns, would also merge. Donegal
Mutual Insurance Company and Donegal Group Inc. ("DGI") own Donegal Financial
Services Corporation.
The
combined bank would have total assets of approximately $600 million and would
have 13 branch locations in Lancaster County. Mr. Nikolaus would be
Chairman of the Board of the combined bank, and Mr. Gainer would be President
and Chief Executive Officer. The merger is subject to a number of
conditions, including approval of the merger by the holders of 80% of the
outstanding shares of Union National Financial Corporation and the approval of
various federal bank regulatory agencies. The companies expect to
complete the mergers in the third quarter of 2010.
As part
of the merger, each share of Union National Financial Corporation common stock,
other than shares held by Donegal Mutual and any dissenting shares, would
convert into the right to receive $5.05 in cash and 0.2134 of one share of the
publicly traded Class A common stock of DGI (NASDAQ Global Select:
"DGICA"). DGI Class A common stock pays a cash dividend at the
current annual rate of $.46 per share. Further information about DGI
is available in its SEC filings.
Donegal
Mutual is a member of the Donegal Insurance Group, which had approximately $1.1
billion in assets and approximately $505.4 million in surplus as of December 31,
2009. The Donegal Insurance Group conducts a property and casualty
insurance business in 18 Mid-Atlantic, Southern and Midwestern
States. The Donegal Insurance Group has an A.M. Best rating of A
(Excellent).
Province
Bank, which has three offices in Lancaster County, had approximately $100
million in assets at December 31, 2009. Donegal Mutual and DGI
founded Province Bank in 2000 to provide more diversified financial
services.
Union
National is a bank holding company whose principal subsidiary is Union National
Community Bank. Union National had approximately $490 million in
assets and stockholders' equity of approximately $31.3 million as of December
31, 2009. Union National Community Bank is a full service national
bank that provides a wide range of services to individuals and small to
medium-sized businesses in South Central Pennsylvania.
Mark D.
Gainer said, "All our stakeholders would benefit from an affiliation with
Donegal Financial Services Corporation. Union National has been
serving the financial needs of Lancaster County families and businesses for 157
years, and our combination would result in a bank that remains focused on
community banking and strong customer relationships, while being very
well-capitalized and positioned for growth in a very attractive
market."
Donald H.
Nikolaus said, "Our affiliation with Union National would enhance our ability to
provide a wide range of financial services products to our
customers. We look forward to working with Union National's
management to expand the historical franchise value and customer base Union
National has developed in our home community of Lancaster County."
Duane
Morris LLP served as legal counsel to Donegal Financial Services Corporation and
Keefe, Bruyette & Woods, Inc. served as financial
advisor. Kilpatrick Stockton LLP served as legal counsel to Union
National Financial Corporation, and Sandler O'Neill & Partners, L.P. served
as financial advisor.
Donegal
Group Inc. and Union National Financial Corporation will file a proxy
statement/prospectus and other relevant documents with the SEC in connection
with the mergers. SHAREHOLDERS OF UNION NATIONAL FINANCIAL
CORPORATION ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES
AVAILABLE 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.
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The proxy
statement/prospectus and other relevant materials, when they become available,
and any other documents filed by Donegal Group Inc. and Union National Financial
Corporation with the SEC, may be obtained free of charge at the SEC's web site
at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by Donegal Group Inc. by contacting Jeffrey D. Miller, Senior
Vice President & Chief Financial Officer, Donegal Group Inc., 1195 River
Road, Marietta, Pennsylvania, 17547, telephone: (717) 426-1931, and by Union
National Financial Corporation by contacting Mark D. Gainer, President and Chief
Executive Officer, Union National Financial Corporation, 570 Lausch Lane, Suite
300, Lancaster, Pennsylvania 17601, telephone: (717) 519-8630.
Union
National Financial Corporation and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from its shareholders
in connection with the proposed merger. Information concerning such
participants' ownership of Union National Financial Corporation stock will be
set forth in the proxy statement/prospectus relating to the merger when it
becomes available. This communication does not constitute an offer of
any securities for sale.
We
base all statements contained in this release that are not historic facts on our
current expectations. These statements are forward-looking in nature
(as defined in the Private Securities Litigation Reform Act of 1995) and involve
a number of risks and uncertainties. Actual results could vary
materially. Among the factors that could cause actual results to vary
materially include: our ability to maintain profitable operations,
the adequacy of our subsidiaries reserves for losses and loss adjustment
expenses, business and economic conditions in the areas in which we operate,
competition from various insurance and non-insurance businesses, terrorism, the
availability and cost of reinsurance, legal and judicial developments, changes
in regulatory requirements and other risks we describe from time to time in the
periodic reports we file with the Securities and Exchange
Commission. You should not place undue reliance on any such
forward-looking statements. We disclaim any obligation to update such
statements or to announce publicly the results of any revisions that we may make
to any forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such
statements.
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