-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GZXlETbEJgnafIIPaOJE+ygZ2tO5O+9k9t3Zkzt/gp3cEL894KJXkbXFLRrnDsNu 16p7Y2Rz6GRwiSp7CVcSww== 0000912057-96-014629.txt : 19960716 0000912057-96-014629.hdr.sgml : 19960716 ACCESSION NUMBER: 0000912057-96-014629 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960628 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960715 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL CORP OF THE WEST CENTRAL INDEX KEY: 0001004740 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 770405791 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27384 FILM NUMBER: 96594884 BUSINESS ADDRESS: STREET 1: 1160 W OLIVE AVE STREET 2: STE A CITY: MERCED STATE: CA ZIP: 95348 BUSINESS PHONE: 2097252200 MAIL ADDRESS: STREET 1: 1160 W OLIVE AVENUE STREET 2: SUITE A CITY: MERCED STATE: CA ZIP: 95348 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 28, 1996 CAPITAL CORP OF THE WEST ------------------------------------------------------ (Exact name of registrant as specified in its charter) California 0-27384 77-0405791 - ---------------------- ------------------- ---------------------- State of Incorporation Commission File No. IRS Employer ID Number 1160 West Olive Avenue, Suite A, Merced, California 95348 ----------------------------------------------------------------------- Address, including zip code, of registrant's principal executive office (209) 725-2200 -------------------------------------------------- Registrant's telephone number, including area code ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On June 28, 1996, Capital Corp of the West acquired control of Town and Country Finance and Thrift Company, an industrial loan company headquartered in Turlock. California. See the attached press release for further information. Town and Country was previously held by approximately 80 individual shareholders. The consideration for the acquisition was approximately $5.6 million, of which $1.6 to $1.8 million is cash and the balance of which is common stock of Capital Corp of the West (approximately 267,000 to 282,000 shares at $14.05 per share). The exact amounts will depend on the results of a cash/stock election now being made by former Town and Country shareholders. The cash portion is funded in part from cash on hand and in part from a loan from an unaffiliated commercial bank. Town and Country will continue to operate its offices as a separate industrial loan company subsidiary of Capital Corp of the West. No prior material relationship existed between Capital Corp of the West and Town and Country or any of their respective directors and officers or their associates. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. The audited financial statements of Town and Country, including a balance sheet and income statement as of and for the years ended December 31, 1995 and 1994, are incorporated by reference from the financial statement pages of the Company's registration statement on Form S-4, Registration No. 333-03174, and the unaudited interim balance sheet and income statement as of and for the three-month period ended March 31, 1996, are included in this filing as a financial statement exhibit. (b) PRO FORMA FINANCIAL INFORMATION. The unaudited pro forma combined financial statements of Capital Corp of the West and Town and Country, including the pro forma combined balance sheet as of March 31, 1996, and the pro forma combined income statements for the year ended December 31, 1995 and the three-month period ended March 31, 1996, are included in this filing as a financial statement exhibit. (c) EXHIBITS. No. Description -- ----------- 2. Agreement and Plan of Acquisition dated as of March 22, 1996 between Capital Corp of the West and Town and Country (incorporated by reference from Annex A of the registration statement on Form S-4, Registration No. 333-03174, filed with the Commission on April 3, 1996) 24.1 Consent of KPMG Peat Marwick LLP 24.2 Consent of Atherton & Associates 2 99. Press release issued by the Company on July 1, 1996 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has caused this current report to be signed on its behalf by the undersigned duly authorized person. Date: July 15, 1996 Capital Corp of the West By: /s/ Thomas T. Hawker ----------------------------------- Its President and Chief Executive Officer 3 EXHIBIT INDEX No. Description Page Historical and pro forma combined financial statements 6 24.1 Consent of KPMG Peat Marwick LLP 12 24.2 Consent of Atherton & Associates 13 99. Press