DEFA14A 1 fcb14a.txt SWDocID067452.00119/11201783v1 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [X] Soliciting Material Pursuant to ss.240.14a-12 FIRST COLONIAL GROUP, INC. -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials: [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ----------------------------------------- (2) Form, Schedule or Registration Statement No.: ----------------------------------------- (3) Filing Party: ----------------------------------------- (4) Date Filed: ----------------------------------------- The following is a press release issued by First Colonial Group, Inc. on April 17, 2003. First Colonial Group net income increases during first quarter of 2003 NAZARETH, Pa. -- First Colonial Group, Inc., the parent company of Nazareth National Bank, reported net income of $932,000 for the first quarter ended March 31, 2003, compared to net income of $811,000 for the same quarter of 2002, an increase of 14.9 percent. The $932,000 net income was a first-quarter record for the company. Basic net income per share in the first quarter of 2003 was $0.43; diluted net income per share was $0.41. Basic and diluted net income per share for the first quarter of 2002 was $0.37. (Per share data have been restated to reflect the 5 percent stock dividend of June 2002.) "We continue to see steady activity in our consumer, business, and trust and wealth management product lines," said Scott V. Fainor, president and chief executive officer. "Despite a slow-growth economy, low interest rates have continued to spur home mortgages, refinancing, and home equity products, all which have contributed to earnings. At the same time, families and businesses are seeking safe places for their money, given the volatility of the stock market. Our focus on community banking and excellent customer service has allowed us to capture a fair share of this business." Balance sheet benchmarks also saw growth. The company's assets rose to $620,718,000 as of March 31, 2003 and deposits increased to $483,377,000 on March 31, 2003. The first quarter of 2003 featured the landmark announcement that First Colonial Group had agreed to merge with Keystone Savings Bank in 2003 to form the region's largest locally owned and managed financial institution under a newly created bank holding company, KNBT Bancorp, Inc. The resulting community bank is expected to have 36 branches, more than 100,000 customers and assets near $1.6 billion when the transaction is complete, which is anticipated to occur by the end of 2003. As part of the announcement, both companies affirmed that their previously unveiled expansion plans would continue unabated. Nazareth National Bank embarked on its plan in the first quarter of 2003, breaking ground on its 18th branch, near the highly trafficked Route 248 and Route 33 exchange. And on March 28, the bank unveiled plans to open the first new bank branch in downtown Allentown in 30 years -- a 5,700-square-foot location in The Plaza at PPL Center, 9th and Hamilton. "The growth during the first quarter of 2003 and all of 2002 has enabled us to move forward as planned with our current and impending expansion," Fainor said. "The addition of new community branches will give us a stronger regional presence, especially in Lehigh County, and will offer greater coverage of our market area when combined with the Keystone locations." About First Colonial Group First Colonial Group, Inc. (NASDAQ: FTCG) with assets more than $620 million as of March 31, 2003, operates a one-bank subsidiary, Nazareth National Bank. The Bank provides a wide variety of retail, wholesale and trust & wealth management services to individuals, businesses and institutions. Operating 17 branches in the counties of Northampton, Lehigh and Monroe the company is headquartered in Nazareth, Pa., and has been in continuous operation since June 25, 1897. The proposed merger with Keystone Savings Bank will be submitted to First Colonial Group's shareholders for their consideration. KNBT Bancorp and First Colonial Group will file a registration statement, a proxy statement/prospectus and other relevant documents concerning the proposed transactions with the SEC. SHAREHOLDERS OF FIRST COLONIAL GROUP ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE ANDANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, BEFORE MAKING ANY DECISION REGARDING THE MERGER. Shareholders of First Colonial Group will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about KNBT Bancorp, Keystone Savings Bank and First Colonial Group, at the SEC's Internet site (http://www.sec.gov) after such documents are filed. Copies of the proxy statement/prospectus can be obtained, without charge, by directing a request to the Secretary of First Colonial, First Colonial Group, Inc., 76 South Main Street, Nazareth, Pennsylvania 18064 (610-861-5721). First Colonial Group and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Colonial Group in connection with the merger. Information about the directors and executive officers of First Colonial Group and their ownership of First Colonial Group common stock is set forth in First Colonial Group's Annual Report on Form 10-K for the year ended December 31, 2002, as filed with the SEC. Additional information about the interests of those participants may be obtained from reading the definitive proxy statement/prospectus regarding the proposed merger when it becomes available. "Safe Harbor" Statement Under Private Securities Litigation Reform Act of 1995 The information contained in the Press Release and other financial reports may contain forward looking statements (such as defined in the Securities Exchange Act of 1934 and the regulations thereof), including without limitation, the discussion of the planned merger with Keystone Savings Bank, statements as to the future loan and deposit volumes, future expansion