CCFNB Bancorp in Bloomsburg, Pa., and Muncy Bank Financial in Muncy, Pa., decided to take a second chance at romance.
The $944 million-asset CCFNB and the $633 million-asset Muncy Bank were nearing a definitive agreement in April 2022 when talks ended over a disagreement on “operational matters,” according to a regulatory filing tied to their pending merger.
The companies would “rekindle” their talks a year later, reaching an agreement in April 2023 where CCFNB will buy Muncy Bank for $65.6 million. The plan is to name the combined company Muncy Columbia Financial; the bank will rebrand as Journey Bank.
CCFNB began to explore a possible merger in late 2021 when Lance Diehl, its president and CEO, expressed an interest in eventually scaling back from being a full-time CEO. An illiquid stock and volatile trading trends were also factors.
Diehl first met with Robert Glunk, his counterpart at Muncy Bank, in November 2021. The companies signed nondisclosure agreements and began conducting due diligence in late December.
CCFNB’s proposed exchange ratio of 0.88 shares of its stock for each Muncy Bank share was deemed too low by the Muncy Bank board. CCFNB increased the ratio to 0.92 shares on Jan. 21 – valuing Muncy Bank at $48.76 a share. Another slight increase a week later raised the deal’s value to $50 a share.
The companies agreed to a number of key terms in February 2022, including no-shop provisions, the breakup fee, and board composition. An exclusivity agreement was signed on Feb. 8, 2002 (it was extended several times).
A draft of the merger agreement was circulated in March 2022, though a disagreement that arose during an April 11 call to discuss final details led the companies to end talks for 11 months.
“It became apparent to both parties that, despite the ongoing diligence and preparations for a definitive agreement to be signed, and despite perceived benefits … [they] were not yet fully ready to engage in a potential merger transaction,” the filing said.
During their break, CCFNB had merger discussions with an unnamed party that went nowhere. CCFNB hired a new consultant and resumed its search for a successor for Diehl. The board decided during a February 2023 meeting to reconnect with Glunk at Muncy Bank.
Diehl called Glunk on Feb. 14, 2023, to request a tour of the new Muncy Bank branch in South Williamsport, Pa. Glunk asked if Diehl was going to “rekindle” their merger talks – Diehl said they would discuss it during the tour.
Each company’s board approved resuming merger discussions during early March meetings. A new nondisclosure agreement was signed and work on the merger agreement began.
A 0.9259 exchange ratio was proposed, valuing Muncy Bank at $40.92 a share. CCFNB also proposed giving Muncy Bank six of a planned 14 board seats.
Both boards unanimously approved the merger agreement during April 14 meetings. The deal, announced on April 17, is expected to close in the fourth quarter.
CCFNB said in a press release announcing the deal that it will achieve “efficient staff levels” through voluntary early retirement and voluntary severance package offerings. No mandatory layoffs are expected and no branches will close.
Glunk will become chief operating officer and the bank’s president and CEO. He will receive a $375,000 salary.
“We are delighted to have found a like-minded partner right in our backyard,” Diehl said in the release. “I have the utmost confidence in our ability to work together and to leveral each other’s strengths.”