Magazine article American Banker

Another In-State Deal in Active Pa. Market

Magazine article American Banker

Another In-State Deal in Active Pa. Market

Article excerpt

Pennsylvania remains one of the busiest states for bank mergers and acquisitions, but unlike in other hotbeds such as Florida and California, the deals are mostly in-market.

That was the case again Tuesday, when Community Banks Inc. in Harrisburg emerged from a four-year break from M&A and announced a $326 million stock deal for the $1.1 billion-asset

PennRock Financial Services Corp. in Blue Ball.

The deal, by far the largest in Community Banks' history, would make it the eighth-largest banking company headquartered in the state, with about $3 billion of assets. Community Banks also would vault into the top 20 in market share, with about 1% of the state's deposits. (It currently ranks 23d, and PennRock's Blue Ball National Bank ranks 33d, according to Federal Deposit Insurance Corp. statistics.)

More importantly, the deal would give Community a stronger foothold in Pennsylvania's so-called Golden Triangle, a fast-growing three-county area near the Maryland border. Community, which already has 27 branches in York and Dauphin counties, would gain 10 branches in Lancaster County. It would also gain two branches in Chester County, one of the country's most affluent counties, with a median income roughly twice the national average.

Community's chief executive officer, Eddie L. Dunklebarger, spared few adjectives in describing what the deal would mean for his company.

"This is a transformational merger," he said in a conference call announcing the deal. "It is a landmark, pivotal event in our history."

In a phone interview later, Mr. Dunklebarger said his company had not sworn off deals since acquiring the $184 million-asset Glen Rock State Bank in March 2001; it was just waiting for the right opportunity to come along.

"We've been actively pursuing other partners, and PennRock was at the top of our list," he said. …

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