Pennsylvania | 0-7617 | 23-1886144 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
o | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
Item 2.01 | Completion of Acquisition or Disposition of Assets |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description of Document | |
23.1 | Consent of BDO USA, LLP. | |
23.2 | Consent of Baker Tilly Virchow Krause, LLP. | |
99.1 | The unaudited balance sheet of Valley Green Bank as of September 30, 2014 and the unaudited statements of income, comprehensive income, stockholders' equity and cash flows of Valley Green Bank for the nine months ended September 30, 2014 and September 30, 2013, and the notes related thereto. | |
99.2 | The audited balance sheet of Valley Green Bank as of December 31, 2013 and the audited statements of income, comprehensive income, stockholders' equity and cash flows of Valley Green Bank for the year ended December 31, 2013, and the notes related thereto (incorporated by reference to Part I, pages 93 to 152 of Amendment No. 1 to the Registration Statement). | |
99.3 | Univest Corporation of Pennsylvania and Valley Green Bank unaudited pro forma condensed combined balance sheet as of September 30, 2014 and the unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2014, and for the year ended December 31, 2013, and the notes related thereto. |
Univest Corporation of Pennsylvania | ||
By: | /s/ Michael S. Keim | |
Name: | Michael S. Keim | |
Title: | Senior Executive Vice President, Chief Financial Officer |
Valley Green Bank | |||||||
Balance Sheets | |||||||
(in thousands, except share data) | |||||||
September 30, | December 31, | ||||||
2014 | 2013 | ||||||
(unaudited) | |||||||
Assets | |||||||
Cash and due from banks | $ | 3,938 | $ | 4,027 | |||
Federal funds sold | 34,116 | 12,604 | |||||
Cash and cash equivalents | 38,054 | 16,631 | |||||
Restricted stock, at cost | 1,168 | 610 | |||||
Investment securities available-for-sale | 12,678 | 13,052 | |||||
Loans receivable, net of allowance for loan losses of $2,561 at September 30, 2014 (unaudited) and $2,846 at December 31, 2013 | 364,289 | 320,541 | |||||
Premises and equipment, net | 3,057 | 3,278 | |||||
Other real estate owned | 75 | 545 | |||||
Accrued interest receivable | 1,106 | 1,023 | |||||
Deferred tax asset, net | 854 | 1,050 | |||||
Other assets | 353 | 572 | |||||
Total assets | $ | 421,634 | $ | 357,302 | |||
Liabilities and Stockholders’ Equity | |||||||
Liabilities | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 43,953 | $ | 42,217 | |||
Interest-bearing | 339,650 | 282,748 | |||||
Total deposits | 383,603 | 324,965 | |||||
Accrued interest payable | 488 | 349 | |||||
Taxes payable | 487 | 235 | |||||
Other liabilities | 829 | 510 | |||||
Total liabilities | 385,407 | 326,059 | |||||
Stockholders’ Equity | |||||||
Common stock, $1 par value; authorized 15,000,000 shares; issued and outstanding September 30, 2014 (unaudited) 2,798,703 shares and December 31, 2013 2,716,829 shares | 2,799 | 2,717 | |||||
Treasury stock, 1,250 shares | (1 | ) | — | ||||
Surplus | 24,712 | 23,988 | |||||
Retained earnings | 8,927 | 5,083 | |||||
Accumulated other comprehensive (loss) | (210 | ) | (545 | ) | |||
Total stockholders’ equity | 36,227 | 31,243 | |||||
Total liabilities and stockholders’ equity | $ | 421,634 | $ | 357,302 | |||
See accompanying notes to financial statements. |
Valley Green Bank | |||||||
Statements of Income | |||||||
(in thousands) (unaudited) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2014 | 2013 | ||||||
Interest income | |||||||
Loans, including fees | $ | 15,245 | $ | 12,744 | |||
Securities | 175 | 164 | |||||
Federal funds sold | 28 | 18 | |||||
Other | 1 | — | |||||
Total interest income | 15,449 | 12,926 | |||||
Interest expense | |||||||
Deposits | 1,552 | 1,346 | |||||
Federal funds purchased and Federal Home Loan Bank borrowings | — | 3 | |||||
Total interest expense | 1,552 | 1,349 | |||||
Net interest income | 13,897 | 11,577 | |||||
Provision for loan losses | 601 | 763 | |||||
Net interest income after provision for loan losses | 13,296 | 10,814 | |||||
Noninterest income | |||||||
Net realized gain on sales of loans | 16 | 40 | |||||
Net realized gain on sale or call of securities | — | 9 | |||||
Net realized gain on sale of Small Business Administration ("SBA") loans | — | 144 | |||||
Net realized (loss) gain on sale and impairment of other real estate owned | (47 | ) | 39 | ||||
Service fees | 306 | 250 | |||||
Other | 169 | 161 | |||||
Total noninterest income | 444 | 643 | |||||
Noninterest expense | |||||||
Compensation and employee benefits | 4,493 | 4,019 | |||||
Occupancy and equipment | 862 | 729 | |||||
Professional fees | 99 | 192 | |||||
Advertising and promotion | 145 | 127 | |||||
Data processing related operations | 545 | 630 | |||||
Taxes and insurance | 326 | 325 | |||||
Acquisition related costs | 477 | — | |||||
Other | 694 | 524 | |||||
Total noninterest expense | 7,641 | 6,546 | |||||
Income before income tax expense | 6,099 | 4,911 | |||||
Income tax expense | 2,255 | 1,686 | |||||
Net income | 3,844 | 3,225 | |||||
Preferred stock dividends | — | 37 | |||||
Net income available to common stockholders | $ | 3,844 | $ | 3,188 | |||
See accompanying notes to financial statements. |
Valley Green Bank | |||||||
Statements of Comprehensive Income | |||||||
(in thousands) (unaudited) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2014 | 2013 | ||||||
Net income | $ | 3,844 | $ | 3,225 | |||
Other comprehensive income/(loss) | |||||||
Unrealized gains (losses) on securities: | |||||||