release issued by the Company on July 1, 1996 14 4 HISTORICAL AND PRO FORMA COMBINED FINANCIAL STATEMENTS The following unaudited pro forma condensed combined balance sheet at March 31, 1996, and pro forma condensed combined statements of income for the year ended December 31, 1995, and for the three-month period ended March 31, 1996, combine the historical balance sheets of Capital Corp and Town & Country as if the Merger had been been effective on March 31, 1996, and the income statements of Capital Corp and Town & Country as if the Merger had been effective on the beginning of each period presented. The pro forma information also gives effect to the cancellation of 168,156 shares of Town & Country common stock, no par value, outstanding at December 31, 1995, with an aggregate value (Exchange Amount) equal to $33.05 per share in exchange for Capital Corp common stock, no par value, and cash consideration. Share information was calculated using an aggregate Cash Component of $1,600,000 and an Exchange Ratio of 1.675 shares, which corresponds to a Capital Corp per share Market Value of $14.05. The pro forma adjustments are based upon available information and upon certain assumptions that management believes are reasonable under the circumstances. The Merger is accounted for under the purchase method of accounting, after giving effect to the pro forma adjustments described in the accompanying notes. Under this method of accounting, the purchase price has been allocated to the assets and liabilities of Town & Country based on preliminary estimates of fair values as of the date of acquisition. The actual fair values will be determined following consummation of the Merger. These unaudited pro forma combined financial statements should be read in conjunction with the historical consolidated financial statements and the related notes thereto of Capital Corp and the historical financial statements and related notes thereto of Town & Country. The unaudited pro forma statements of income are not necessarily indicative of operating results which would have been achieved had the Merger been consummated as of the beginning of the first period presented and should not be construed as representative of future operations. 5 CAPITAL CORP AND TOWN & COUNTRY UNAUDITED PRO FORMA COMBINED BALANCE SHEET MARCH 31, 1996 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
ASSETS PRO FORMA ADJUSTMENTS -------------------------------------- TOWN & PRO FORMA CAPITAL CORP COUNTRY DEBIT CREDIT COMBINED ------------ ------- ----- ------ -------- Assets Cash and due from banks $ 18,784 $ 9,662 $ 1,725(c) $ 1,725(a) $ 28,446 Total cash and cash equivalents 18,784 9,662 1,725 1,725 28,446 Securities Available for sale 44,199 -- 44,199 Total securities 44,199 -- 44,199 -------- -------- -------- Loans 140,658 17,432 185(b) 157,905 Allowance for loan losses 1,860 160 2,020 -------- -------- -------- Net loans 138,798 17,272 185 155,885 Premises and equipment, net 4,333 189 4,522 Interest receivable and other assets 8,398 272 8,670 Intangible assets -- -- 2,243(b) 2,243 -------- -------- -------- -------- Total assets 214,512 27,395 2,243 1,910 243,965 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Non-interest bearing demand 34,999 -- 34,999 Savings and interest-bearing demand 128,588 7,723 136,311 Time certificates, $100,000 and over 8,153 2,411 10,564 Other time 22,759 13,716 36,475 -------- -------- -------- Total deposits 194,499 23,850 218,349 Other borrowed funds 3,506 -- 1,725(c) 5,231 Interest payable and other liabilities 1,264 59 1,323 -------- -------- -------- Total liabilities 199,269 23,909 224,903 Preferred stock -- -- Common stock 10,105 2,700 2,700(b) 3,957(a) 14,062 Capital surplus -- -- Retained earnings 5,188 786 924(b) 6,898 Net unrealized gain (loss) on available for sale securities (50) -- (50) -------- Total shareholders' equity 15,243 3,486 3,624 3,957 19,062 -------- -------- -------- -------- -------- Total liabilities and shareholders' equity 214,512 27,395 3,624 3,957 243,965 Shares outstanding 1,335,831 168,156 281,676(f) 168,156(f) 1,617,507
6 CAPITAL CORP AND TOWN & COUNTRY UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME YEAR ENDED DECEMBER 31, 1995 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
