0000950110-95-000647.txt : 19950915 0000950110-95-000647.hdr.sgml : 19950915 ACCESSION NUMBER: 0000950110-95-000647 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950119 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950913 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UJB FINANCIAL CORP /NJ/ CENTRAL INDEX KEY: 0000101320 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 221903313 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06451 FILM NUMBER: 95573472 BUSINESS ADDRESS: STREET 1: 301 CARNEGIE CENTER STREET 2: P O BOX 2066 CITY: PRINCETON STATE: NJ ZIP: 08543-2066 BUSINESS PHONE: 6099873200 FORMER COMPANY: FORMER CONFORMED NAME: UNITED JERSEY BANKS DATE OF NAME CHANGE: 19890815 8-K 1 CURRENT REPORT =============================================================================== 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) September 10, 1995 UJB Financial Corp. ------------------------------------------------------ (Exact name of registrant as specified in its charter) NEW JERSEY 1-6451 22-1903313 ------------------------ ----------- ------------------- (State or other juris- (Commission (IRS Employer diction of incorporation File No.) Identification No.) or organization) 301 Carnegie Center, P.O. Box 2066, Princeton, New Jersey 08543-2066 ---------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code (609) 987-3200 =============================================================================== Item 5. Other Information. Agreement and Plan of Merger On September 10, 1995, Registrant and The Summit Bancorporation ("Summit"), entered into an Agreement and Plan of Merger (the "Agreement") providing for, among other things, (i) the merger of Summit into the Registrant (the "Merger"); (ii) the exchange of each outstanding share of the Common Stock of Summit ("Summit Common") for 0.90 shares of the Common Stock of the Registrant ("UJB Common"), with cash being paid in lieu of issuing fractional shares of UJB Common; and (iii) the exchange of each outstanding share of the $25 stated value Adjustable Rate Cumulative Preferred Stock of Summit for one share of a newly created class of Preferred Stock of the surviving corporation in the Merger designated the $25 stated value Adjustable Rate Cumulative Preferred Stock; all upon the satisfaction of the terms and conditions set forth in the Agreement, including the receipt of approval from the shareholders of both the Registrant and Summit and the Board of Governors of the Federal Reserve System. No assurance can be given that the Merger will be consummated. In connection with the execution of the Agreement, Summit granted to the Registrant an option to purchase, under certain circumstances, up to 19.9% of the outstanding shares of Summit Common. Similarly, the Registrant granted Summit an option to purchase, under certain circumstances, up to 19.9% of the outstanding shares of UJB Common. The exercise prices of the options, respectively $26.75 and $36.625, were arrived at by mutual agreement of the parties. On September 11, 1995 a news release ("News Release") announcing the execution of the Agreement was issued by the Registrant. The News Release is attached hereto as Exhibit 99(b) and is incorporated herein by reference. On September 11, 1995, two separate meetings with respect to the Merger (the "Meetings") were held by the Registrant, one with investment analysts and one with print and broadcast media reporters. At the Meetings, certain financial and other information was presented. The information and materials presented at the meeting contained, among other things, information with respect to (i) deal economics (earnings-per-share accretions in 1997; expense savings; internal rate of return; one-time charges and estimated book value dilution); (ii) one-time restructuring charges expected to be taken by the Registrant and Summit in connection with the Merger; (iii) estimated expense reductions and (iv) estimated pro forma earnings for 1996 and illustrative earnings for 1997 based on the estimated 1996 earnings grown at 8.0%. Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibit No. Description ----------- ----------- (99)(a) Meeting materials illustrating: (i) deal economics (earnings-per-share accretions in 1997; expense savings; internal rate of return; one-time charges and estimated book value dilution); (ii) one-time restructuring charges expected to be taken by the Registrant and Summit in connection with the Merger; (iii)estimated expense reductions and (iv) estimated pro forma earnings for 1996 and illustrative earnings for 1997 based on the estimated 1996 earnings grown at 8.0%. (99)(b) News Release dated September 11, 1995. 