Unrealized holding gains (losses) on securities available-for-sale, net of deferred income tax expense (benefit) for the nine months ended September 30, 2014 and 2013 of $(173) and $263, respectively | 335 | (516 | ) | ||||
Reclassification adjustment for gains included in net income, net of deferred income tax expense for the nine months ended September 30, 2014 and 2013 of $-0- and $3, respectively | — | 6 | |||||
Other comprehensive income/(loss) | 335 | (510 | ) | ||||
Total comprehensive income | $ | 4,179 | $ | 2,715 | |||
See accompanying notes to financial statements. |
Valley Green Bank | |||||||||||||||||||||||||||
Statements of Stockholders' Equity | |||||||||||||||||||||||||||
(in thousands) (unaudited) | |||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Total | |||||||||||||||||||||
Balance, December 31,2013 | $ | — | $ | 2,717 | $ | — | $ | 23,988 | $ | 5,083 | $ | (545 | ) | $ | 31,243 | ||||||||||||
Net income | — | — | — | — | 3,844 | — | 3,844 | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 335 | 335 | ||||||||||||||||||||
Purchase of treasury stock | — | — | (1 | ) | (31 | ) | — | — | (32 | ) | |||||||||||||||||
Options exercised | — | 82 | — | 648 | — | — | 730 | ||||||||||||||||||||
Stock-based compensation expense | — | — | — | 107 | — | — | 107 | ||||||||||||||||||||
Balance, September 30, 2014 | $ | — | $ | 2,799 | $ | (1 | ) | $ | 24,712 | $ | 8,927 | $ | (210 | ) | $ | 36,227 | |||||||||||
Balance, December 31,2012 | $ | 5,000 | $ | 1,994 | $ | — | $ | 18,054 | $ | 494 | $ | 26 | $ | 25,568 | |||||||||||||
Net income | — | — | — | — | 3,225 | — | 3,225 | ||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (510 | ) | (510 | ) | ||||||||||||||||||
Redemption of preferred stock | (5,000 | ) | — | — | — | — | — | (5,000 | ) | ||||||||||||||||||
Warrants exercised | — | 355 | — | 2,667 | — | — | 3,022 | ||||||||||||||||||||
Dividends of preferred stock | — | — | — | — | (37 | ) | — | (37 | ) | ||||||||||||||||||
Options exercised | — | 368 | — | 3,123 | — | — | 3,491 | ||||||||||||||||||||
Stock-based compensation expense | — | — | 111 | — | — | 111 | |||||||||||||||||||||
Balance, September 30, 2013 | $ | — | $ | 2,717 | $ | — | $ | 23,955 | $ | 3,682 | $ | (484 | ) | $ | 29,870 | ||||||||||||
See accompanying notes to financial statements. |
Valley Green Bank | |||||||
Statements of Cash Flows | |||||||
(in thousands) (unaudited) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 3,844 | $ | 3,225 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 601 | 763 | |||||
Depreciation and amortization | 257 | 179 | |||||
Stock-based compensation expense | 107 | 111 | |||||
Increase in net loan origination fees and costs | 41 | 112 | |||||
Net amortization of securities premiums and discounts | 1 | 89 | |||||
Deferred income tax expense (benefit) | 23 | (389 | ) | ||||
Proceeds from sales of loans | 1,888 | 5,305 | |||||
Loans originated for sale | (1,872 | ) | (5,435 | ) | |||
Net gain on sales of loans | (16 | ) | (40 | ) | |||
Loss (gain) on sale of other real estate owned | 38 | (39 | ) | ||||
Impairment of other real estate owned | 9 | — | |||||
Net gain on sale of securities | — | (9 | ) | ||||
Proceeds from sale of SBA loans | — | 1,296 | |||||
Net gain on sale of SBA loans | — | (144 | ) | ||||
SBA loan origination | — | (1,728 | ) | ||||
Increase in accrued interest receivable | (83 | ) | (111 | ) | |||
Decrease (increase) in other assets | 213 | (136 | ) | ||||
Increase in taxes payable | 252 | 140 | |||||
Increase (decrease) in accrued interest payable | 139 | (9 | ) | ||||
Increase in other liabilities | 319 | 660 | |||||
Net cash provided by operating activities | 5,761 | 3,840 | |||||
Cash flows from investing activities: | |||||||
Activity in available-for-sale securities: | |||||||
Purchases | — | (15,921 | ) | ||||
Maturities, calls, sales and principal repayments | 881 | 22,535 | |||||
Loan origination and principal collections, net | (44,390 | ) | (57,343 | ) | |||
Acquisition of restricted bank stocks | (558 | ) | (125 | ) | |||
Proceeds from sale of other real estate owned | 423 | 360 | |||||
Purchases of bank premises and equipment | (30 | ) | (1,690 | ) | |||
Net cash used in investing activities | (43,674 | ) | (52,184 | ) | |||
Cash flows from financing activities: | |||||||
Net increase in deposits | 58,638 | 45,857 | |||||
Redemption of preferred stock | — | (5,000 | ) | ||||
Proceeds from the exercise of warrants | — | 3,022 | |||||
Proceeds from the exercise of stock options | 730 | 3,491 | |||||
Repurchase of treasury stock | (32 | ) | — | ||||
Cash dividends paid on preferred stock | — | (37 | ) | ||||
Net cash provided by financing activities | 59,336 | 47,333 | |||||
Net increase (decrease) in cash and cash equivalents | 21,423 | (1,011 | ) | ||||
Cash and cash equivalents, beginning | 16,631 | 24,837 | |||||
Cash and cash equivalents, ending | $ | 38,054 | $ | 23,826 | |||
Supplementary cash flows information: | |||||||
Interest paid | $ | 1,413 | $ | 1,358 | |||
Income taxes paid | $ | 1,896 | $ | 1,439 | |||
Non-cash transfer of loans to other real estate owned | $ | — | $ | 876 | |||
See accompanying notes to financial statements. |
1. | Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices. |
2. | National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans. |
3. | Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications. |
September 30, 2014 (unaudited) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
U.S. Government corporations and agency securities | $ | 12,996 | $ | — | $ | (318 | ) | $ | 12,678 | ||||||
