-----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, AsloFgPxuLlY0tTC5NqeQVQYab/3FXhHhv3Yeilw6HYWvz06/vOKyxfm0P5jQ06C RDi6tdfTiqRtJ0aOfT/Bjw== 0000062741-97-000138.txt : 19971009 0000062741-97-000138.hdr.sgml : 19971009 ACCESSION NUMBER: 0000062741-97-000138 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971001 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971008 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARSHALL & ILSLEY CORP/WI/ CENTRAL INDEX KEY: 0000062741 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 390968604 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-01220 FILM NUMBER: 97692500 BUSINESS ADDRESS: STREET 1: 770 N WATER ST CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4147657801 MAIL ADDRESS: STREET 1: 770 NORTH WATER ST CITY: MILWAUKEE STATE: WI ZIP: 53202 8-K 1 8-K DATED OCTOBER 3, 1997 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): October 1, 1997 MARSHALL & ILSLEY CORPORATION (Exact name of registrant as specified in its charter) Wisconsin 0-1220 39-0968604 - ---------------------------------- ---------------- ---------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 770 North Water Street Milwaukee, Wisconsin 53202 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (414) 765-7801 Item 2. Acquisition or Disposition of Assets. ------------------------------------- On October 1, 1997, Marshall & Ilsley Corporation (the "Corporation" or "M&I") acquired Security Capital Corporation ("Security") pursuant to an Agreement and Plan of Merger dated as of March 14, 1997 (the "Merger Agreement"). Security merged with and into the Corporation (the "Merger"), and the outstanding shares of Security Common Stock were converted in the Merger into an aggregate of approximately 12,327,390 shares of Corporation Common Stock and approximately $376,335,605 in cash. The cash portion of the consideration was funded from the available cash of the combined entity. Security shareholders were entitled to elect what form of consideration they received, subject to limitations set forth in the Merger Agreement. Information concerning the consideration to be received by the former Security shareholders is included in the Corporation's press release dated October 1, 1997 announcing completion of the Merger which is attached as an exhibit hereto and is incorporated herein by reference. Certain other information regarding the Merger, the Corporation and Security, including a description of the assets involved, the nature and amount of consideration paid by the Corporation, the method used for determining the amount of such consideration, and the nature of any material relationship between Security and the Corporation, is incorporated by reference herein to certain sections of the Corporation's Registration Statement on Form S-4 (Reg. No. 333-28761) which sections are identified in the exhibit list below. Item 7. Financial Statements and Exhibits. ---------------------------------- (a) Financial Statements of Business Acquired The following financial statements of Security are incorporated herein by reference to Security's Annual Report on Form 10-K (File No. 0-22588) for the Fiscal Year Ended June 30, 1997: (i) Audited Consolidated Statements of Financial Condition of Security as of June 30, 1997 (ii) Audited Consolidated Statements of Income of Security for the year ended June 30, 1997 (iii) Independent Auditors' Report of KPMG Peat Marwick LLP. (b) Unaudited Pro Forma Financial Information (i) Unaudited Pro Forma Condensed Balance Sheet as of June 30, 1997 (attached as Exhibit 99.5 hereto and incorporated herein by reference) (ii) Unaudited Pro Forma Condensed Statement of Income for the twelve months ended December 31, 1996 (incorporated by reference to the Corporation's Registration Statement on Form S-4 (Reg. No. 333-28761)) (iii) Unaudited Pro Forma Condensed Statement of Income for the six months ended June 30, 1997 (attached as Exhibit 99.5 hereto and incorporated herein by reference) (c) Exhibits Exhibit No. Description ----------- ----------- 2 Agreement and Plan of Merger dated as of March 14, 1997 between the Corporation and Security. (Incorporated by reference to the Corporation's Current Report on Form 8-K (File No. 0-1220) dated March 14, 1997) 23 Consent of KPMG Peat Marwick LLP 99.1 Audited Consolidated Statements of Financial Condition of Security as of June 30, 1997; Audited Consolidated Statements of Income of Security for year ended June 30, 1997; Audited Consolidated Statements of Cash Flows of Security for the year ended June 30, 1997; and Independent Auditors' Report of KPMG Peat Marwick LLP (Incorporated by reference to Security's Annual Report on Form 10-K (File No. 0-22588) for the Fiscal Year Ended June 30, 1997) 99.2 Unaudited Pro Forma Condensed Statement of Income for twelve months ended December 31, 1996 (Incorporated by reference to the Corporation's Registration Statement on Form S-4 (Reg. No. 