-----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, Ejd/0GzZvqhn00S2SrQQfEdLf0g1NxRScvd6B8fCQIdpeYVykgj17a3jCrLmbSZc 2tWAsTnPWqGAHT9KPNSCiw== 0000929638-97-000097.txt : 19970305 0000929638-97-000097.hdr.sgml : 19970305 ACCESSION NUMBER: 0000929638-97-000097 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970304 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UST CORP /MA/ CENTRAL INDEX KEY: 0000316901 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 042436093 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-09623 FILM NUMBER: 97549967 BUSINESS ADDRESS: STREET 1: 40 COURT ST CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 6177267000 MAIL ADDRESS: STREET 1: 40 COURT ST CITY: BOSTON STATE: MA ZIP: 02108 8-K/A 1 FORM 8-K/A --------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT: August 30, 1996 UST CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 0-9623 04-2436093 (STATE OR OTHER JURISDICTION OF (COMMISSION FILE NO.) (IRS EMPLOYER INCORPORATION) IDENTIFICATION NO.) 40 COURT STREET 02108 BOSTON, MASSACHUSETTS (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (617) 726-7000 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) --------------------------------------------------------------------- ITEM 2. ACQUISITION OF ASSETS. Acquisition of Walden Bancorp, Inc. On August 30, 1996, UST Corp. (the "Company") executed an agreement with Walden Bancorp, Inc. ("Walden") of Acton, Massachusetts pursuant to which the Company agreed to acquire Walden (the "Merger"). On January 3, 1997, the Company consummated the Merger. Walden is the bank holding company for two community banks, The Co-operative Bank of Concord ("Concord") and The Braintree Savings Bank ("Braintree"), which operate an aggregate of seventeen (17) branches in the Massachusetts counties of Middlesex, Norfolk and Plymouth. The transaction was structured as a tax-free exchange of 1.9 shares of the Company's common stock for each share of Walden common stock and accounted for as a pooling of interests. As of the closing date, the transaction was valued at approximately $207 million. A total of 10,125,540 shares of UST common stock were issued in exchange for the 5,329,232 Walden shares outstanding at the closing date. The Company hereby files its Unaudited Pro Forma Combined Financial Statements and Notes thereto in connection with the Merger as of December 31, 1996. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Historical financial statements of UST (Incorporated by reference to UST's Annual Report on Form 10-K for its fiscal year ended December 31, 1995) (b) Historical financial statements of Walden (Incorporated by reference to Walden's Annual Report on Form 10-K for its fiscal year ended December 31, 1995) (c) Unaudited Pro Forma Condensed Combined Statements of Income for the years ended December 31, 1994 and 1993 (Incorporated by reference to UST's Registration Statement on Form S-4 (Registration No. 333-15521) filed with the Securities and Exchange Commission on November 5, 1996) (d) Unaudited Pro Forma Combined Financial Statements and Notes thereto (Exhibit 99) (e) Exhibits 23.1 Consent of Arthur Andersen LLP (concerning UST financials). 23.2 Consent of Arthur Andersen LLP (concerning Walden financials) 99 Unaudited Pro Forma Combined Financial Statements and Notes thereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. UST Corp. /s/ James K. Hunt James K. Hunt Executive Vice President, Treasurer and Chief Financial Officer Dated: March 4, 1997 UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION UST CORP. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEET DECEMBER 31, 1996 The following Unaudited Pro Forma Condensed Combining Balance Sheet presents the combined financial position of UST Corp. ("UST") and subsidiaries and Walden Bancorp, Inc. and subsidiaries ("Walden") as of December 31, 1996, assuming the combination, which was consummated on January 3, 1997, had occurred as of December 31, 1996. The accompanying pro forma information is based on historical balance sheet data of UST and Walden as of December 31, 1996, giving effect to the combination of UST and Walden under the pooling of interests method of accounting, UST's fourth quarter purchase of twenty former Bank of Boston and BayBank branches and the November sale of UST's former banking subsidiary, UST Bank/Connecticut. The combination of Walden with UST reflects the issuance of 1.9 shares of UST Common Stock in exchange for, and in cancellation of, each outstanding share of Walden Common Stock. The difference between the par value of the UST Common Stock issued and the par value of the Walden Common Stock acquired ($999,000) has been charged to Additional paid-in-capital. The Unaudited Pro Forma Condensed Combining Balance Sheet should be read in conjunction with the Unaudited Pro Forma Condensed Combined Statements of Income contained herein and the historical financial statements and notes thereto of each of UST and Walden which are incorporated by reference in this Form 8-K/A. The Unaudited Pro Forma Condensed Combining Balance Sheet is presented for informational purposes only and is not necessarily indicative of the combined financial position that would have occurred if the combination of UST and Walden had been consummated on December 31, 1996, or at the beginning of the periods indicated or which may be obtained in the near future.
