ESL Federal Credit to acquire Generations Bank for $26.2M in cash

ESL Federal Credit Union, Generations Bank and its parent company Generations Bancorp NY (GBNY) announced that they have entered into a definitive purchase and assumption agreement whereby ESL Federal Credit Union will acquire substantially all of the assets and liabilities of Generations Bank in an all-cash transaction. As consideration for the P&A transaction, ESL Federal Credit Union will pay Generations $26.2M in cash and Generations Bank will retain its equity at the effective time of the P&A Transaction, less certain reductions and additions. The agreement was unanimously approved by the boards of directors of ESL Federal Credit Union and Generations. The P&A transaction is expected to close late in the second quarter or in the third quarter of 2025, subject to receiving all regulatory approvals, approval by Generations Bancorp’s shareholders and other customary closing conditions. Following the completion of the P&A transaction and after all of the respective obligations of Generations Bancorp and Generations Bank are settled or otherwise accounted for, Generations Bank will liquidate and Generation Bancorp will distribute its assets to its shareholders, likely in two separate payments as described herein. Generations Bancorp’s shareholders are currently estimated to receive an aggregate of between $18.00 and $20.00 in cash in exchange for each share of Generations Bancorp common stock owned. It is expected that the per share consideration will be distributed in two payments with the substantial majority of the total per share consideration expected to be distributed within six to nine months following the closing of the P&A Transaction, and the balance of the per share consideration to be distributed six to nine months after the first payment. Currently, Generations Bancorp has 2,241,801 outstanding shares of common stock. The per share consideration is subject to significant variation based on various factors including Generations Bank’s equity at closing; the amount of the corporate taxation including the use of any tax loss carryforwards to be used by Generations Bancorp; the regulatory treatment and costs associated with the liquidation accounts of Generations which would be expected to be paid out to eligible depositors of Generations Bank; expenses associated with the termination of Generations’ defined benefit plans; the amount of cash held by Generations Bancorp at the closing; costs related to the dissolution and the distribution of Generations Bancorp’s remaining assets to shareholders; and Generations Bancorp’s future operating results. Based on these factors, investors should not assume that the ultimate per share consideration to shareholders will be within the range set forth above. Pursuant to the liquidation accounts established by Generations at the time of its second-step conversion, it is expected that eligible depositors as of the date of the second-step conversion who continued to have eligible deposits as of each year end between the closing of the second-step conversion and through the year end prior to the closing of the P&A Transaction could have the right to receive a liquidation account payment.