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Filed by: Fulton Financial Corporation
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities
Exchange Act of 1934
Subject Company: Drovers Bancshares
Corporation (Commission File No. O-10958)
[LOGO OF FULTON FINANCIAL CORPORATION]
FOR IMMEDIATE RELEASE Contact: David C. Hostetter
Full text available on PR NEWSWIRE Office: (717) 291-2456
Fulton Financial Corporation to Acquire
Drovers Bancshares Corporation
(December 27) -- Lancaster, Pa. - Fulton Financial Corporation (NASDAQ:
FULT), the third largest bank holding company based in Pennsylvania, with assets
of $6.5 billion, has signed a definitive agreement to acquire Drovers Bancshares
Corporation (NASDAQ: DROV), based in York, Pennsylvania. Drovers Bancshares'
sole banking subsidiary is The Drovers & Mechanics Bank, also based in York.
Rufus A. Fulton, Jr., chairman, president and chief executive officer of
Fulton Financial Corporation, and A. Richard Pugh, chairman, president and chief
executive officer of Drovers Bancshares Corporation, made the merger
announcement jointly today.
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Page 2 . . . FULTON FINANCIAL TO ACQUIRE
DROVERS BANCSHARES CORP.
"We are very pleased and excited about this acquisition," said Fulton.
"Drovers is an organization we have always admired because of its consistent
history of growth, earnings and asset quality as well as its strong market share
in York County, which is contiguous to Lancaster County where our main office is
located. This association is consistent with our corporation's successful growth
strategy of acquiring well-managed banks in growing markets. It will provide
broader geographic coverage of the South Central Pennsylvania region, resulting
in increased location convenience for the customers of both institutions. We
expect to realize the operating efficiencies and enhanced revenue growth that
our shareholders have come to expect."
"This is a natural fit for both companies," continued Fulton. "We have
similar corporate cultures that focus on dedicated and talented staff members
creating banking value through strong personal customer relationships."
Pugh said that Drovers' affiliation with Fulton Financial "is a very
positive step for our customers, shareholders, associates and communities
because of our mutual belief that local bankers are best qualified to make the
right decisions in the markets where they live and work. In addition, our
respective product lines and ways of doing business are compatible. Fulton
Financial's proven successful business model, which places people and
relationships first, is one we regard highly".
Fulton Financial will acquire all issued and outstanding shares of
common stock of Drovers Bancshares. According to the merger agreement, each
share of Drovers common stock outstanding at the time of the merger will be
exchanged for 1.24 shares of Fulton Financial common stock. Based on the $22.94
per share closing price of Fulton Financial stock on December 26, the
transaction is valued at approximately $144.4 million. As of December 27,
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Page 3 . . . FULTON FINANCIAL TO ACQUIRE
DROVERS BANCSHARES CORP.
2000, Drovers Bancshares has approximately 5.1 million shares of common stock
outstanding. The acquisition is expected to be accounted for on a pooling of
interest basis.
The price represents a multiple of 2.7 times Drovers Bancshares book
value as of September 30, 2000. The price equates to 16.5 times projected 2001
earnings before expected operating efficiencies and revenue enhancements, and to
26.1 times trailing 12-month earnings which were adversely affected by a
significant loan loss provision related to a single large credit relationship.
The merger is not expected to be dilutive to earnings. The acquisition is
subject to approval by bank regulatory authorities and Drovers Bancshares
shareholders. It is expected to close during the third quarter of 2001. Fulton
Financial Corporation expects to incur merger related charges of approximately
$5.0 million. Drovers has granted Fulton Financial an option to purchase 19.9%
of its common stock under certain conditions.
Drovers Bancshares, with approximately $755 million in assets, is based
in York and operates 16 community banking offices in York County, one community
banking office in Frederick County, Maryland and a loan production office in
Cumberland County, Pennsylvania.
Fulton Financial Corporation operates 160 offices in Pennsylvania,
Maryland, Delaware and New Jersey through the following banking affiliates:
Fulton Bank, Lancaster, PA; Lebanon Valley Farmers Bank, Lebanon, PA; Swineford
National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank,
N.A., Danville, PA; Hagerstown Trust Company, Hagerstown, MD; Delaware National
Bank, Georgetown, DE; The Bank of Gloucester County, Woodbury, NJ; The Woodstown
National Bank and Trust Company, Woodstown, NJ; The Peoples Bank of Elkton,
Elkton, MD, and Skylands Community Bank, Hackettstown, NJ. The Corporation's
financial
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Page 4 . . . FULTON FINANCIAL TO ACQUIRE
DROVERS BANCSHARES CORP.
services affiliates include Fulton Financial Advisors, N.A., Lancaster, PA; and
Fulton Insurance Services Group Inc., Lancaster, PA.