December 31, 2013 | |||||||||||||||
U.S. Government corporations and agency securities | $ | 13,878 | $ | — | $ | (826 | ) | $ | 13,052 |
Available-for-Sale | |||||||
September 30, 2014 (unaudited) | Amortized Cost | Fair Value | |||||
Due in five to ten years | $ | 12,996 | $ | 12,678 | |||
December 31, 2013 | |||||||
Due in five to ten years | $ | 13,878 | $ | 13,052 |
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||
September 30, 2014 (unaudited) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
U.S. Government corporations and agency securities | $ | — | $ | — | $ | 12,678 | $ | (318 | ) | $ | 12,678 | $ | (318 | ) | |||||||||
December 31, 2013 | |||||||||||||||||||||||
U.S. Government corporations and agency securities | $ | 13,052 | $ | (826 | ) | $ | — | $ | — | $ | 13,052 | $ | (826 | ) |
September 30, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
Commercial | $ | 173,183 | $ | 150,259 | |||
Commercial real estate | 131,809 | 116,504 | |||||
Commercial construction | 44,676 | 40,461 | |||||
Residential real estate | 4,287 | 4,634 | |||||
Home equity | 13,175 | 11,814 | |||||
Consumer | 593 | 547 | |||||
Total Loans | 367,723 | 324,219 | |||||
Unearned net loan origination fees and costs | (873 | ) | (832 | ) | |||
Allowance for loan losses | (2,561 | ) | (2,846 | ) | |||
Net Loans | $ | 364,289 | $ | 320,541 |
Allowance for Loan Losses | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2014 (unaudited) | Beginning Balance | Charge-offs | Recoveries | Provisions | Ending Balance | Ending Balance: Individually Evaluated for Impairment | Ending Balance: Collectively Evaluated for Impairment | |||||||||||||||||||||
Commercial | $ | 1,070 | $ | 883 | $ | 2 | $ | 1,039 | $ | 1,228 | $ | 38 | $ | 1,190 | ||||||||||||||
Commercial real estate | 1,175 | 5 | — | (186 | ) | 984 | — | 984 | ||||||||||||||||||||
Commercial construction | 498 | — | — | (193 | ) | 305 | — | 305 | ||||||||||||||||||||
Residential real estate | 9 | — | — | — | 9 | — | 9 | |||||||||||||||||||||
Home equity | 91 | — | — | (58 | ) | 33 | — | 33 | ||||||||||||||||||||
Consumer | 3 | — | — | (1 | ) | 2 | — | 2 | ||||||||||||||||||||
$ | 2,846 | $ | 888 | $ | 2 | $ | 601 | $ | 2,561 | $ | 38 | $ | 2,523 |
Allowance for Loan Losses | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013 (unaudited) | Beginning Balance | Charge-offs | Recoveries | Provisions | Ending Balance | Ending Balance: Individually Evaluated for Impairment | Ending Balance: Collectively Evaluated for Impairment | |||||||||||||||||||||
Commercial | $ | 920 | $ | 146 | $ | 3 | $ | 306 | $ | 1,083 | $ | 57 | $ | 1,026 | ||||||||||||||
Commercial real estate | 1,075 | — | — | 141 | 1,216 | — | 1,216 | |||||||||||||||||||||
Commercial construction | 238 | — | — | 313 | 551 | — | 551 | |||||||||||||||||||||
Residential real estate | 14 | — | — | 5 | 19 | — | 19 | |||||||||||||||||||||
Home equity | 62 | — | — | 3 | 65 | — | 65 | |||||||||||||||||||||
Consumer | 11 | — | — | (5 | ) | 6 | — | 6 | ||||||||||||||||||||
$ | 2,320 | $ | 146 | $ | 3 | $ | 763 | $ | 2,940 | $ | 57 | $ | 2,883 |
Loans Receivable | ||||||||||||
September 30, 2014 (unaudited) | Ending Balance | Ending Balance: Individually Evaluated for Impairment | Ending Balance: Collectively Evaluated for Impairment | |||||||||
Commercial | $ | 173,183 | $ | 1,383 | $ | 171,800 | ||||||
Commercial real estate | 131,809 | — | 131,809 | |||||||||
Commercial construction | 44,676 | — | 44,676 | |||||||||
Residential real estate | 4,287 | — | 4,287 | |||||||||
Home equity | 13,175 | — | 13,175 | |||||||||
Consumer | 593 | 17 | 576 | |||||||||
$ | 367,723 | $ | 1,400 | $ | 366,323 |
Allowance for Loan Losses | ||||||||||||||||||||||||||||
Year Ended December 31, 2013 | Beginning Balance | Charge-offs | Recoveries | Provisions | Ending Balance | Ending Balance: Individually Evaluated for Impairment | Ending Balance: Collectively Evaluated for Impairment | |||||||||||||||||||||
Commercial | $ | 920 | $ | 178 | $ | 3 | $ | 325 | $ | 1,070 | $ | 45 | $ | 1,025 | ||||||||||||||
Commercial real estate | 1,075 | — | — | 100 | 1,175 | — | 1,175 | |||||||||||||||||||||
Commercial construction | 238 | — | — | 260 | 498 | — | 498 | |||||||||||||||||||||
Residential real estate | 14 | — | — | (5 | ) | 9 | — | 9 | ||||||||||||||||||||
Home equity | 62 | — | — | 29 | 91 | — | 91 | |||||||||||||||||||||
Consumer | 11 | — | — | (8 | ) | 3 | — | 3 | ||||||||||||||||||||
$ | 2,320 | $ | 178 | $ | 3 | $ | 701 | $ | 2,846 | $ | 45 | $ | 2,801 |
Loans Receivable | ||||||||||||
December 31, 2013 | Ending Balance | Ending Balance: Individually Evaluated for Impairment | Ending Balance: Collectively Evaluated for Impairment | |||||||||
Commercial | $ | 150,259 | $ | 567 | $ | 149,692 | ||||||
Commercial real estate | 116,504 | — | 116,504 | |||||||||
Commercial construction | 40,461 | — | 40,461 | |||||||||
Residential real estate | 4,634 | — | 4,634 | |||||||||
Home equity | 11,814 | — | 11,814 | |||||||||
Consumer | 547 | — | 547 | |||||||||
$ | 324,219 | $ | 567 | $ | 323,652 |
September 30, 2014 (unaudited) | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||
With no related allowance recorded: | |||||||||||
Commercial | $ | 1,053 | $ | 1,053 | $ | — | |||||
Consumer | 17 | 17 | — | ||||||||
With an allowance recorded: | |||||||||||
Commercial | 330 | 330 | 38 | ||||||||
Total: | |||||||||||
Commercial | $ | 1,383 | $ | 1,383 | $ | 38 | |||||
Consumer | 17 | 17 | — | ||||||||
$ | 1,400 | $ | 1,400 | $ | 38 |
December 31, 2013 | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||