333-28761)) 99.3 The following sections of the Corporation's Registration Statement on Form S-4 (Reg. No. 333-28761) which are incorporated herein by reference: "The Merger" and "Certain Related Transactions" 99.4 Press release dated October 1, 1997 announcing completion of the Corporation's Merger with Security 99.5 Unaudited Pro Forma Condensed Balance Sheet as of June 30, 1997 and Unaudited Pro Forma Condensed Statement of Income for the six months ended June 30, 1997 MW1-94865-1 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 3, 1997 MARSHALL & ILSLEY CORPORATION By: /s/ M.A. Hatfield ------------------------------------- M.A. Hatfield Secretary MW1-94865-1 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 2 Agreement and Plan of Merger dated as of March 14, 1997 between the Corporation and Security. (Incorporated by reference to the Corporation's Current Report on Form 8-K (File No. 0-1220) dated March 14, 1997) 23 Consent of KPMG Peat Marwick LLP 99.1 Audited Consolidated Statements of Financial Condition of Security as of June 30, 1997; Audited Consolidated Statements of Income of Security for year ended June 30, 1997; Audited Consolidated Statements of Cash Flows of Security for the year ended June 30, 1997; and Independent Auditors' Report of KPMG Peat Marwick LLP (Incorporated by reference to Security's Annual Report on Form 10-K (File No. 0-22588) for the Fiscal Year Ended June 30, 1997) 99.2 Unaudited Pro Forma Condensed Statement of Income for twelve months ended December 31, 1996 (Incorporated by reference to the Corporation's Registration Statement on Form S-4 (Reg. No. 333-28761)) 99.3 The following sections of the Corporation's Registration Statement on Form S-4 (Reg. No. 333-28761) which are incorporated herein by reference: "The Merger" and "Certain Related Transactions" 99.4 Press release dated October 1, 1997 announcing completion of the Corporation's Merger with Security 99.5 Unaudited Pro Forma Condensed Balance Sheet as of June 30, 1997 and Unaudited Pro Forma Condensed Statement of Income for the six months ended June 30, 1997 MW1-94865-1 EX-23 2 8-K DATED OCTOBER 3, 1997/EXHIBIT 23 Exhibit 23 Consent of Independent Certified Public Accountants The Board of Directors Security Capital Corporation: We consent to the inclusion of our report dated July 15, 1997, with respect to the consolidated statements of financial condition of Security Capital Corporation and Subsidiaries as of June 30, 1997 and 1996, and the related consolidated statements of income, stockholders' equity and cash flows for each of the years in the three-year period ended June 30, 1997, which report appears in the Form 8-K of Marshall & Ilsley Corporation dated October 1, 1997. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP Milwaukee, Wisconsin October 7, 1997 EX-99 3 8-K DATED OCTOBER 3, 1997/EXHIBIT 99.4 Exhibit 99.4 Company Press Release MARSHALL & ILSLEY CORPORATION COMPLETES MERGER WITH SECURITY CAPITAL CORPORATION MILWAUKEE -- (BUSINESS WIRE) -- Oct. 1, 1997 -- Marshall & Ilsley Corporation announced today the completion of its merger with Security Capital Corporation. According to the terms of the merger, Security Capital Corporation shareholders who have made a valid stock election will receive approximately 90 percent stock and 10 percent cash, which is equivalent to a stock distribution of 1.9494 shares of Marshall & Ilsley Corporation Common Stock and $10.92 in cash for each share of Security Capital Corporation Common Stock. The distribution will be adjusted as necessary to reflect the final election tabulation. As stipulated in the merger agreement, Security Capital Corporation shareholders who have made a cash election, no election, or who have not otherwise made a valid stock election will receive $111.06 in cash for each Security Capital Corporation share held. Those shareholders who chose the mixed election will receive the agreed upon 1.3561 shares of M&I stock and $41.40 cash for each of their Security shares. The transaction is structured as a tax-free exchange for the portion of the distribution that shareholders receive in stock. Marshall & Ilsley Corporation, headquartered in Milwaukee, Wisconsin, has $19 billion in assets. The Corporation has 26 affiliate banks in Wisconsin with more than 225 offices and a bank in Phoenix, Arizona with 12 offices. In addition, the holding company owns and operates 54 offices throughout the country that provide trust and investment management, equipment leasing, mortgage banking, venture capital and data processing. Marshall & Ilsley Corporation stock is traded on NASDAQ under the symbol "MRIS." ### - ------------------------------------- Contact: Marshall & Ilsley Corp., Milwaukee M.A. Hatfield, 414/765-7809 - ------------------------------------- MW1-94865-1 EX-99 4 8-K DATED OCTOBER 3, 1997/EXHIBIT 99.5 Exhibit 99.5 UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION The following unaudited Pro