SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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Penn Laurel Financial Corp.
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(Name of Registrant as Specified In Its Charter)
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SUPPLEMENTAL SHAREHOLDER INFORMATION
Penn Laurel Financial Corp.
Clearfield Bank & Trust Company
We are writing to you once again concerning the proposed merger of CSB
Bank, Penn Laurel's subsidiary bank, into Clearfield Bank & Trust Company and
the future of Clearfield and CSB. In our earlier communications, we described
the litigation against Omega Financial Corporation and supplied you with a copy
of the final court order resulting from the lawsuit. Please note, if you have
not done so already, that the court ordered us to change the date of the
Clearfield shareholder's meeting to September 27, 1999. The Clearfield meeting
will be held at 1:00 p.m. at the Knights of Columbus, 512 Arnold Avenue,
Clearfield, Pennsylvania. The Penn Laurel meeting has also been changed to
September 27, 1999, and will be held at 9:00 a.m. at 434 State Street,
Curwensville, Pennsylvania.
The Boards of Clearfield and Penn Laurel understand that many of our
shareholders have questions concerning the economic terms of the merger of CSB
into Clearfield. We would like to address these questions.
The .97 Exchange Ratio Is Fair and is Not a Discount
The per share exchange ratio of .97 is not a discount. It is fair to
shareholders because:
o At the time of the merger of CSB into Clearfield, a Clearfield
shareholder will receive and hold shares of Penn Laurel -- a new
company that will be a combination of Clearfield, CSB and Penn Laurel.
Clearfield will comprise more than half of the combined entity.
o Clearfield shareholders will own approximately 61.03% of the stock of
the combined company after the merger, if all outstanding shares are
converted in the merger. Clearfield will only contribute 59.4% of the
equity to the combined company.
o The volume of trading in the stock of both Clearfield and Penn Laurel
is quite limited. Both Ryan, Beck & Co., Clearfield's financial
advisor, and Garland McPherson & Associates, Inc., Penn Laurel's
financial advisor, have advised us that because of the limited volume
of trades, our stock prices do not represent values that are reliable
enough to serve as the basis for setting an exchange ratio.
o Your percentage ownership of Clearfield or the current Penn Laurel
will determine how much of the combined company you will own. For
example, a shareholder who now owns 5% of Clearfield's stock will end
up with 3.05% of the combined company (5% of 61.03% = 3.05%). A
shareholder who now owns
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5% of the stock of the current Penn Laurel will end up with 1.95% of
the combined company (5% of 38.97% = 1.95%).
Stock in the Combined Company Should Increase in Value
o After the merger, you will receive stock in a new, combined company
that will be part Clearfield and part Penn Laurel.
o The Boards of Clearfield and Penn Laurel expect that because of cost
savings in combining the operations of the two companies, shareholder
value could increase significantly.
Combining Clearfield and CSB Bank Is Best for Shareholders
We continue to believe strongly that merging CSB into Clearfield and
maintaining Penn Laurel as the holding company for the combined banks remains
the best course of action for shareholders because:
o The combined company will offer its shareholders excellent short-term
and long-term possibilities for increasing shareholder value;
o After the proposed merger, Clearfield/CSB Bank will have the largest
share of the banking market in our service area. We believe that our
increased market share will allow us to offer better banking services
to our customers and result in greater value for our shareholders;
o At Clearfield and Penn Laurel, we know our community and we know our
customers. That is why we can employ our resources fully and grow our
business by making loans in our community. When we are combined, we
will be able to make more and larger loans to the families and growing
businesses in our community; and
o The combined company will offer superior banking services to its
customers, will provide increased value for its shareholders, and will
continue to be a major positive force in the economic growth of the
communities that it serves.
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The Boards of Directors of Clearfield and Penn Laurel are convinced that
the merger is in the best interests of all shareholders of Clearfield and Penn
Laurel and the communities they serve.
We enclose another proxy and a return envelope for your convenience. If you
have not voted on the merger, please do so now. If you have already voted "no,"
you can change your vote to "yes" by signing, dating and delivering the enclosed
proxy to us. If you have any questions, please contact, William E. Wood,
President and Chief Executive Officer of Clearfield at (814) 765-7551, Larry W.
Brubaker, President and Chief Executive Officer of Penn Laurel at (814) 236-2550
or Kissel-Blake at (800) 498-2628. Penn Laurel and Clearfield have engaged
Kissel-Blake to assist them in proxy solicitation for the merger.