With no related allowance recorded: | |||||||||||
Commercial | $ | 382 | $ | 382 | $ | — | |||||
With an allowance recorded: | |||||||||||
Commercial | 185 | 185 | 45 | ||||||||
Total: | |||||||||||
Commercial | $ | 567 | $ | 567 | $ | 45 |
September 30, 2014 | December 31, 2014 | ||||||
(unaudited) | |||||||
Commercial | $ | 760 | $ | 378 | |||
Consumer | 17 | — | |||||
$ | 777 | $ | 378 |
2014 (unaudited) | 2013 (unaudited) | ||||||||||||||
Nine months ended September 30, | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||
With no related allowance recorded: | |||||||||||||||
Commercial | $ | 493 | $ | 16 | $ | 387 | $ | — | |||||||
Consumer | 17 | — | — | — | |||||||||||
With an allowance recorded: | |||||||||||||||
Commercial | 332 | — | 190 | — | |||||||||||
Total: | |||||||||||||||
Commercial | $ | 825 | $ | 16 | $ | 577 | $ | — | |||||||
Consumer | 17 | — | — | — | |||||||||||
$ | 842 | $ | 16 | $ | 577 | $ | — |
September 30, 2014 (unaudited) | Pass | Special Mention | Substandard | Total | |||||||||||
Commercial | $ | 170,215 | $ | 1,645 | $ | 1,323 | $ | 173,183 | |||||||
Commercial real estate | 131,129 | 680 | — | 131,809 | |||||||||||
Commercial construction | 44,676 | — | — | 44,676 | |||||||||||
Residential real estate | 4,287 | — | — | 4,287 | |||||||||||
Home equity | 13,175 | — | — | 13,175 | |||||||||||
Consumer | 576 | — | 17 | 593 | |||||||||||
$ | 364,058 | $ | 2,325 | $ | 1,340 | $ | 367,723 |
December 31, 2013 | Pass | Special Mention | Substandard | Total | |||||||||||
Commercial | $ | 148,167 | $ | 1,525 | $ | 567 | $ | 150,259 | |||||||
Commercial real estate | 115,315 | 1,189 | — | 116,504 | |||||||||||
Commercial construction | 40,461 | — | — | 40,461 | |||||||||||
Residential real estate | 4,634 | — | — | 4,634 | |||||||||||
Home equity | 11,814 | — | — | 11,814 | |||||||||||
Consumer | 547 | — | — | 547 | |||||||||||
$ | 320,938 | $ | 2,714 | $ | 567 | $ | 324,219 |
September 30, 2014 (unaudited) | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Current | Total Loans Receivables | Loans Receivable >90 Days and Accruing | ||||||||||||||||||||
Commercial | $ | 2,363 | $ | — | $ | 923 | $ | 3,286 | $ | 169,897 | $ | 173,183 | $ | 923 | |||||||||||||
Commercial real estate | 816 | — | — | 816 | 130,993 | 131,809 | — | ||||||||||||||||||||
Commercial construction | — | — | — | — | 44,676 | 44,676 | — | ||||||||||||||||||||
Residential real estate | — | — | — | — | 4,287 | 4,287 | — | ||||||||||||||||||||
Home equity | — | — | — | — | 13,175 | 13,175 | — | ||||||||||||||||||||
Consumer | — | — | — | — | 593 | 593 | — | ||||||||||||||||||||
$ | 3,179 | $ | — | $ | 923 | $ | 4,102 | $ | 363,621 | $ | 367,723 | $ | 923 |
December 31, 2013 | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Current | Total Loans Receivables | Loans Receivable >90 Days and Accruing | ||||||||||||||||||||
Commercial | $ | 42 | $ | 505 | $ | 378 | $ | 925 | $ | 149,334 | $ | 150,259 | $ | — | |||||||||||||
Commercial real estate | — | — | — | — | 116,504 | 116,504 | — | ||||||||||||||||||||
Commercial construction | — | — | — | — | 40,461 | 40,461 | — | ||||||||||||||||||||
Residential real estate | — | — | — | — | 4,634 | 4,634 | — | ||||||||||||||||||||
Home equity | — | — | — | — | 11,814 | 11,814 | — | ||||||||||||||||||||
Consumer | — | — | — | — | 547 | 547 | — | ||||||||||||||||||||
$ | 42 | $ | 505 | $ | 378 | $ | 925 | $ | 323,294 | $ | 324,219 | $ | — |
September 30, 2014 (unaudited) | Number of Contracts | Pre-Modification Outstanding Recorded Investments | Post-Modification Outstanding Recorded Investments | |||||||
Troubled debt restructurings: | 1 | $ | 435 | $ | 435 | |||||
Commercial (modification of interest rate and term) |
September 30, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
Demand, noninterest bearing | $ | 43,953 | $ | 42,217 | |||
Demand, interest bearing | 17,758 | 13,354 | |||||
Money market accounts | 122,674 | 138,107 | |||||
Statement savings | 4,678 | 4,521 | |||||
Time, $100,000 and over | 173,419 | 109,361 | |||||
Time, other | 21,121 | 17,405 | |||||
$ | 383,603 | $ | 324,965 |
September 30, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
Commitments to grant loans | $ | 33,959 | $ | 12,907 | |||
Unfunded commitments under lines of credit | 76,855 | 67,483 |
September 30, 2014 (unaudited) | Actual | For Capital Adequacy Purposes | To Be Well Capitalized under Prompt Corrective Action Provisions | |||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||
Total capital (to risk-weighted assets) | $ | 38,995 | 11.58 | % | $ ≥ 26,946 | ≥ 8.0% | $ ≥ 33,683 | ≥ 10.0% | ||||||
Tier 1 capital (to risk-weighted assets) | 36,434 | 10.82 | % | ≥ 13,473 | ≥ 4.0% | ≥ 20,210 | ≥ 6.0% | |||||||
Tier 1 capital (to average assets) | 36,434 | 9.09 | % | ≥ 16,039 | ≥ 4.0% | ≥ 20,048 | ≥ 5.0% | |||||||
December 31, 2013 | Actual | For Capital Adequacy Purposes | To Be Well Capitalized under Prompt Corrective Action Provisions | |||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||
Total capital (to risk-weighted assets) | $ | 34,631 | 11.80 | % | $ ≥ 23,483 | ≥ 8.0% | $ ≥ 29,354 | ≥ 10.0% | ||||||
Tier 1 capital (to risk-weighted assets) | 31,785 | 10.83 | % | ≥ 11,742 | ≥ 4.0% | ≥ 17,613 | ≥ 6.0% | |||||||
Tier 1 capital (to average assets) | 31,785 | 8.98 | % | ≥ 14,160 | ≥ 4.0% | ≥ 17,700 | ≥ 5.0% |
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
September 30, 2014 (unaudited) | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Securities available-for-sale: | |||||||||||||||