Forma Condensed Financial Information and explanatory notes are presented to show the impact on the historical financial position and results of operations of M&I from the Merger with Security. In accordance with the Merger Agreement, each share of Security's Common Stock outstanding will be converted in the Merger into the right to receive, at the election of the holder, M&I Common Stock or cash or some combination thereof provided that, the aggregate number of shares of M&I Common Stock issued in the Merger is equal to or nearly equal to 12,327,390 shares and the cash consideration is equal to or nearly equal to $376,335,605. The unaudited Pro Forma Condensed Financial Information reflects the Merger using the purchase method of accounting. The cash component of the purchase price was funded by the liquidation of investment securities held by Security as available for sale. The unaudited Pro Forma Condensed Balance Sheet assumes that the Merger was consummated on June 30, 1997. Certain amounts in Security's historical balance sheet as shown have been reclassified to conform to M&I's presentation. The unaudited Pro Forma Condensed Statements of Income assumes that the Merger was consummated on January 1, 1997 and reflects the consolidation of the results of operations of M&I and Security for the six months ended June 30, 1997. The unaudited Pro Forma Condensed Financial Information reflects the Merger based on preliminary purchase accounting adjustments. Estimates relating to the fair value of certain assets, liabilities and other items have been made as more fully described in the Notes to the unaudited Pro Forma Condensed Financial Information. Actual adjustments, which may include adjustments to additional assets, liabilities and other items, will be made on the basis of appraisals and evaluations as of October 1, 1997, and, therefore, will differ from those reflected in the unaudited Pro Forma Condensed Financial Information. Regulatory approvals of the Merger were conditioned upon divestitures of certain bank branches. No adjustment for divestitures has been included in the unaudited Pro Forma Condensed Financial Information. Seven branches with total deposits of approximately $128 million will be divested in conjunction with the Merger. The combined company expects to achieve substantial Merger benefits primarily in the area of operating cost savings. The unaudited pro forma earnings, which do not reflect any direct costs or potential savings which are expected to result from the consolidation of operations of M&I and Security, are not indicative of the results of future operations. No assurances can be given with respect to the ultimate level of expense savings to be realized. The following information should be read in conjunction with and is qualified in its entirety by the consolidated financial statements and accompanying notes of M&I and Security. The unaudited Pro Forma Condensed Financial Information is intended for information purposes and is not necessarily indicative of the future financial position or future results of the combined company or of the financial position or the results of operations of the combined company that would have actually occurred had the Merger been in effect as of the date or for the period presented. PRO FORMA CONDENSED BALANCE SHEET (Dollars in Thousands) (Unaudited)
At June 30, 1997 ---------------------------------------------------------------------------- M&I and Security Pro Forma Pro Forma M&I Security Combined Adjustments Combined ASSETS ------------ ------------ ------------ ------------------------ ------------ Cash and cash equivalents $930,595 $32,110 $962,705 $962,705 Trading securities & other short-term investments 88,713 -- 88,713 88,713 Investment securities: Available for sale 2,985,904 721,714 3,707,618 (376,336) (1)(2) 3,331,282 Held to maturity 850,339 -- 850,339 850,339 Loans and leases 9,912,723 2,820,456 12,733,179 40,050 (3) 12,773,229 Less: Allowance for loan losses 155,620 40,632 196,252 196,252 ------------ ------------ ------------ ------------ ------------ Net loans and leases 9,757,103 2,779,824 12,536,927 40,050 12,576,977 Premises and equipment, net 319,354 23,775 343,129 (6,170) (4) 336,959 Intangibles 71,263 2,479 73,742 318,325 (1)(3)(4)(5) 392,067 Other assets 411,393 125,002 536,395 8,023 (5) 544,418 ------------ ------------ ------------ ------------ ------------ Total Assets $15,414,664 $3,684,904 $19,099,568 ($16,108) $19,083,460 ============ ============ ============ ============ ============ LIABILITIES and SHAREHOLDERS' EQUITY Deposits Noninterest bearing $2,443,022 $58,009 $2,501,031 $2,501,031 Interest bearing 8,740,638 2,289,405 11,030,043 11,030,043 ------------ ------------ ------------ ------------ ------------ Total deposits 11,183,660 2,347,414 13,531,074 -- 13,531,074 Total borrowings 2,486,110 652,354 3,138,464 3,138,464 Accrued expenses and other liabilities 409,749 90,155 