UST CORP. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEET DECEMBER 31, 1996 Historical Historical Adjustments Pro Forma (In thousands) UST Walden (Notes 1 & 2) Combined --------------- ---------------- ----------------- --------------- Cash and Due From Banks, and Interest Bearing Deposits $ 111,532 $ 28,537 $(13,500) $ 126,569 Excess Funds Sold 127,469 19,432 (4,000) 142,901 Securities: - Available for Sale 528,174 142,180 670,354 Held to Maturity - 145,564 145,564 Loans, net of Reserve for Possible Loan Losses 1,809,353 593,256 2,402,609 Premises, Furniture and Equipment 41,512 11,927 53,439 Intangible Assets, net 53,878 12,948 66,826 Other Real Estate Owned 688 1,104 1,792 Other Assets 34,008 40,681 74,689 =============== ================ ============== ================ Total Assets $ 2,706,614 $ 995,629 $ (17,500) $ 3,684,743 =============== ================ ============== ================ Deposits: Demand and NOW Accounts $ 799,279 $ 182,430 $ 981,709 Regular Savings 457,769 190,967 648,736 Money Market 243,749 69,310 313,059 Time Deposits 605,069 307,239 912,308 --------------- ---------------- -------------- ---------------- Total Deposits 2,105,866 749,946 2,855,812 Borrowed Funds 348,066 134,356 (4,000) 478,422 Other Liabilities 54,722 13,697 (4,400) 64,019 --------------- ---------------- -------------- ---------------- Total Liabilities 2,508,654 897,999 (8,400) 3,398,253 ---------------- -------------- --------------- ---------------- Stockholders' Investment: Common Stock 11,262 5,326 999 17,587 Additional Paid In Capital 75,710 35,937 (999) 110,648 Retained Earnings 112,975 56,490 (9,100) 160,365 Net Unrealized Loss on Securities Available for Sale (2,453) (123) (2,576) Deferred Compensation and Other 466 - 466 --------------- ---------------- -------------- ---------------- Total Stockholders' Investment 197,960 97,630 (9,100) 286,490 --------------- ---------------- -------------- ---------------- --------------- --------------- --------------- --------------- Total Liabilities and Stockholders' Investment $ 2,706,614 $ 995,629 $ (17,500) $ 3,684,743 =============== ================ ============== ================ See accompanying Notes to Unaudited Pro Forma Condensed Financial Information.
UST CORP. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME SUMMARY The following Unaudited Pro Forma Condensed Combined Statements of Income give effect to UST's acquisition of Walden by combining the results of operations of UST for the year ended December 31, 1996, with the results of operations of Walden for the year ended December 31, 1996, on a pooling of interests basis, assuming the combination, which was consummated on January 3, 1997, had occurred as of January 1, 1996. Income per weighted average common share outstanding is based on the exchange ratio of 1.9 shares of UST for each share of Walden as specified in the Affiliation Agreement. The Unaudited Pro Forma Condensed Combined Statements of Income should be read in conjunction with the Unaudited Pro Forma Condensed Combining Balance Sheet appearing elsewhere in this Form 8-K/A. The Unaudited Pro Forma Condensed Combining Balance Sheet reflects an after-tax charge for estimated, as of the date hereof, merger and reorganization expenses of $9.1 million ($13.5 million pre-tax) net of an estimated 40% tax benefit (after excluding $2.5 million of nondeductible expense); however, since these expenses are nonrecurring, they have not been reflected in the Unaudited Pro Forma Condensed Combined Statements of Income. The pro forma combined statements of income do not give effect to any anticipated cost savings in connection with the combination. The Unaudited Pro Forma Condensed Combined Statements of Income are presented for information purposes only and are not necessarily indicative of the combined results of operations that would have occurred if the combination of UST and Walden had been consummated on December 31, 1996 or at the beginning of the period indicated or which may be obtained in the future.