U.S. Government corporations and agency securities | $ | 12,678 | $ | — | $ | 12,678 | $ | — | |||||||
December 31, 2013 | |||||||||||||||
Securities available-for-sale: | |||||||||||||||
U.S. Government corporations and agency securities | $ | 13,052 | $ | — | $ | 13,052 | $ | — |
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
September 30, 2014 (unaudited) | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Other real estate owned | $ | 75 | $ | — | $ | — | $ | 75 | |||||||
December 31, 2013 | |||||||||||||||
Impaired loans | $ | 140 | $ | — | $ | — | $ | 140 |
Fair Value at September 30, 2014 | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||
(unaudited) | |||||||||
Other real estate owned | $ | 75 | Discounted appraisals | Collateral discounts | 0-10% (5%) | ||||
Fair Value at December 31, 2013 | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||
Impaired loans | $ | 140 | Discounted appraisals | Collateral discounts | 0% (0%) |
September 30, 2014 | December 31, 2013 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
(unaudited) | |||||||||||||||
Assets: | |||||||||||||||
Cash and due from banks | $ | 3,938 | $ | 3,938 | $ | 4,027 | $ | 4,027 | |||||||
Federal funds sold | 34,116 | 34,116 | 12,604 | 12,604 | |||||||||||
Investment securities | 12,678 | 12,678 | 13,052 | 13,052 | |||||||||||
Loans receivable | 364,289 | 360,626 | 320,541 | 318,278 | |||||||||||
Restricted investment in bank stocks | 1,168 | 1,168 | 610 | 610 | |||||||||||
Accrued interest receivable | 1,106 | 1,106 | 1,023 | 1,023 | |||||||||||
Liabilities: | |||||||||||||||
Deposits | 383,603 | 380,533 | 324,965 | 322,644 | |||||||||||
Accrued interest payable | 488 | 488 | 349 | 349 | |||||||||||
Off balance sheet asset (liability) | |||||||||||||||
Commitments to grant loans | — | — | — | — | |||||||||||
Unused lines of credit | — | — | — | — |
Pro Forma Combined Consolidated Balance Sheets as of September 30, 2014 | |||||||||||||||||||
Unaudited (in thousands, except share and per share data) | |||||||||||||||||||
Univest | Valley Green | Combined | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||||
Assets | |||||||||||||||||||
Cash | $ | 68,408 | $ | 3,938 | $ | 72,346 | $ | (4,604 | ) | (6) | $ | 67,742 | |||||||
Securities | 360,778 | 12,678 | 373,456 | — | 373,456 | ||||||||||||||
Federal funds sold | — | 34,116 | 34,116 | — | 34,116 | ||||||||||||||
Loans held for sale | 2,156 | — | 2,156 | — | 2,156 | ||||||||||||||
Loans | 1,597,736 | 366,850 | 1,964,586 | (3,934 | ) | (2)(3) | 1,960,652 | ||||||||||||
Allowance for loan losses | (21,762 | ) | (2,561 | ) | (24,323 | ) | 2,561 | (4) | (21,762 | ) | |||||||||
Loans, net | 1,575,974 | 364,289 | 1,940,263 | (1,373 | ) | 1,938,890 | |||||||||||||
Premises and equipment, net | 35,532 | 3,057 | 38,589 | — | 38,589 | ||||||||||||||
Bank-owned life insurance | 61,804 | — | 61,804 | — | 61,804 | ||||||||||||||
Goodwill | 67,717 | — | 67,717 | 45,349 | (1) | 113,066 | |||||||||||||
Intangibles | 12,625 | 28 | 12,653 | 2,092 | (7) | 14,745 | |||||||||||||
Accrued interest receivable and other assets | 37,202 | 3,528 | 40,730 | 2,678 | (8)(6) | 43,408 | |||||||||||||
Total assets | $ | 2,222,196 | $ | 421,634 | $ | 2,643,830 | $ | 44,142 | $ | 2,687,972 | |||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||
Deposits - noninterest bearing | $ | 436,189 | $ | 43,953 | $ | 480,142 | $ | — | $ | 480,142 | |||||||||
Deposits - interest bearing | 1,423,954 | 339,650 | 1,763,604 | 1,607 | (5) | 1,765,211 | |||||||||||||
Short term borrowings | 38,005 | — | 38,005 | — | 38,005 | ||||||||||||||
Long term borrowings | — | — | — | — | — | ||||||||||||||
Accrued interest payable and other liabilities | 34,234 | 1,804 | 36,038 | 2,092 | (9) | 38,130 | |||||||||||||
Total liabilities | 1,932,382 | 385,407 | 2,317,789 | 3,699 | 2,321,488 | ||||||||||||||
Common stock | 91,332 | 2,799 | 94,131 | 16,141 | (10) | 110,272 | |||||||||||||
Additional paid-in capital | 62,634 | 24,712 | 87,346 | 33,018 | (10) | 120,364 | |||||||||||||
Retained earnings | 179,903 | 8,927 | 188,830 | (8,927 | ) | 179,903 | |||||||||||||
Accumulated other comprehensive (loss)/income | (6,901 | ) | (210 | ) | (7,111 | ) | 210 | (6,901 | ) | ||||||||||
Treasury stock | (37,154 | ) | (1 | ) | (37,155 | ) | 1 | (37,154 | ) | ||||||||||
Total equity | 289,814 | 36,227 | 326,041 | 40,443 | 366,484 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 2,222,196 | $ | 421,634 | $ | 2,643,830 | $ | 44,142 | $ | 2,687,972 | |||||||||
Per Share Data | |||||||||||||||||||
Common shares outstanding | 16,220,249 | 2,797,453 | 3,788,031 | 20,008,280 | |||||||||||||||
Book value per common share | $ | 17.87 | $ | 12.95 | $ | 18.32 | |||||||||||||
Tangible book value per common share | 12.91 | 12.94 | 11.93 |
Pro Forma Consolidated Statements of Income | |||||||||||||||||||
For the Nine Months Ended September 30, 2014 | |||||||||||||||||||
Unaudited (in thousands, except per share data) | |||||||||||||||||||
Univest | Valley Green | Combined | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||||
Interest and dividend income | |||||||||||||||||||
Loans, including fees | $ | 51,093 | $ | 15,245 | $ | 66,338 | $ | (98 | ) | (2) | $ | 66,240 | |||||||
Investment securities | 5,748 | 175 | $ | 5,923 | — | 5,923 | |||||||||||||
Other dividend and interest income | 49 | 29 | $ | 78 | — | 78 | |||||||||||||
Total interest and dividend income | 56,890 | 15,449 | $ | 72,339 | (98 | ) | 72,241 | ||||||||||||
Interest expense | |||||||||||||||||||
Deposits | 2,932 | 1,552 | 4,484 | (603 | ) | (5) | 3,881 | ||||||||||||