499,904 118,907 (1)(6) 618,811 ------------ ------------ ------------ ------------ ------------ Total liabilities 14,079,519 3,089,923 17,169,442 118,907 17,288,349 Shareholders' equity Preferred stock 685 -- 685 Common stock 99,494 10,810 110,304 1,518 (1) 111,822 Additional paid-in capital 207,901 261,630 469,531 189,784 (1) 659,315 Retained earnings 1,283,797 413,878 1,697,675 (413,878) (1) 1,283,797 Unrealized gain on securities available for sale, net of tax 28,008 10,072 38,080 (10,072) (1) 28,008 Less: Treasury stock, at cost 283,686 80,944 364,630 (80,944) (1) 283,686 Unearned ESOP Compensation -- 13,872 13,872 (13,872) (1) -- Other Deferred Compensation 1,054 6,593 7,647 (2,817) (1) 4,830 ------------ ------------ ------------ ------------ ------------ Total shareholders' equity 1,335,145 594,981 1,930,126 (135,015) 1,795,111 ------------ ------------ ------------ ------------ ------------ Total Liabilities and Shareholders' Equity $15,414,664 $3,684,904 $19,099,568 ($16,108) $19,083,460 ============ ============ ============ ============ ============ See Notes to the Unaudited Pro Forma Condensed Financial Information
PRO FORMA CONDENSED STATEMENT OF INCOME (Dollars in thousands, except per share data) (Unaudited)
For the six months ended June 30, 1997 ---------------------------------------------------------------------- M&I and Security Pro Forma Pro Forma M&I Security Combined Adjustments Combined ------------ ------------ ------------ -------------------- ------------ Interest income Loans and leases $399,215 $114,460 $513,675 ($1,430) (8) $512,245 Investment securities 119,916 23,048 142,964 (13,002) (9)(10) 129,962 Trading securities and other short-term investments 6,072 407 6,479 6,479 ------------ ------------ ------------ ------------ ------------ Total interest income 525,203 137,915 663,118 (14,432) 648,686 Interest expense: Deposits 193,039 54,123 247,162 247,162 Borrowings 69,282 19,186 88,468 88,468 ------------ ------------ ------------ ------------ ------------ Total interest expense: 262,321 73,309 335,630 -- 335,630 ------------ ------------ ------------ ------------ ------------ Net interest income 262,882 64,606 327,488 (14,432) 313,056 Provision for loan losses 8,617 -- 8,617 8,617 ------------ ------------ ------------ ------------ ------------ Net interest income after provision for losses 254,265 64,606 318,871 (14,432) 304,439 Other income Data processing services 162,421 -- 162,421 162,421 Trust services 37,729 -- 37,729 37,729 Securities gains (losses) 816 -- 816 Other,net 75,216 11,301 86,517 86,517 ------------ ------------ ------------ ------------ ------------ Total other income 276,182 11,301 287,483 -- 287,483 Other expense Salaries and employee benefits 213,264 18,667 231,931 231,931 Net occupancy 20,022 2,470 22,492 22,492 Equipment 42,442 1,274 43,716 43,716 Amortization 6,064 387 6,451 12,224 (11) 18,675 Other 81,502 12,129 93,631 93,631 ------------ ------------ ------------ ------------ ------------ Total other expense 363,294 34,927 398,221 12,224 410,445 ------------ ------------ ------------ ------------ ------------ Income before income taxes 167,153 40,980 208,133 (26,656) 181,477 Provision for income taxes 55,732 12,901 68,633 (8,474) (12) 60,159 ------------ ------------ ------------ ------------ ------------ Net income $111,421 $28,079 $139,500 ($18,182) $121,318 ============ ============ ============ ============ ============ Net Income Per Common Share (13): Primary $1.15 $3.00 $1.10 Fully diluted $1.14 $2.99 $1.09 See Notes to the Unaudited Pro Forma Condensed Financial information
NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION (Dollars in Thousands, Shares and Per Share Amounts Actuals) The unaudited Pro Forma Condensed Financial Information is based on the following adjustments and related assumptions. The actual purchase accounting adjustments will be made on the basis of appraisals and evaluations as of October 1, 1997, and, therefore, will differ from those reflected in the unaudited Pro Forma Condensed Financial Information. A summary of the purchase accounting adjustments to record the Merger used in preparation of the unaudited Pro Forma Condensed Balance Sheet is as follows:
Increase (Decrease) ------------------------------------------------------------------------------------------------------ Investment Accrued Adjustment Securities Premises and Expenses Reference Available Equipment, Other and Other Shareholders' Number For Sale Loans Net Intangibles Assets Liabilities Equity ---------- ------------ ------------ ------------ ------------- ----------- ----------- ------------- (1)(2) ($376,336) -- -- $227,449 -- ($13,872) ($135,015) (3) -- 40,050 -- (40,050) -- -- -- (4) -- -- (6,170) 6,170 -- -- -- (5) -- -- -- (8,023) 8,023 -- -- (6) -- -- -- 132,779 -- 132,779 -- ------------ ------------ ------------ ------------- ----------- ----------- ------------- ($376,336) $40,050 ($6,170) $318,325 $8,023 $118,907 ($135,015) ============ ============ ============ ============= =========== =========== =============
