Exhibit 99.1
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David G. Wallace, S.V.P. and
Chief Financial Officer
Office: (315) 445-7310
Fax: (315) 445-2997
SYRACUSE and MALONE, N.Y., Sept. 27 -- The Citizens National Bank of Malone
and Community Bank System, Inc. (NYSE: CBU) jointly announced that they have
signed a definitive agreement providing for CBU to acquire all the stock of
Citizens National Bank and for the merger of Citizens Bank into Community Bank,
N.A. Pursuant to the definitive agreement, stockholders of Citizens Bank will
receive 1.70 shares of registered common stock of Community Bank System, Inc.,
the holding company of Community Bank, N.A. CBU is a registered bank holding
company with $1.9 billion in assets, based in DeWitt, New York, and will issue
952,000 shares of common stock in the transaction, which will be recorded using
the purchase method of accounting. Pending approval by regulators and Citizens
shareholders and satisfaction of other contingencies, the transaction is
expected to close in the fourth quarter of 2000, at which time Paul M. Cantwell,
Jr., Chairman and President of Citizens, will become a member of the CBU Board
of Directors. Mr. Cantwell will also remain actively involved in Citizens'
market areas as a part-time consultant for a period of five years. Citizens Bank
has agreed not to solicit or pursue other transactions and to pay a termination
fee under certain circumstances.
Sanford A. Belden, President and Chief Executive Officer of Community Bank,
stated, "We are delighted to have reached agreement with Citizens, a community
bank which serves its customers in the same way we do. Citizens' five branches,
with their $100 million in deposits and $60 million in loans, will extend our
strong market presence in Northern New York, a region where we have been banking
very profitably since 1866. Their strong retail deposit base will strengthen our
funding sources and raise our deposit market share in Franklin County to 22%.
Their loyal customer base represents an opportunity to cross sell our more
extensive set of financial products and services and increase noninterest
revenues. The proximity of these branches to our main operations and management
center in Canton will enable us to operate the five branches very efficiently,
which, like many of our branches in the North Country, are first or second in
market share in their respective towns. Based on the proposed merger terms and
our due diligence to date, we expect the transaction to be slightly dilutive to
earnings per share in 2001."
Paul M. Cantwell, Jr., President of Citizens Bank, stated, "Our
stockholders, customers, employees and the communities we serve, all stand to
benefit from this combination of two well-respected banking companies. Our
stockholders will benefit by becoming shareholders in a New York Stock Exchange
listed company. All our customers will now have access to an extensive set of
banking services including Internet banking, secondary mortgage products,
indirect lending, floor plan lending, agricultural lending and cash management.
They will also be able to utilize financial services such as trust, insurance,
benefit plan administration and investment management. Community Bank, N.A.
shares our rich heritage of involvement in and dedicated service to the
communities where we live and do business. Citizens' Board of Directors will
continue to serve as members of an Advisory Council. Our employees will have
access to a much broader range of banking positions and opportunities through
Community Bank's network of 70 branches and operations/administrative centers."
The Citizens National Bank of Malone is an eighty-year-old commercial bank
with $118 million in assets as of year-end 1999. It has two offices and a
drive-up facility located in Malone, Franklin County, New York; two branches in
Brushton and Chateaugay in Franklin County; and one in Hermon in St. Lawrence
County. It operates four ATM's.
Community Bank System, Inc. (CBSI) is a registered bank holding company
based in DeWitt, New York. Its wholly-owned banking subsidiary, Community Bank,
N.A. (http://www.communitybankna.com), is the fifth largest commercial banking
franchise headquartered in Upstate New York, having 67 customer facilities and
50 ATM's stretching diagonally from Northern New York to the Southern Tier and
west to Lake Erie. Other subsidiaries within the CBSI family are Elias Asset
Management, Inc., an investment management firm with $700 million under
management, based in Williamsville, New York; Benefit Plans Administrative
Services, Inc. (BPA), a pension administration and consulting firm located in
Utica, New York, serving sponsors of defined benefit and defined contribution
plans; Community Investment Services, Inc. (CISI), a broker/dealer delivering
financial products from selected locations within Community Bank's branch system
and from offices in Lockport and Jamestown, NY; and Community Financial
Services, Inc. (CFSI), an insurance agency based in Olean, NY, specializing in
long-term health care and other selected products.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 with respect to the
anticipated effects of the merger. The following factors, among others, could
cause the actual results of the merger to differ materially from CBU's
expectations: the satisfaction of contingencies for closing the merger including
regulatory and shareholder approval; the successful integration of the Citizens
Bank and Community Bank business operations; competition; changes in economic
conditions, interest rates and financial markets; and changes in legislation or
regulatory requirements. CBU does not assume any duty to update forward-looking
statements.
Shareholders of Citizens Bank and other investors are urged to read the
proxy statement/prospectus that will be included in the registration statement
on Form S-4 that CBU will file with the SEC in connection with the merger
because it will contain important information about CBU, Citizens Bank, the
merger, the persons soliciting proxies in the merger, and their interests in the
merger and related matters. After it is filed with the SEC, the proxy
statement/prospectus will be available free of charge on the SEC's web site
(http://www.sec.gov). The proxy statement/prospectus and such other documents
may also be obtained from Community Bank System or from Citizens Bank by
directing such requests to Community Bank System, Inc., Attention: Donna J.
Drengel, 5790 Widewaters Parkway, DeWitt, New York 13214, tel: 315-445-7313; or
to Citizens Bank, Attention: Paul M. Cantwell, Jr., 6 Elm Street, Malone, New
York 12953, tel: 518-483-3400.