Borrowings | 25 | — | 25 | — | 25 | ||||||||||||||
Total interest expense | 2,957 | 1,552 | 4,509 | (603 | ) | 3,906 | |||||||||||||
Net interest income | 53,933 | 13,897 | 67,830 | 505 | 68,335 | ||||||||||||||
Provision for loan losses | 2,959 | 601 | 3,560 | — | 3,560 | ||||||||||||||
Net interest income after provision for loan losses | 50,974 | 13,296 | 64,270 | 505 | 64,775 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges | 8,605 | 306 | 8,911 | — | 8,911 | ||||||||||||||
Securities gains, net | 557 | — | 557 | — | 557 | ||||||||||||||
Earnings on bank-owned life insurance | 1,167 | — | 1,167 | — | 1,167 | ||||||||||||||
Gain on sale of loans | 2,295 | 16 | 2,311 | — | 2,311 | ||||||||||||||
Trust commissions | 5,692 | — | 5,692 | — | 5,692 | ||||||||||||||
Insurance commissions | 8,647 | — | 8,647 | — | 8,647 | ||||||||||||||
Investment advisory commissions | 9,144 | — | 9,144 | — | 9,144 | ||||||||||||||
Other | 468 | 122 | 590 | — | 590 | ||||||||||||||
Total noninterest income | 36,575 | 444 | 37,019 | — | 37,019 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 37,533 | 4,493 | 42,026 | — | 42,026 | ||||||||||||||
Net occupancy | 5,130 | 748 | 5,878 | — | 5,878 | ||||||||||||||
Furniture and equipment | 4,170 | 114 | 4,284 | — | 4,284 | ||||||||||||||
PA shares tax | 993 | 216 | 1,209 | — | 1,209 | ||||||||||||||
FDIC deposit insurance | 1,162 | 55 | 1,217 | — | 1,217 | ||||||||||||||
Acquisition-related costs | 739 | 477 | 1,216 | — | 1,216 | ||||||||||||||
Other | 14,965 | 1,538 | 16,503 | 286 | (7) | 16,789 | |||||||||||||
Total noninterest expense | 64,692 | 7,641 | 72,333 | 286 | 72,619 | ||||||||||||||
Income before taxes | 22,857 | 6,099 | 28,956 | 219 | 29,175 | ||||||||||||||
Income tax expense | 5,816 | 2,255 | 8,071 | 77 | (8) | 8,148 | |||||||||||||
Net income | $ | 17,041 | $ | 3,844 | $ | 20,885 | $ | 142 | $ | 21,027 | |||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 1.05 | $ | 1.39 | $ | 1.05 | |||||||||||||
Diluted | 1.04 | 1.39 | 1.05 |
Pro Forma Consolidated Statements of Income | |||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||
Unaudited (in thousands, except per share data) | |||||||||||||||||||
Univest | Valley Green | Combined | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||||
Interest and dividend income | |||||||||||||||||||
Loans, including fees | $ | 67,950 | $ | 17,503 | $ | 85,453 | $ | (130 | ) | (2) | $ | 85,323 | |||||||
Investment securities | 9,503 | 220 | $ | 9,723 | — | 9,723 | |||||||||||||
Other dividend and interest income | 126 | 30 | $ | 156 | — | 156 | |||||||||||||
Total interest and dividend income | 77,579 | 17,753 | $ | 95,332 | (130 | ) | 95,202 | ||||||||||||
Interest expense | |||||||||||||||||||
Deposits | 4,586 | 1,826 | 6,412 | (804 | ) | (5) | 5,608 | ||||||||||||
Borrowings | 48 | 3 | 51 | — | 51 | ||||||||||||||
Other | 483 | — | 483 | — | 483 | ||||||||||||||
Total interest expense | 5,117 | 1,829 | 6,946 | (804 | ) | 6,142 | |||||||||||||
Net interest income | 72,462 | 15,924 | 88,386 | 674 | 89,060 | ||||||||||||||
Provision for loan losses | 11,228 | 701 | 11,929 | — | 11,929 | ||||||||||||||
Net interest income after provision for loan losses | 61,234 | 15,223 | 76,457 | 674 | 77,131 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges | 11,841 | 337 | 12,178 | — | 12,178 | ||||||||||||||
Securities gains, net | 3,389 | 9 | 3,398 | — | 3,398 | ||||||||||||||
Earnings on bank-owned life insurance | 2,968 | — | 2,968 | — | 2,968 | ||||||||||||||
Gain on sale of loans | 5,135 | 199 | 5,334 | — | 5,334 | ||||||||||||||
Loss on termination of swap | (1,866 | ) | — | (1,866 | ) | — | (1,866 | ) | |||||||||||
Trust commissions | 7,303 | — | 7,303 | — | 7,303 | ||||||||||||||
Insurance commissions | 9,395 | — | 9,395 | — | 9,395 | ||||||||||||||
Investment advisory commissions | 7,642 | — | 7,642 | — | 7,642 | ||||||||||||||
Other | 977 | 216 | 1,193 | — | 1,193 | ||||||||||||||
Total noninterest income | 46,784 | 761 | 47,545 | — | 47,545 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 48,034 | 4,961 | 52,995 | — | 52,995 | ||||||||||||||
Net occupancy | 5,869 | 867 | 6,736 | — | 6,736 | ||||||||||||||
Furniture and equipment | 4,865 | 132 | 4,997 | — | 4,997 | ||||||||||||||
PA shares tax | 1,953 | 156 | 2,109 | — | 2,109 | ||||||||||||||
FDIC deposit insurance | 1,553 | 220 | 1,773 | — | 1,773 | ||||||||||||||
Restructuring charge | 534 | — | 534 | — | 534 | ||||||||||||||
Acquisition-related costs | 87 | — | 87 | — | 87 | ||||||||||||||
Other | 18,238 | 2,617 | 20,855 | 381 | (7) | 21,236 | |||||||||||||
Total noninterest expense | 81,133 | 8,953 | 90,086 | 381 | 90,467 | ||||||||||||||
Income before taxes | 26,885 | 7,031 | 33,916 | 293 | 34,209 | ||||||||||||||
Income tax expense | 5,696 | 2,405 | 8,101 | 103 | (8) | 8,204 | |||||||||||||
Net income | $ | 21,189 | $ | 4,626 | $ | 25,815 | $ | 190 | $ | 26,005 | |||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 1.28 | $ | 1.92 | $ | 1.31 | |||||||||||||
Diluted | 1.27 | 1.92 | 1.31 |
(1) | The acquisition will be effected by the distributions of cash and issuance of shares of Univest common stock to Valley Green's common shareholders. The following unaudited pro forma combined consolidated financial information assumes that 100% of the outstanding shares of Valley Green common stock will be exchanged for Univest common stock at an exchange ratio of 1.3541 shares of Univest common stock for each share of Valley Green common stock. Additionally, Univest will pay approximately $2.2 million to Valley Green for outstanding stock options and related taxes. |