The purchase accounting adjustments to record the Merger used in the preparation of the unaudited Pro Forma Condensed Balance Sheets are:
June 30, 1997 --------------------------- (1) Security Capital Corporation at: Common Stock issued 10,810,000 Treasury stock to be canceled (1,601,668) Restricted stock unawarded to be canceled (112,700) ------------ Security Common Stock outstanding as adjusted (a) 9,095,632 Implied Exchange Ratio 1.3553 ------------ M&I Common Stock to be issued 12,327,390 ============ Assumed M&I Common Stock consideration $459,966 Cash Consideration 376,336 ------------ Assumed total consideration $836,302 Historical net assets acquired: Total stockholders' equity $594,981 Assumed payout of ESOP note payable 13,872 Accrue payout of nonqualified stock options (46,253) ------------ Assumed historical net assets acquired (b) 562,600 ------------ Assumed premium to allocate $273,702 ============ Adjustments to fair value of net assets acquired: Premises and equipment ($6,170) Loans 40,050 Other liabilities (86,526) Other assets 8,023 Intangibles 318,325 ------------ Assumed adjustments to fair value of net assets acquired $273,702 ============
(a) The number of shares of Security's Common Stock to be exchanged were those outstanding on October 1, 1997. The number of Security's shares outstanding on June 30, 1997, as adjusted, has been used in the pro forma computations. (b) The historical net assets acquired were determined as at October 1, 1997. The historical net assets, as adjusted, for Security as of June 30, 1997, has been used in the pro forma computations. NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION - (Continued) (2) The unaudited Pro Forma Condensed Financial Information assumes the funding of the cash component of the consideration is provided by the liquidation of investment securities available for sale. (3) Reflects the preliminary estimate of premium associated with establishing fair value for loans and leases. (4) Reflects the preliminary estimate of writedowns associated with duplicate facilities, equipment and leasehold interests to be disposed of. (5) Represents the estimated net tax asset associated with adjustments to fair value of net assets acquired and the accrued payout for nonqualified stock options assuming an income tax rate of 40% along with the write-down of prepaid expenses which have no future benefit. (6) Reflects the preliminary estimates of legal, accounting and investment bankers' fees associated with the Merger, costs to convert Security's processing systems to M&I systems, severance benefits associated with the elimination of duplicate employment positions at Security, incentive stock option plans which will roll into M&I and the accrued payout for nonqualified stock options. (7) Represents preliminary estimates of identifiable intangibles (mortgage servicing rights and core deposit premiums) and goodwill. Since the final determination of adjustments to assets and liabilities will be made based upon the fair values as of October 1, 1997, and after appraisals and evaluations are complete, the final amounts will differ from the estimates provided herein. The purchase accounting adjustments to record the Merger used in the preparation of the unaudited Pro Forma Condensed Statements of Income are summarized below: Six Months Ended June 30, 1997 -------------- (8) Reflects the estimated amortization of the premium related to loans and leases line basis over the estimated maturities of the affected loans and leases using average life of 14 years ($1,430) (9) Reflects the estimated reduction in interest income from investment securities liquidated to fund the cash component of the Merger consideration assuming an interest rate of 6.75% ($12,701) (10) Reflects the estimated amortization of the premium related to investment securities assumed to be retained on a straight-line basis over the estimated maturities of the affected securities using an estimated weighted average life of 3.4 years ($301) -------------- Estimated total impact on interest income ($14,432) ============== (11) Reflects the amortization of identifiable intangibles and goodwill assuming the following estimated lives (in years): Mortgage servicing 10 years accelerated $683 Core deposit premium 10 years accelerated 6,072 Goodwill 25 years straight-line 5,469 -------------- $12,224 ============== (12) Income tax expense on pro forma adjustments is reflected using a 40% tax rate. (13) The pro forma earnings per share include the effect of the adjustments described above, the issuance of 12,327,390 shares of M&I Common Stock and the common stock equivalents associated with incentive stock option plans which will roll into M&I and are assumed to be outstanding throughout the periods presented. -----END PRIVACY-ENHANCED MESSAGE-----