2 SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized. Date: September 13, 1995 UJB FINANCIAL CORP. By: /s/ DENNIS A. WILLIAMS -------------------------- Dennis A. Williams Senior Vice President 3 EXHIBIT INDEX Ex. No. Description ------- ----------- (99)(a) Meeting materials illustrating: (i) deal economics (earnings-per-share accretions in 1997; expense savings; internal rate of return; one-time charges and estimated book value dilution); (ii) one-time restructuring charges expected to be taken by the Registrant and Summit in connection with the Merger; (iii) estimated expense reductions and (iv) estimated pro forma earnings for 1996 and illustrative earnings for 1997 based on the estimated 1996 earnings grown at 8.0%. (99)(b) News Release dated September 11, 1995. 4 EX-99.A 2 MEETING MATERIALS Deal Economics O 6% accretive to EPS in 1997 O Expense savings--$78 mm pre-tax annually, representing 48% of Summit's expense base and 11% of combined non-interest expense O 25 branch closures expected O No revenue enhancements necessary for EPS accretion O Internal rate of return--15%+ O One-time charges--$85 mm pre-tax, $54 mm after-tax O Estimated book value dilution of 12%*, earned back through strong EPS accretion * Includes merger related charges. UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO] 1 One-Time Restructuring Charges Real estate ................................. $37 MM Personnel ................................... 24 Operations, integration and other ........... 24 ------ Total one-time charges ................ $85 MM ====== After-tax impact ............................ $54 MM ====== Per share impact ............................ $0.58 UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO] 2 Estimated Expense Reductions O Target: $78 MM total reduction by 1997, equal to 48% of Summit's expense base and 11% of combined non-interest expense: 1996 1997 ------ ------ Personal ....................... $25 MM $49 MM Occupancy ...................... 4 8 Furniture & equipment .......... 2 4 Other cost savings ............. 8 17 ------ ------ Total pre-tax .............. $39 MM $78 MM ====== ====== Total after-tax ............ $23 MM $46 MM ====== ====== UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO] 3 Estimated Pro Forma Earnings (dollars in millions, except per share amounts) 1995(a) 1997(b) ----------------- ----------------- Total Per Share Total Per Share ----- --------- ----- --------- Net income to common-stand-alone: UJB Financial(c) ............. $196 $3.31 $214 $3.57 Summit(c) .................... 86 2.33 93 2.51 Adjustments: Expense Reductions ........... 23 46 Revenue Enhancements ......... 0 0 ---- ----- ---- ----- Pro Forma ................. $305 $3.30 $353 $3.79 ==== ===== ==== ===== Accretion (Dilution) ......... (0.4%) 6.0% Pro Forma Shares (MM) ........ 92.7 93.2 (a) 1996 earnings are estimated. Like all estimates of this type, there are many factors, such as changes in economic conditions that are beyond our control. These factors could effect actual results. As a result, there will be differences between such estimates and the actual results, which could be material. These estimates are necessarily speculative in nature and no assurance can be given that these estimates will be realized. Excludes one-time merger related charges. (b) 1997 earnings are not estimated. Such earnings are presented for illustrative purposes only and are based on 1996 earnings grown at 8.0%. (c) Does not include benefit of any proposed reduction in FDIC insurance fees. Estimated annualized benefits are $0.22 per share for UJB and $0.14 for Summit. UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO] 4 EX-99.B 3 NEWS RELEASE UJB Financial Corp. 301 Carnegie Center P.O. Box 2066 Princeton, NJ 08543-2066 609 987-3200 ------------------------- UJB News Release FINANCIAL LOGO For Release: Immediate Contact at Summmit Bancorporation Contact at UJB Financial Lori Friedman, VP C. Scott Rombach, SVP Public Relations Corporate Communications (201) 701-2638 (609) 987-3350 William S. Burns, SVP Kerry K. Calaiaro, SVP Investor Relations Investor Relations (201) 701-2581 (609) 987-3226 UJB Financial Corp. and Summit Bancorporation to Merge; New Combined Company will have Strong Position In NJ, PA PRINCETON, NEW JERSEY, September 11, 1995--UJB Financial Corp. (NYSE:UJB) and The Summit Bancorporation (NASDAQ:SUBN) today announced a definitive agreement to merge in a stock-for-stock exchange. Summit, headquartered in Chatham, NJ, is a one-bank holding company with assets of $5.5 billion. Under the terms of the merger agreement, which was approved yesterday by the boards of directors of both banks, Summit shareholders will receive 0.90 shares of UJB Financial common stock for each share of Summit common stock in a tax-free exchange. The merger will be accounted for as a pooling-of-interests. Based on the recent average closing price of UJB Financial common stock, the transaction has a value