The unaudited pro forma combined consolidated financial information is based upon the assumption that the total number of shares of Valley Green common stock outstanding immediately prior to the completion of the merger will be 2,797,453 and utilizes the exchange ratio of 1.3541 for 100% of Valley Green’s outstanding shares and cash of $2.2 million for Valley Green stock options and related taxes. This will result in the issuance of 3,788,031 shares of Univest common stock with a fair value of $76.7 million, for a total purchase price of $78.9 million. The final purchase price was determined based upon the fair value of Univest shares of common stock as of the merger closing, the final exchange ratio as established in accordance with the merger agreement, the number of Valley Green shares outstanding as of closing, and the number and strike price of Valley Green Options as of the merger closing. The final allocation of the purchase price will be determined after the merger is completed and additional analyses are performed to determine the fair values of Valley Green’s tangible and identifiable intangible assets and liabilities as of the date the merger is completed. The final adjustments may be materially different from the unaudited pro forma adjustments presented herein. The unaudited pro forma combined consolidated financial information has been prepared to include the estimated adjustments necessary to record the assets and liabilities of Valley Green at their respective fair values and represents management’s best estimate based upon the information available at this time. The pro forma adjustments included herein are subject to change as additional information becomes available and as additional analyses are performed. Such adjustments, when compared to the information shown in this document, may change the amount of the purchase price allocation to goodwill while changes to other assets and liabilities may impact the statement of income due to adjustments in the yield and/or amortization/accretion of the adjusted assets and liabilities. | |
The total estimated purchase price for the purpose of this unaudited pro forma combined consolidated financial information is $78.9 million. Goodwill is created when the purchase price consideration exceeds the fair value of the assets acquired or a bargain purchase gain results when the current fair value of the assets acquired exceeds the purchase price consideration. For purposes of this analysis as of September 30, 2014, goodwill of $45.3 million results from the transaction; however, the final purchase accounting analysis will be performed as of the merger date and these amounts are subject to change based on operations subsequent to September 30, 2014, as additional information becomes available and as additional analyses are performed. The following table provides the calculation and allocation of the purchase price used in the pro forma financial statements and a reconcilement of pro forma shares to be outstanding. |
Summary of Purchase Price Calculation and Goodwill Resulting From Merger | ||||||
(in thousands, except share data) | ||||||
Purchase price consideration in common stock: | ||||||
Valley Green shares outstanding | 2,797,453 | |||||
Exchange ratio | 1.3541 | |||||
Univest shares to be issued | 3,788,031 | |||||
Univest closing price | $ | 20.24 | ||||
Purchase price assigned to Valley Green shares exchanged for Univest stock | $ | 76,670 | ||||
Purchase price assigned to Valley Green stock options exchanged for cash | 2,237 | |||||
Total purchase price | $ | 78,907 | ||||
Net assets acquired: | ||||||
Valley Green common shareholders' equity | $ | 36,227 | ||||
Core deposit intangible | 2,092 | |||||
Adjustments to reflect assets acquired at fair value: | ||||||
Loans | (3,934 | ) | ||||
Allowance for loan losses | 2,561 | |||||
Deferred tax assets | 311 | |||||
Adjustments to reflect liabilities acquired at fair value: | ||||||
Interest bearing deposits | (1,607 | ) | ||||
Change in control accrued payments | (2,092 | ) | 33,558 | |||
Goodwill resulting from merger | $ | 45,349 |
(2) | A fair value premium of $1.304 million to reflect fair values of loans based on current interest rates of similar loans. The adjustment will be substantially recognized over approximately 10 years using an amortization method based upon the expected life of the loans and is expected to decrease pro forma pre-tax interest income by $130 thousand in the first year following consummation of the merger. |
(3) | A fair value discount of $5.238 million to reflect the credit risk of the loan portfolio. No pro forma earnings impact was assumed from the loan credit adjustment. The estimated fair value of the covered loans approximates their carrying value. |
(4) | Reversal of the Valley Green allowance for loan losses of $2.561 million in accordance with acquisition method of accounting for the merger. |
(5) | A fair value premium of $1.607 million to reflect the fair values of certain interest-bearing deposit liabilities based on current interest rates for similar instruments. The adjustment will be recognized using an amortization method based upon the estimated maturities of the deposit liabilities. This adjustment is expected to decrease pro forma pre-tax interest expense by $804 thousand in the first year following consummation of the merger. |
(6) | Cash on hand of $2.237 million is utilized in conjunction with extinguishing Valley Green stock options and cash on hand of $2.367 million is utilized for the purchase of additional Federal Reserve Bank Capital Stock. |