In October 2000, Fulton Financial Corporation announced that it would
acquire Dearden, Maguire, Weaver and Barrett, Inc., an asset management company
based in West Conshohocken, Pennsylvania. This transaction is expected to close
in the first quarter of 2001.
Additional information on Fulton Financial Corporation is available on the
Internet at
www.fult.com.
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Safe Harbor Statement: Except for historical information contained herein, the
matters discussed in this release are forward-looking statements. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability to achieve anticipated merger related
operational efficiencies, the ability to enhance revenues through increased
market penetration, expanded lending capacity and product offerings and other
risks detailed from time to time in Fulton's and Drovers' SEC filings, including
forms 10-Q and 10-K (copies of which are available from Fulton without charge in
hard copy or online at www.sec.gov). Fulton and Drovers disclaim any intention
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or obligation to publicly update or revise any forward-looking statements,
whether as a result of events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Additional Information and Where to Find It: It is expected that Fulton will
file a Registration Statement on SEC Form S--4, that Fulton and Drovers will
file a Proxy Statement/Prospectus with the SEC in connection with the
transaction discussed herein, and that Drovers will mail a Proxy
Statement/Prospectus to stockholders of Drovers containing information about the
Acquisition. Investors and security holders are urged to read the Registration
Statement and the Proxy Statement/Prospectus carefully when they are available.
The Registration Statement and the Proxy Statement/Prospectus will contain
important information about Fulton, Drovers, the acquisition of Drovers by
Fulton, the persons soliciting proxies relating to the acquisition, their
interests in the acquisition and related matters. Investors and security holders
will be able to obtain free copies of these documents through the website
maintained by the SEC at http://www.sec.gov. Free copies of the Proxy
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Statement/Prospectus and these other documents may also be obtained from Fulton
by directing a request to William R. Colmery, Secretary at (717)291-2852 or from
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Drovers by directing a request to John D. Blecher, Secretary at (717)771-4241.
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In addition to the Registration Statement and the Proxy Statement/Prospectus,
Fulton and Drovers file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information at the SEC public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549 or at any of the SEC's other public
reference rooms in New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms.
Fulton's and Drover's filings with the SEC are also available to the
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Page 5 . . . FULTON FINANCIAL TO ACQUIRE
DROVERS BANCSHARES CORP.
public from commercial document-retrieval services and at the Web site
maintained by the SEC at http://www.sec.gov.
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Drovers and its officers and directors may be deemed to be participants in the
solicitation of proxies from Drovers stockholders with respect to the
transactions contemplated by the merger agreement. Information regarding
Drovers' officers and directors is included in Drovers' Proxy Statement for its
2000 Annual Meeting, filed with the SEC on March 28, 2000. Drovers' 2000 Proxy
Statement also discloses the interests of such officers and directors in the
event of an acquisition of Drovers (including, among other things, the
acceleration of certain benefits or rights upon a "change-in-control"). Drovers'
Quarterly Reports on Form 10-Q, filed with the SEC on May 11, 2000, August 14,
2000 and November 14, 2000, contain additional disclosures concerning agreements
with Drovers' officers. Drovers' 2000 Proxy Statement and Quarterly Reports on
Form 10-Q are each available free of charge at the SEC's web site at www.sec.gov
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and from Drovers upon request. In addition to the interests disclosed in
Drovers' 2000 Proxy Statement and Quarterly Reports on Form 10-Q, upon
completion of the merger, A. Richard Pugh, Chairman, President and Chief
Executive Officer of Drovers, will enter into a five year employment agreement
with Fulton, pursuant to which he will serve as Chairman, President and Chief
Executive Officer of the Drovers Bank Division of Fulton Bank. Additionally,
pursuant to the merger agreement, two Drovers directors will become directors of
Fulton and three Drovers directors will become Fulton Bank directors. As of date
of this news release, Drovers is not aware of any director or officer who
beneficially owns in excess of 5% of Drovers' common stock, except as disclosed
in its 2000 Proxy Statement.
2000 # # #
