New Windsor Bancorp, Inc. (NWID) to Acquire New Windsor Bancorp for ~$33.11/Share

ACNB Corporation (Nasdaq: ACNB) announced the execution of a Definitive Agreement whereby New Windsor Bancorp, Inc. (OTC: NWID) (“New Windsor”) will be merged with and into an ACNB acquisition subsidiary and, as soon as possible thereafter, New Windsor State Bank, New Windsor’s wholly-owned subsidiary bank, will merge with and into ACNB Bank. Two directors from New Windsor will join the boards of ACNB and ACNB Bank, respectively, and ACNB Bank will operate in the Maryland market as “New Windsor Bank, a division of ACNB Bank.”

Thomas A. Ritter, ACNB Corporation President and Chief Executive Officer, stated, “ACNB Corporation has an established tradition of enhancing long-term shareholder value. We view this transaction as part of that tradition. ACNB Corporation was built over the past 150 years by hard-working individuals coming together to effectively compete, grow, and create a better community bank.”

Frank “Rusty” Elsner, III, ACNB Chairman of the Board, added, “We are very pleased to partner with New Windsor Bancorp, Inc., an organization that shares a similar culture and business philosophy. This new partnership will enable ACNB Corporation to profitably grow in a desirable market that is adjacent to our current footprint. We are also pleased to invite two directors from the New Windsor Bancorp, Inc. and New Windsor State Bank boards of directors to the boards of directors of ACNB Corporation and ACNB Bank. We believe they will provide valuable insight into this new market as we look to successfully execute our strategic plan.” Based on the financial results as of September 30, 2016, the combined company would have pro forma total assets of $1.52 billion, total deposits of $1.24 billion, and loans of $1.13 billion.

Once the merger is complete, ACNB will have 29 retail banking offices in Pennsylvania and Maryland --- offering a full range of integrated financial services, including banking, trust, brokerage, mortgage and insurance, as well as full-service ATMs. ACNB indicated that since this is a market expansion transaction, many of New Windsor State Bank employees will be retained, specifically in the areas of lending, customer contact and retail.

At their election, New Windsor shareholders will receive 1.10 shares of ACNB common stock or $30.00 cash for each share of New Windsor common stock that they own as of the closing date. The transaction is subject to an election and allocation procedure that will result in 85% of the consideration being paid as ACNB common stock and 15% of the consideration being paid in cash. The 15% paid in cash will be paid on the basis of $30.00 per share.

Based on the market close on November 21, 2016, the transaction is valued at $33,294,000 or $33.11 per share. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes.

As of September 30, 2016, New Windsor had total assets of $311.1 million, total deposits of $272.9 million and total loans of $262.2 million. Speaking on behalf of New Windsor, Tom N. Rasmussen, President, said, “We are pleased to join forces with a company that has laid a clear course for the future, and one in which we believe meets the objectives of all our constituencies. New Windsor State Bank has been part of the Northern Maryland community for more than 80 years with origins that date back to 150 years. With ACNB Corporation as our partner, we believe that the resources, capital, expertise, experience, and common culture are there for us to profitably grow in this market for years to come. I look forward to remaining in Northern Maryland and serving as Market President of New Windsor Bank, a division of ACNB Bank.”

The transaction has been unanimously approved by the boards of directors of both companies. It is subject to New Windsor stockholder approval, regulatory approvals and other customary closing conditions. Currently, the transaction is expected to close late in the second quarter or early in the third quarter of 2017. Overall, ACNB believes this transaction will allow for profitable growth and an enhanced footprint while maintaining a prudent cost structure.

D. Arthur Seibel, Jr., New Windsor Chairman of the Board, speaking on behalf of the New Windsor board of directors, said, “We believe we have put together a transaction with ACNB Corporation that meets all of our objectives and principally delivers great value to our shareholders.”

James P. Helt, ACNB Bank President, stated, “It is not often that we can say we have found a community banking partner that shares many of the same successful attributes. This certainly will help make the transition a more efficient and seamless process for our customers and employees. We look forward to welcoming New Windsor to the ACNB family.”

Bybel Rutledge LLP is serving as legal counsel and Commonwealth Advisors, Inc. is serving as financial advisor to ACNB Corporation. BuckleySandler LLP is serving as legal counsel and Sandler O’Neill + Partners, LP is serving as financial advisor to New Windsor Bancorp, Inc.

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