of $31.95 per share for a total of $1.2 billion. The new corporation, which will operate under the Summmit Bank Corp name, will have $22 billion in assets, deposits of $17.6 billion and shareholders equity of $1.7 billion. The merger will create New Jersey's second largest bank, with a top three market share position in 13 of the state's 21 counties. The new Summit will command the number one market share position in four of the nation's top 25 counties ranked by per capita income. The company will retain a strong presence in eastern Pennsylvania. T. Joseph Semrod, 58, UJB Financial's Chairman, will be Chairman and Chief Executive Officer of the new organization. Robert G. Cox, 54, President and CEO of Summit, will be President and will also join the board of directors. In addition, five current directors of the Summit organization will also join the board of the combined company. "This strategic partnership has compelling benefits for us and is an important part of our previous stated growth plan," Mr. Semrod said. ''It is a solid blend of two common business cultures and 1 philosophies and substantially enhances our market share in the ninth largest banking market in the nation. We are poised at the threshold of some very exciting business opportunities." Mr. Cox said "Summit has built an impressive retail franchise in New Jersey, while UJB Financial has scored successes by developing niche businesses, such as lending to health care professionals and hospitals and has a strong asset based lending activity. This transaction greatly enhances our business development strategies. We are forming a strategic partnership that rewards shareholders and offers customers a broader array of products and services." With 2.9 million households in New Jersey, the new Summmit has a relationship with 749,000 or 26 percent of these households. "The prompt integration of Summit and UJB Financial will generate cost savings that will offset the initial dilution to UJB Financial shareholders, and is expected to add to earnings per share in 1997. The transaction will enable the combined entity to achieve returns that neither company could realize on a stand alone basis." Mr. Semrod added. "We remain dedicated to building shareholder value." The integration and cost-reduction process, which will be headed by Mr. Cox and John G. Collins, UJB Financial Vice Chairman, will result in a projected pre-tax cost savings of $78 million as duplicative systems and capacity are eliminated and other merger synergies realized. In addition to realizing substantial cost savings, Mr. Semrod noted, "This acquisition offers UJB Financial solid opportunities for increased revenues from expanded product offerings and cross selling. The combined company will offer customers a broad array of products and services including private banking, discount brokerage, leasing, proprietary mutual funds, international banking, employee benefits, debit cards, automated teller machine transaction processing and retail life insurance." The transaction is expected to close in the first quarter of 1996, subject to regulatory and shareholder approvals. UJB Financial expects to incur a one-time restructuring charge of approximately $54 million after taxes. Merrill Lynch & Co. is acting as UJB Financial's advisor, and Keefe, Bruyette & Woods Inc. is Summit's. Both have provided fairness opinions in connection with the transaction. UJB Financial is a Princeton, NJ-based financial services company with $15.9 billion in assets. It operates 277 community banking offices and 277 ATMs through United Jersey Bank and New Jersey Savings Bank in New Jersey and First Valley Bank in Pennsylvania. The company provides financial services through its major lines of business including commercial banking, retail banking, mortgage banking and investment management. These core businesses and nine non-bank subsidiaries, offer a full array of financial services to individuals, businesses, non-profit organizations, government entities and other financial institutions. 2 Transaction Summary TERMS Name o Summit Bank Corp Structure o Pooling-of-interests o Tax-free exchange o Definitive agreement signed o Due diligence completed Terms o Fixed exchange ratio of 0.90 shares of UJB Financial common stock for each Summit share o No walkaways o Stock option agreements in place Timing o Subject to normal regulatory and shareholder approvals o Targeted to close first quarter 1996 PRICING Purchase price per share $31.95, based on UJB average of $35.50 Price to market 1.24x Price to stated book 2.37x Price to tangible book 2.42x Price to 1996E consensus 13.9x Summit shares outstanding 37.0 million* Fixed exchange ratio 0.90:1 New shares issued 33.3 million Indicated deal value $1.2 billion * Includes pending acquisition of Garden State Bancshares, Inc. 3