MARIETTA, Pa. and LANCASTER, Pa., March 22, 2011 (GLOBE NEWSWIRE) -- Donald H. Nikolaus, President of Donegal Financial Services Corporation ("DFSC"), and Mark D. Gainer, Chairman, President and Chief Executive Officer of Union National Financial Corporation ("UNNF") (OTCBB:UNNF), today jointly announced the receipt of the approval of the Office of Thrift Supervision ("OTS") to complete their pending merger. DFSC and UNNF have received all of the approvals or waivers required from the federal banking regulatory authorities; however, completion of the merger may not occur until the expiration of a 30-day comment period Pennsylvania law requires. The parties expect to complete the merger not later than the first week of May 2011.
Upon the completion of the merger, each share of UNNF common stock will become the right to receive 0.2134 share of Class A common stock of Donegal Group Inc. ("DGI") (Nasdaq:DGICA) and that amount of cash as equals $8.25 less the value of 0.2134 share of DGI Class A common stock, based on the average closing price of DGI Class A common stock for the five trading days immediately preceding the effective date of the merger, but in no event less than $5.05 per share in cash nor more than $5.90 per share in cash. In practical terms, UNNF shareholders will receive merger consideration with a value of approximately $8.25 per share of UNNF common stock provided DGI Class A common stock has an average closing price between $11.00 and $15.00 per share for the five trading days preceding the effective date of the merger.
Pursuant to the terms of the merger agreement, Province Bank FSB, which DFSC owns, and Union National Community Bank, which UNNF owns, will also merge. Upon completion of the merger, the merged bank will conduct its banking business through 13 branch offices in Lancaster County, Pennsylvania, under the name of "Union Community Bank."