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LINKBANCORP, Inc. and GNB Financial Services, Inc. Announce Strategic Combination

December 10, 2020

HARRISBURG, Pa.--(BUSINESS WIRE)-- LINKBANCORP, Inc. (OTC Pink: LNKB) and GNB Financial Services, Inc., (OTC Pink: GNBF) today announced the execution of a definitive agreement to combine in a stock and cash transaction, creating a leading Pennsylvania community bank with assets in excess of $800 million and a network of nine offices throughout South Central Pennsylvania.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, GNB Financial Services will merge with and into LINKBANCORP, with LINKBANCORP surviving the merger. Shareholders of GNB Financial will have the opportunity to elect to receive $87.68 per share in cash or 7.3064 shares of LINKBANCORP common stock for each share they own, representing a total valuation of approximately $62.6 million based on the trading price of LINKBANCORP as of December 7, 2020. The agreement provides for proration procedures intended to ensure that, in the aggregate, at least 80 percent of the GNB Financial common shares outstanding will be exchanged for LINKBANCORP common stock. The transaction is expected to be a tax-free exchange to the extent shareholders of GNB Financial receive stock in exchange for their shares. LINKBANCORP shareholders will own approximately 52% and GNB Financial shareholders will own approximately 48% of the combined company.

“This is a true partnership, leveraging the strengths of each institution to create a community bank that is extremely well positioned for the future,” said LINKBANCORP Chief Executive Officer Andrew Samuel, who founded LINKBANCORP in 2018 and will serve as CEO of the combined company. “It’s a very attractive financial transaction that accelerates our growth plan and evidences our commitment to an entrepreneurial, values-driven community banking model that positively impacts all of our constituencies,” said Samuel.

The combined company’s board of directors will be evenly split between the two institutions, and will be chaired by Joseph C. Michetti, Jr., currently the Chairman of GNB Financial.

Wesley M. Weymers, Chief Executive Officer of GNB Financial, stated, “We have great respect for LINKBANK’s very experienced and talented team and what they have accomplished in a relatively short period. This partnership is an exciting opportunity to combine two very complementary institutions and achieve the scale and talent needed to compete and thrive in a rapidly evolving environment.”

The companies anticipate that the combination, uniting the rich and successful legacy of The Gratz Bank, which was founded in 1934, with the growth-oriented commercial bank model of LINKBANK, will result in significant earnings growth. Following the effective date of the combination, LINKBANCORP intends to pay a quarterly dividend consistent with the historical practice of GNB Financial, provided sufficient funds are legally available and that the surviving bank remains “well capitalized” in accordance with applicable regulatory guidelines.

Although the companies’ subsidiary banks, LINKBANK and The Gratz Bank, will merge immediately following the parent company merger, with The Gratz Bank as the surviving legal entity, both community-based institutions will continue operating under their established brands and their respective customers will receive the same high-level of services and products from the familiar faces at their existing locations. No branch locations are anticipated to close as a result of the combination.

Simultaneous with the agreement, Mr. Weymers entered into a new employment agreement pursuant to which he will serve as Executive Chairman of The Gratz Bank at the effective time of the combination, joining current GNB executives Jeremy Dobbin, Aaron Klinger and Kevin Laudenslager who will each assume senior management positions at the combined bank, and the existing LINKBANK executives who will maintain their current roles, to form a highly experienced leadership team, led by Mr. Samuel as Chief Executive Officer.

The parties expect to complete the transaction in mid-2021, after satisfaction of customary closing conditions, including required regulatory and shareholder approvals.

Cedar Hill Advisors LLC acted as financial advisor to LINKBANCORP, Inc. and Boenning & Scattergood, Inc. acted as financial advisor to GNB Financial Services, Inc. Hogan Lovells US LLP acted as legal counsel for LINKBANCORP, Inc. and Pillar + Aught acted as legal counsel for GNB Financial Services, Inc.

ABOUT LINKBANCORP, Inc.

LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, LINKBANK is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Central and Southeastern Pennsylvania. As of September 30, 2020, LINKBANK had total assets of approximately $368.6 million. LINKBANCORP, Inc. common stock is traded over the counter (OTC Pink) under the symbol “LNKB”.

ABOUT GNB FINANCIAL SERVICES, Inc.

GNB Financial Services, Inc. is the parent company of The Gratz Bank and GNB Investment Corp. Founded in 1934, The Gratz Bank is a full-service state chartered commercial bank, providing a variety of financial services to individual and commercial customers throughout Dauphin County, Pennsylvania, and other contiguous counties, through its main office located in Gratz, Pennsylvania, its branch offices in Valley View, Herndon, Pottsville, Minersville and Trevorton, Pennsylvania, and its loan production office in State College, Pennsylvania. As of September 30, 2020, GNB Financial services had total assets of approximately $437.1 million. GNB Financial Services common stock is traded over the counter (OTC Pink) under the symbol “GNBF”.

Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about LINKBANCORP (together with its bank subsidiary unless the context otherwise requires, “LINK”) involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding LINK’s future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to LINK, are forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” and other similar expressions are intended to identify these forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: (1) the businesses of LINK and GNB Financial Services, Inc. (“GNB Financial”) may not be combined successfully, or such combination may take longer to accomplish than expected; (2) the cost savings from the merger may not be fully realized or may take longer to realize than expected; (3) operating costs, customer loss and business disruption following the merger, including adverse effects on relationships with employees, may be greater than expected; (4) governmental approvals of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; (5) the stockholders of LINK or GNB Financial may fail to approve the merger; (6) changes to interest rates; (7) the ability to control costs and expenses; (8) general economic conditions; (9) adverse developments in borrower industries and, in particular, declines in real estate values; (10) LINK’s ability to maintain compliance with federal and state laws that regulate its business and capital levels; (11) LINK’s ability to raise capital as needed by its business; (12) the duration and scope of the coronavirus disease 2019 (“COVID-19”) pandemic and its impact on levels of consumer confidence; (13) actions governments, businesses and individuals take in response to the COVID-19 pandemic; (14) the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies and economic activity, and (15) the pace of recovery when the COVID-19 pandemic subsides. LINK does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. You are cautioned not to place undue reliance on these forward-looking statements.

Additional Information and Where to Find it

In connection with the proposed transaction, LINK expects to file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 that will include a joint proxy statement of LINK and GNB Financial that also constitutes a prospectus of LINK. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the joint proxy statement/prospectus (if and when it becomes available) at the SEC’s website at www.sec.gov. Copies of the documents filed by LINK with the SEC will be available free of charge on LINK’s website at ir.linkbancorp.com or by directing a request to LINKBANCORP, Inc., 3045 Market Street, Camp Hill, PA 17011, attention: Secretary.

Participants in Solicitation

LINK and GNB Financial and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and officers of LINK and GNB Financial and their ownership of LINK and GNB Financial common stock, and the interests of such potential participants will be included in the joint proxy statement/prospectus if and when it becomes available.

Andrew Samuel
LINKBANK
(717) 798-4230
asamuel@linkbank.com

Wesley M. Weymers
The Gratz Bank
(717) 508 4300
wweymers@gratzbank.com

Source: LINKBANCORP, Inc.

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