(7) | Adjustment of $2.092 million for core deposit intangible to reflect the fair value of this asset and the related amortization using an expected life of 10 years. The amortization of the core deposit intangible is expected to increase pro forma pre-tax noninterest expense by $381 thousand in the first year following consummation of the merger. |
(8) | Adjustment assumes a tax rate of 35% related to deferred taxes on fair value adjustments and on pre-tax amortization and accretion amounts in the unaudited pro forma combined consolidated statement of income. |
(9) | Accrual for change in control payments of $2.092 million. |
(10) | The table below sets forth an adjustment to reflect the issuance of shares of Univest common stock with a $5.00 par value in connection with the acquisition and the adjustments to shareholders’ equity for the elimination of Valley Green historical equity accounts. |
Adjustment to common stock, par value $5.00 | $ | 18,940 | |
Less: historical value of Valley Green common stock | 2,799 | ||
Adjustment to common stock in the pro forma unaudited combined consolidated balance sheet | $ | 16,141 | |
Adjustment to additional paid-in capital | $ | 57,730 | |
Less: historical value of Valley Green common stock | 24,712 | ||
Adjustment to additional paid-in capital in the pro forma unaudited combined consolidated balance sheet | $ | 33,018 |
_T#XI?M M&W$GA.YA#/;0ZQJ>MK<2K(C1I);7!@3:"I?=N)#(N%YROZE44`?.O[,_[!7P MF_99N+G4/#6F7&N>(99O-B\0>(_)NKZT7RVC\NW=(D$*E7DW%%#/YA#,P"A? MHJBB@`HHHH`^*O\`@IE^QCXO_:R\*^$+_P`$WVGC6O"GV]_[(U!S#]O2>.)M ML4O*K+NMD55?:A\TEI$"?-X5\'?^"5_Q%^)7C[2_%/[3?C&X\5:;#ID1CTZ/ MQ'X5_(FSN;*/R6K]2J*`/SU_X*I^`(?A;^PKX=\) M_#[2;C0_!^E>(+*WO+'21)Y$=EY5R0;D@G */VZM. M\`_L?_"/X+?LYW5Q/XVU73(K#6YM/M[W[=IM[,(WN(K3S(_GGN+F><+)$S>7 MM(C`+1,GZY^+/"VE^./"NL^&];M?MNBZQ93:??6WF/'YT$L;1R)N0AERK$94 M@C/!!KR#X0_L._`_X#^,H_%G@CP';Z3XAAADMX;Z:^N[QH5<8 5PC% ]U=./]6L MK#S9(D) "?'_`(2U#6=:E\JVA_LZ M3R4>ZM#/Y.?.56%M.MQYBSA2P38PB\O[?UQ7C;X(_#KXE:K%J?B[P!X7\5 M:E#"+:.\UO1K:\F2(,S",/(C$*&=SMSC+$]S0!^6OP._9_\`C/\`\%+=2'Q% M^+/C?4++X1WNM7);0+*^N+78\5NR0RZ;;20R6WE)(XA,A)<[+@,S2;F:K_P4 MW?P5\*?CI\`?AA/X5M[;X0>#M,AU.;1])5TN9[6YOV2]BWF52S/'9`ARRN9) M9&:0ELC]B:^5?^"@_P"QC9;=X)0JW,# MF/=MW;(I`_EN XE7<':"(;=VSDM)$F4\S>OC__``3<_9P\2:%K'CWX^?$?2O["\??$&]NW MCT-[.YLY=*@>\>6X5XIFR/.F6-E5@Q6.*,B0^:P'FOP#_P""7WCWQCX^T?Q[ M^TOXWN/%EQIL-E/8:')J;ZM,S)+YS6E])
?II0`4 M444`%%%%`!7BGQ(_8O\`@K\7OB/;^//%_@#3]:\4P^1NO)99D2X\DYC\^%'$ M4^``I\U&W(JH UT4`%%%%`!7Y5_\%@/B9>?$[XC_``R^`/A"?^T]:DO8 M[R^TR-[<(]_ 5]H^SP)%YFS ET4`?/_PS_8'^`/PA\50>)/#'PVT^#6K?:;>YU"YN=0^SNLB2 M++$MS+(L <,`3GZ`HHH`****`.*^*'P4\!?&K2AI_CKPAH_BFW2 M&:W@?4K1))K59E"R&"7&^%B%7YXV5@54@@J".?\`A;^RK\(/@M_9DG@WX=>' M]'O]-\W[)JWV-9]1C\S?O_TR7=. %?%%Q\/=2U*:XN]:B:S?5(;ZZEE,IG4/.AA8L[[E4E"-FU4PQ?J_V9 M_P#@EK\)O@/;W-WXEM;?XJ^(;J'[/+<^(]-A>QA7S&;-O9N'",5\M6=WD;Y# MM*!V4_95%`'P5JW_``1A^!6I:K>7=OK?CC2[>>9Y8[&TU*U:&V5F)$:&2V=R MJ@[07=FP!EB @HH`_"O]D_X^7GP1\5>(OVD9KK_A-[^_\`[2T[QUI-U!;Z M;+!=7LGVG3WM)//`G^TW%NY?RH2T$=O #?#^MZ*M[)J2Z=J.EP7%N+J1I'DN!&Z%?-9II69\;B97).6.=7PM MX3T/P/H-KHGAO1M/\/Z+:[O(T[2[5+:WAW,7;9&@"KEF9C@ IH`_&']K' M_@E_??LY_L\^&/&.D:EK'C'Q9#,T?BJUTVP:>QMHC#+,US$50/%!`(MCR2Y# M[U?]S]P^U?"'_@L9\.O!/PCCTB[^$EQX:UW3X9%L]%\(1VT.BS2E-Y<9*-:K M).TA*B.8H#NW2,2*_4JN4M?A/X(L=>T36[?P;X?M]:T.R73=*U&+2X%N-/M5 M5D6W@D";HH@LCJ$0A0'88P30!^4.K?M'?MK_`+;$EX_PP\-ZQX1\$WL+R6C: M#&FG0R1171`*ZM<%"\X;;&X@EC#B)_W0'F"OT)_8I^`_CCX`_"O5=-^(_C'_ M`(3CQGK6M2ZO?ZG]IGNL9@@MHH_/GQ)+B*VC.YE7&[8`0@9OH"B@`JIJVK6. M@Z5>:GJ=Y;Z=IME"]S=7EW*L4,$2*6>1W8@*JJ"2Q.``2:MU^:O[>'QF\SNY(\(+:-)`9@?,WR21Q!1*AC< M`^H/V.OVJ;[]JJW^(.IP^'[>U\)Z#X@N-*T;Q);7+!=9B$DCHQM9%$L#);O9 MEBY(=IF(";2B_15SQF"U*-&-R,9Y8@'&-I(8D`$@U;XO:M MX+_:7T#P!XBDT=_#WC;3+JY\+36D-PE]'>V2QO=VUS]^.17BE\Z.4&+;Y3QL MK$HS?,'_``50^/&A^(/V?;CX9>!O$'A_Q=XO\0>)K/0=0\.:7>I>ZI!Y (KS2;>TN/$OB"XN+74% M$9FN[*&..!`S*2P5)TO`J/C!9V`P^6^]:\?_`&0OA#-\!_V:/A[X(NX[B#4M M.TQ9=0@N9HYFAO9V:XN8P\?R,J332*I!/RJOS-]X^P4`%%%%`!1110`4444` M%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4 M444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!11 M10`4444`%%%%`!1110`4444`?E7^W-_P4"\<>,/C!J7P"^" 2XO;7P]+K M5NT^GZH-96]"O#:7(GC5(MRQP,SH`?WV"4*N?M3]BC]E'2_V2_@W9>'MFGWG MB^^_TGQ#K=E$P^VSY8H@9SN,4*MY:<*#AGV(TCBNU\)_LW_#;P+\7/$'Q.\/ M^%K?2?&WB"%[?4]2MIIE6X5WC>0F#?Y2L[PH[.J!F; NUIS*ZF*-E8."Q**`/JJBBB@`HHHH`****`"BB MB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**** M`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH` M****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`H 9HHH`****`"BBB@`HHHH`****`"BBB@#_V3\_ ` end
D!
M\@'Z`@,"#`(4`AT")@(O`C@"00)+`E0"70)G`G$">@*$`HX"F`*B`JP"M@+!
M`LL"U0+@`NL"]0,``PL#%@,A`RT#.`-#`T\#6@-F`W(#?@.*`Y8#H@.N`[H#
MQP/3`^`#[`/Y!`8$$P0@!"T$.P1(!%4$8P1Q!'X$C`2:!*@$M@3$!-,$X03P
M!/X%#044%]@8&!A8&)P8W!D@&
M609J!GL&C`:=!J\&P`;1!N,&]0<'!QD'*P<]!T\'80=T!X8'F0>L![\'T@?E
M!_@("P@?"#((1@A:"&X(@@B6"*H(O@C2".<(^PD0"24).@E/"60)>0F/":0)
MN@G/">4)^PH1"B<*/0I4"FH*@0J8"JX*Q0K<"O,+"PLB"SD+40MI"X`+F`NP
M"\@+X0OY#!(,*@Q##%P,=0R.#*<,P`S9#/,-#0TF#4`-6@UT#8X-J0W##=X-
M^`X3#BX.20YD#G\.FPZV#M(.[@\)#R4/00]>#WH/E@^S#\\/[!`)$"800Q!A
M$'X0FQ"Y$-<0]1$3$3$13Q%M$8P1JA')$>@2!Q(F$D429!*$$J,2PQ+C$P,3
M(Q-#$V,3@Q.D$\43Y10&%"<4211J%(L4K13.%/`5$A4T%585>!6;%;T5X!8#
M%B86219L%H\6LA;6%OH7'1=!%V47B1>N%](7]Q@;&$`891B*&*\8U1CZ&2`9
M11EK&9$9MQG=&@0:*AI1&G<:GAK%&NP;%!L[&V,;BANR&]H<`APJ'%(<>QRC
M',P<]1T>'4<=:AZ4'KX>Z1\3'SX?:1^4'[\?ZB`5($$@
M;""8(,0@\"$<(4@A=2&A( &YXS'DJ>8EYYWI&
M>J5[!'MC>\)\(7R!?.%]07VA?@%^8G["?R-_A'_E@$>`J($*@6N!S8(P@I*"
M](-7@[J$'82`A..%1X6KA@Z&