ADJUSTMENTS --------------------------- TOWN & PRO FORMA CAPITAL CORP COUNTRY DEBIT CREDIT COMBINED ------------ ------- ----- ------ -------- Interest and fees on loans $12,969 $2,022 $ $ 63(d) $ 15,054 Interest on securities 2,546 -- 2,546 Other interest income 358 408 766 ---------- ---------- ---------- Total interest income 15,873 2,430 63 18,366 Interest on deposits 5,706 1,010 6,716 Interest on other borrowed funds 11 -- 146(c) 157 ---------- ---------- ---------- ---------- ---------- Total interest expense 5,717 1,010 146 6,873 Net interest income 10,156 1,420 146 63 11,493 Provision for loan losses 228 100 328 Net interest income after provision for loan losses 9,928 1,320 146 63 11,165 Service charges on deposit accts. 920 -- 920 Other operating income (2,144) 217 (1,927) ---------- ---------- ---------- Total noninterest income (1,224) 217 (1,007) Salaries and employee benefits 4,161 676 4,837 Occupancy and equipment expense 1,401 148 1,549 Other operating expense 2,584 375 2,959 Amortization of intangibles -- -- 145(d) -- 145 ---------- ---------- ---------- ---------- ---------- Total noninterest expense 8,146 1,199 145 9,490 Income before provision for taxes 558 338 291 63 668 Provision for taxes 223 107 91(e) 239 ---------- ---------- ---------- ---------- Net Income 335 231 291 130 429 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Income per share .25 1.38 .27 Weighted average common shares outstanding 1,333,923 168,156 281,676 168,156 1,615,599
7 CAPITAL CORP AND TOWN & COUNTRY UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME THREE-MONTH PERIOD ENDED MARCH 31, 1996 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
ADJUSTMENTS --------------------------- TOWN & PRO FORMA CAPITAL CORP COUNTRY DEBIT CREDIT COMBINED ------------ ------- ----- ------ -------- Interest and fees on loans $3,419 $529 $ $ 15(d) $3,963 Interest on securities 775 -- 775 Other interest income 56 124 180 ---------- ---------- ---------- Total interest income 4,250 653 15 4,918 Interest on deposits 1,500 289 1,789 Interest on other borrowed funds 12 -- 36(c) 48 ---------- ---------- ---------- ---------- Total interest expense 1,512 289 36 1,837 Net interest income 2,738 364 36 15 3,081 Provision for loan losses 160 13 173 Net interest income after provision for loan losses 2,578 351 36 15 2,908 Service charges on deposit accts. 474 -- 474 Other operating income 97 10 107 ---------- ---------- ---------- Total noninterest income 571 10 581 Salaries and employee benefits 1,186 167 1,353 Occupancy and equipment expense 389 64 453 Other operating expense 758 77 835 Amortization of intangibles -- -- 36(d) 36 ---------- ---------- ---------- ---------- Total noninterest expense 2,353 308 36 2,697 Income (loss) before provision for taxes 796 53 72 792 Provision (benefit) for taxes 295 22 23(e) 294 ---------- ---------- ---------- ---------- Net Income 501 31 72 38 499 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Income per share .38 .18 .31 Weighted average common shares outstanding 1,335,177 168,156 281,676 168,156 1,616,853
8 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (a) The merger is accounted for using the purchase method of accounting. The total purchase cost is allocated to the tangible and identifiable intangible assets and liabilities of Town & Country based on their respective fair values and the remainder will be allocated to goodwill, if any. The aggregate purchase price was determined as follows: Cash Component $1,600,000 Acquisition fees and expenses 125,000 (1) Total cash purchase price 1,725,000 Add: Issuance of 281,676 shares of Capital Corp Common Stock at a Market Value of $14.05 per share 3,957,000 ---------- $5,682,000 ---------- ---------- (1) Includes legal, accounting, printing and other direct expenses to be incurred with the Merger. (b) The following adjustments represent those necessary to allocate the purchase price paid to the fair market value of the net assets acquired by Capital Corp: Equity of Town and County: Common Stock $2,700,000 Retained Earnings 924,000 ---------- $3,624,000 Fair value adjustments: Loans receivable $ (185,000) Core Deposit Intangible 460,000 ---------- 275,000 Fair Value of net assets acquired 3,899,000 Purchase price 5,682,000 ---------- Excess of fair value of net assets acquired over purchase cost- $1,783,000 goodwill ---------- ---------- (c) A portion of the total cash purchase price of $1,725,000 will be financed by a loan from another financial institution. Estimated interest expense has been included on the pro forma combined statement of income. (d) When applicable, fair value adjustments are amortized against (accreted to) net income as follows: Amortization ------------ Total Life First Year Per Quarter ----- ---- ---------- ----------- Goodwill $1,783,000 18 $99,000 $25,000 Core deposit intangible 460,000 10 46,000 11,500 Fair value adjustment-loans (185,000) 3 (63,000) (15,000) Total $2,058,000 $84,000 $21,500 (e) Income tax expense has been adjusted in the pro forma computation to reflect historical tax expense rate of 40%. 