UST CORP. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996 Historical Historical Pro Forma (In thousands, except share data) UST Walden Combined -------------------- ------------------ -------------------- Interest Income Interest and Fees on Loans $ 122,279 $ 54,618 $ 176,897 Interest and Dividends on Securities 34,317 18,871 53,188 Interest on Excess Funds and Other 1,058 1,165 2,223 ------------------- ------------------ -------------------- Total Interest Income 157,654 74,654 232,308 ------------------- ------------------ -------------------- Interest Expense Interest on Deposits 45,256 26,369 71,625 Interest on Borrowings 16,272 9,156 25,428 ------------------- ------------------ -------------------- Total Interest Expense 61,528 35,525 97,053 ------------------- ------------------ -------------------- ------------------- ------------------ -------------------- Net Interest Income 96,126 39,129 135,255 Provision (Credit) for Possible Loan Losses (18,600) 1,300 (17,300) Net Interest Income after Provision ------------------- ------------------ -------------------- (Credit) for Possible Loan Losses 114,726 37,829 152,555 ------------------- ------------------ -------------------- Non-Interest Income Asset Management Fees 12,569 - 12,569 Fees and Charges 14,249 3,509 17,758 Mortgage Loan Servicing Fees - 2,394 2,394 Gain on Sale of Subsidiary Bank 6,806 - 6,806 Securities Gains, net 1,113 51 1,164 Gain on Sale of Loans - 17 17 Other 2,551 957 3,508 ------------------- ------------------ -------------------- Total non-interest income 37,288 6,928 44,216 ------------------- ------------------ -------------------- Non-Interest Expense Salaries and Employee Benefits 48,009 14,047 62,056 Occupancy and Equipment 11,735 4,142 15,877 Foreclosed Asset and Workout Expense 1,583 139 1,722 Acquisition Charges 5,933 - 5,933 Credit Card Processing Expense 5,356 - 5,356 Deposit Insurance Assessment 3,954 5 3,959 Other 21,768 9,658 31,426 ------------------- ------------------ -------------------- Total non-interest expense 98,338 27,991 126,329 ------------------- ------------------ -------------------- ------------------- ------------------ -------------------- Income before Taxes 53,676 16,766 70,442 Income Tax Expense 21,014 6,247 27,261 =================== ================== ==================== Net Income $ 32,662 $ 10,519 $ 43,181 =================== ================== ==================== Weighted Average Number of Common Shares Outstanding 18,227,036 5,352,089 28,396,005 Net Income per Share $ 1.79 $ 1.97 $ 1.52 See accompanying Notes to Unaudited Pro Forma Condensed Financial Information.
