PSBI Psb Bancorp (MM)

PHILADELPHIA, March 26 /PRNewswire-FirstCall/ -- PSB Bancorp, Inc. (NASDAQ:PSBI), the holding company for First Penn Bank, and Conestoga Bancorp, Inc, the holding company for Conestoga Bank, jointly announced today that the sale of PSB Bancorp, Inc. ("PSB") to Conestoga Bancorp, Inc. ("Conestoga") is expected to close on April 2, 2007, subject to the Federal Reserve Bank of Philadelphia extending the expiration date of its prior approval of the transaction through that date. Based on the purchase price adjustment provisions in the merger agreement, PSB shareholders will receive a price per share of $16.72 in cash. Closing of the transaction has been delayed because, as part of Conestoga's ongoing due diligence, Conestoga identified certain issues that it believed entitled it to a reduction in the purchase price for PSB. PSB disputed Conestoga's assertions, and over the past two months the parties have attempted to address the issues raised by Conestoga. In order to resolve the issues raised by Conestoga, Vincent J. Fumo, Chairman of the Board of PSB, and Anthony DiSandro, President and CEO of PSB, have agreed to substantially reduce severance payments due to them at closing in order to effectively give Conestoga a price concession without reducing the transaction value to PSB shareholders. This accommodation will facilitate a closing of the acquisition at the transaction value approved by PSB's shareholder at the meeting held on January 12, 2007. Shortly after the closing, Registrar and Transfer Company will be mailing to each shareholder of PSB the procedures to be followed in order to receive the final merger consideration. PSB is a bank holding company headquartered in Philadelphia, Pennsylvania with thirteen branches. At December 31, 2006, PSB had consolidated assets, deposits and shareholders' equity of $577.3 million, $522.9 million and $47.1 million, respectively. Conestoga is a private bank holding company that owns all the capital stock of Conestoga Bank. Following completion of the acquisition of PSB, Conestoga Bank will have total assets in excess of $600 million and will operate 14 branches in the greater Philadelphia area. This press release contains "forward-looking statements" which are made in good faith by PSB Bancorp, Inc. and Conestoga Bancorp, Inc. pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to beliefs, expectations and intentions of PSB Bancorp, Inc. and Conestoga Bancorp, Inc. A number of factors may cause actual events to differ from those beliefs, expectations and intentions. In particular, completion of the transaction described in this press release is subject to a number of conditions, including regulatory approval, and the satisfaction of a number of other conditions enumerated in the merger agreement, and there can be no assurance that the transaction will be completed on the terms described above or at all. Neither PSB Bancorp, Inc. nor Conestoga Bancorp, Inc. undertakes to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of either of them. DATASOURCE: PSB Bancorp, Inc. CONTACT: Anthony DiSandro, President and Chief Executive Officer of PSB Bancorp, Inc., +1-215-979-7910; or Richard A. Elko, President and Chief Executive Officer of Conestoga Bancorp, Inc., +1-610-321-6902 Web site: http://www.firstpennbank.com/

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