9 (f) Pro forma combined per share date for net income has been calculated using Capital Corp's weighted average number of common shares outstanding increased by 281,676 shares to be issued using an Exchange Amount of $5,558,000, a Cash Component of $1,600,000 and exchange ratio of 1.675 shares, which corresponds to Capital Corp common stock per share Market Value of $14.05, and cancellation of 168,156 common stock shares of Town & Country. 10 EX-24.1 2 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 24.1 CONSENT OF KPMG PEAT MARWICK LLP Board of Directors Capital Corp of the West: We consent to the incorporation by reference in the Form 8-K dated July 15, 1996 of Capital Corp of the West (the Company) of our report dated January 26, 1996, with respect to the consolidated balance sheets of the Company as of December 31, 1995 and 1994 and the related consolidated statements of income, cash flows and shareholders' equity for each of the years in the three-year period ended December 31, 1995, which report appears in the registration statement (No. 333-03174) on Form S-4 of the Company dated May 13, 1996. /s/ KPMG Peat Marwick LLP Sacramento, California July 15, 1996 11 EX-24.2 3 CONSENT OF ATHERTON AND ASSOCIATES EXHIBIT 24.2 CONSENT OF ATHERTON AND ASSOCIATES The Board of Directors Town and Country Finance and Thrift Company We consent to the use of our reports included herein (or incorporated herein by reference). Modesto, California July 11, 1996 Very truly yours, Atherton & Associates /s/ Rodney K. Sakaguchi ----------------------------------- Rodney K. Sakaguchi 12 EX-99 4 PRESS RELEASE EXHIBIT 99 PRESS RELEASE Available for immediate publication July 1, 1996 Contact: Jolinda Thompson CAPITAL CORP OF THE WEST COMPLETES ACQUISITION OF TOWN & COUNTRY FINANCE AND THRIFT Capital Corp of the West (traded on NASDAQ as CCOW) announced today that it has completed the acquisition of Town & Country Finance and Thrift effective June 28, 1996. Total assets of the combined entity as of May 31, 1996 equaled $238 million. The transaction is valued at $5.6 million which represents approximately 158% of Town & Country book value as of May 31, 1996. The terms of the agreement provide the shareholders of Town & Country $33.05 for each share of Town & Country stock in a combination of cash and stock of Capital Corp as of June 28, 1996. The cash consideration will range from $1.6 million to $1.8 million based upon the election of the shareholders of Town & Country. The purchase will be accounted for under the purchase method of accounting and the stock portion of the deal will be a tax-free exchange for the shareholders of Town & Country. The shares issued in the transaction will be issued at a value of $14.05 per share. Town & Country will become a wholly owned subsidiary of Capital Corp and will continue to operate under its current president, Mr. Dale D. Pinkney and continue to offer its existing products and services. Town & Country is a licensed California thrift and loan company which specializes in consumer lending and contract financing. It currently has three offices in Turlock, Modesto and Visalia and will be opening its fourth office in Fresno in mid-July. As of May 31, 1996, Town & Country's total assets were $27 million and shareholder's equity totaled $3.5 million or $20.87 per share. Capital Corp of the West is a bank holding company which was established November 1, 1995. It is the parent company to: County Bank, Merced County's only locally owned and independently managed bank, and Capital West Group, a newly formed financial and management consulting subsidiary. Currently, the Bank has seven branch offices to serve the communities of Merced, Stanislaus and Tuolomne counties as well as a loan production office in Modesto. Total assets of Capital Corp were $211.8 million as of May 31, 1996 and shareholders equity totaled $15.5 million or $11.46 per share. For further information about the Company's financial performance, contact Tom Hawker, President and Chief Executive Officer, or Janey Boyce, Chief Financial Officer, at 209-725-2200. # # # 1160 West Olive Avenue - Suite A - Merced, California 95348 - (209) 725-2200 - Fax (209) 725-4550 13 -----END PRIVACY-ENHANCED MESSAGE-----