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION NOTE 1: The combination has been accounted for as a pooling of interests. Accordingly, pro forma financial information assumes that the combination was consummated as of the beginning of the periods indicated herein. Certain reclassifications have been made to the accounts of Walden in the accompanying Unaudited Pro Forma Condensed Combining Balance Sheet and Unaudited Pro Forma Condensed Combined Statements of Income to conform to UST presentation. Pro forma results of operations do not reflect nonrecurring items of income and expense relating directly from the proposed Affiliation. The effect of an estimated, as of the date hereof, one-time after-tax charge of $9.1 million, ($13.5 million pre-tax), to be taken by UST in connection with the combination, has been reflected in the accompanying Unaudited Pro Forma Condensed Combined Balance Sheet as a reduction in cash and retained earnings, net of a 40% tax benefit of $4.4 million recorded in other liabilities after excluding $2.5 million of nondeductible expense. The charge has not been reflected in the Unaudited Pro Forma Condensed Combined Statements of Income since it is nonrecurring. The pro forma financial information does not give effect to any cost savings in connection with the combination. NOTE 2: The pro forma stockholders' investment accounts of UST and Walden have been adjusted in the accompanying Unaudited Pro Forma Condensed Combining Balance Sheet to reflect the issuance of shares of UST Common Stock in exchange for all of the outstanding shares of Walden Common Stock. The number of shares of UST Common Stock issued pursuant to the acquisition of Walden was based upon the number of Walden shares outstanding as of December 31, 1996, and the exchange ratio of 1.9 shares of UST Common Stock for each share of Walden Common Stock as specified in the Affiliation Agreement. The difference between the par value of the UST Common Stock issued ($0.625 per share) and the par value of the Walden Common Stock acquired ($1.00 per share) has been charged to Additional paid-in-capital. NOTE 3: Pro forma earnings per share amounts in the accompanying Unaudited Pro Forma Condensed Combined Statements of Income are based on the weighted average number of common shares of the constituent companies outstanding during the period assuming an exchange ratio of 1.9 shares of UST Common Stock for each share of Walden Common Stock as specified in the Affiliation Agreement. Note 4: In June 1996, UST's principal banking subsidiary, USTrust, entered into a definitive agreement with The First National Bank of Boston ("FNBB") and its parent company, Bank of Boston Corporation, pursuant to which USTrust agreed to purchase twenty banking branches (the "Branch Purchase") of FNBB and BayBank, N.A. ("BayBank"). The transaction was consummated in November and December 1996 and included the assumption of an aggregate of $527 million in demand deposits, NOW accounts, regular savings and money market accounts; $140 million in certificates of deposit and $77 million of repurchase agreements. USTrust received $18 million in premises and equipment and $508 million in commercial, residential real estate and other loans with businesses and consumers, and the remainder in cash, net of a premium equal to 7 percent of the average deposit liabilities assumed, or approximately $49 million. USTrust recorded a pre-tax provision of $5.1 million for acquisition expenses related to the Branch Purchase which is reported as other expense in the accompanying Unaudited Pro Forma Condensed Combined Statements of Income. The Branch Purchase provision for acquisition expenses consisted primarily of customer related expenses such as direct mailings, replacement checks and ATM and debit cards, promotions, target advertising, professional services and various incentive programs directed toward the customers of the branches acquired. Since the Branch Purchase does not represent the acquisition of a business, separate entity or subsidiary of the seller, and there are no historical financial statements related thereto, the effect of the Branch Purchase is included only since the dates on which the deposit liabilities were assumed and the assets were purchased. On November 29, 1996, UST completed the sale of its Connecticut banking subsidiary, UST Bank/Connecticut ("UST/Conn"). Under the terms of the transaction, UST received cash of $13.4 million representing UST/Conn's adjusted capital plus a deposit premium of 7 percent. As a result, UST recorded a $6.8 million gain on the sale. Also, in connection with the sale of UST/Conn, UST recorded a one-time provision of $830,000 for the remaining obligation to fund the UST/Conn Directors' retirement plan. Both the $6.8 million gain on sale and $830,000 expense provision are included in the accompanying Unaudited Pro Forma Condensed Combined Statements of Income. EX-1 2 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS As independent accountants, we consent to the incorporation by reference in this Current Report on Form 8-K/A, of our report dated January 29, 1996 included in UST Corp.'s Form 10-K for the year ended December 31, 1995 and to all references to our Firm included in this Current Report. /s/ Arthur Andersen LLP Arthur Andersen LLP Boston, Massachusetts February 28, 1997 EX-2 3 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS As independent accountants, we consent to the incorporation by reference in this Current Report on Form 8-K/A, of our report dated January 25, 1996 included in Walden Bancorp, Inc.'s Form 10-K for the year ended December 31, 1995 and to all references to our Firm included in this Current Report. /s/ Arthur Andersen LLP Arthur Andersen LLP Boston, Massachusetts February 28, 1997 -----END PRIVACY-ENHANCED MESSAGE-----