plans, allowance and provision for possible loan losses, future interest rates and their effect on the Company's financial conditions or the results of operations, the classification of the Company's investment portfolio, statements as to litigation and the amount of reserves, statements as to trends and other statements which are not historical facts or as to the Company's, the Bank's or management's intentions, plans, beliefs, expectations or opinions. Such forward looking statements are subject to risks and uncertainties, and may be affected by various factors which may cause actual results to differ materially from those in the forward looking statements including, without limitation, the risk that the transactions contemplated by the agreement and plan of merger with Keystone Savings Bank may not be completed, the effect of economic conditions and related uncertainties, the effect of interest rates on the Company and the Bank, Federal and state government regulation, competition, changes in accounting standards and policies, results of litigation, and other risks. These and other risks, uncertainties and other factors are discussed in the Company's most recent Annual Report on Form 10-K, Quarterly Report on form 10-Q and other filings with the Securities and Exchange Commission, copies of which may be obtained from the Company upon request and without charge (except for the exhibits thereto) or can be accessed at the website maintained by the SEC at http://www.sec.gov. # # #
FIRST COLONIAL GROUP, INC. CONSOLIDATED BALANCE SHEET (Dollars in Thousands) (Unaudited) March 31, December 31, March 31, 2003 2002 2002 -------------------- ------------------- ------------------- ASSETS: Total Cash and Cash Equivalents $20,698 $22,741 $17,606 Interest-Bearing Deposits with Banks 10,547 5,002 19,401 Investment Securities Held-to-Maturity (Fair Value: Mar. 31, 2003 - $69.831; Dec. 31, 2002 - $30,791; Mar. 31, 2002 - $34,581) 69,461 30,297 34,452 Securities Available-for-Sale at Fair Value 254,930 283,481 167,669 Mortgage Loans Held-for-Sale 848 1,263 4,436 Total Loans 252,624 255,844 231,173 Less: Allowance for Possible Loan Losses (3,112) (3,084) (2,350) -------------------- ------------------- ------------------- Net Loans 249,512 252,760 228,823 Premises and Equipment, Net 6,399 6,375 6,339 Accrued Interest Income 2,914 3,142 2,996 Other Real Estate Owned 180 - 74 Other Assets 5,229 6,531 6,892 -------------------- ------------------- ------------------- TOTAL ASSETS $620,718 $611,592 $488,688 ==================== =================== =================== LIABILITIES: Deposits Non-Interest-Bearing Deposits $69,115 $64,150 $57,023 Interest-Bearing Deposits 414,262 408,648 343,152 -------------------- ------------------- ------------------- Total Deposits 483,377 472,798 400,175 Securities Sold Under Agreements to Repurchase 8,774 8,801 11,779 Long-Term Debt 67,039 67,921 34,892 Guaranteed Preferred Beneficial Interests in Company's Subordinated Debentures 15,000 15,000 - Accrued Interest Payable 3,167 3,129 3,868 Other Liabilities 2,873 3,629 2,891 -------------------- ------------------- ------------------- TOTAL LIABILITIES 580,230 571,278 453,605 -------------------- ------------------- ------------------- SHAREHOLDERS' EQUITY Preferred Stock, Par Value $5.00 - - - Authorized: 500,000 Shares, None Issued Common Stock, Par Value $5.00 11,199 11,090 10,524 Authorized: 10,000,000 Shares Issued: 2,239,861 Shares at Mar. 31, 2003; 2,217,971 Shares at Dec. 31, 2002; 2,100,060 Shares at Mar. 31, 2002 Additional Paid-In Capital 21,154 20,786 18,588 Retained Earnings 8,950 8,430 9,004 Less Treasury Stock at Cost: none at Mar. 31, 2003 and Dec. 31, 2002; and, 4,777 shares at Mar. 31, 2002 - - (120) Deferred Stock Compensation: none at Mar. 31, 2003; and, - (220) (220) 10,000 shares at Dec. 31, 2002 and Mar. 31, 2002 Employee Stock Ownership Plan Debt (1,093) (1,093) (1,235) Accumulated Other Comprehensive (Loss) Income 278 1,321 (1,458) -------------------- ------------------- ------------------- TOTAL SHAREHOLDERS' EQUITY 40,488 40,314 35,083 -------------------- ------------------- ------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $620,718 $611,592 $488,688 ==================== =================== ===================
FIRST COLONIAL GROUP, INC. CONSOLIDATED STATEMENT OF INCOME (Dollars in Thousands) (Uunaudited) Three Months Ended Mar. 31, Mar. 31, 2003 2002 -------------- --------------- INTEREST INCOME: Interest and Fees on Loans $4,176 $4,264 Interest on Investment Securities Taxable 2,758 2,368 Tax-Exempt 610 438 Interest on Deposits With Banks and Fed Funds Sold 35 40 -------------- --------------- Total Interest Income 7,579 7,110 -------------- --------------- INTEREST EXPENSE: Interest on Deposits 2,139 2,479 Interest on Short-Term Debt 27 58 Interest on Long-Term Debt 730 498 Interest on Trust-Preferred Securities 181 - -------------- --------------- Total Interest Expense 3,077 3,035 -------------- --------------- NET INTEREST INCOME 4,502 4,075 Provision for Possible Loan Losses 200 400 -------------- --------------- Net Interest Income After Provision For Possible Loan Losses 4,302 3,675 -------------- --------------- OTHER INCOME: Trust Revenue 285 284 Service Charges on Deposit Accounts 619 599 Investment Securities Gains, Net 765 369 Gain on Sale of Mortgage Loans 417 76 Other Operating Income 180 229 -------------- --------------- Total Other Income 2,266 1,557 ------------- ------------- OTHER EXPENSES: Salaries and Employee Benefits 2,576 2,047 Net Occupancy and Equipment Expense 643 666 Impairment of Mortgage Servicing Rights 637 - Other Operating Expenses 1,645 1,565 -------------- --------------- Total Other Expenses 5,501 4,278 -------------- --------------- Income Before Income Taxes 1,067 954 Applicable Income Taxes 135 143 -------------- --------------- NET INCOME $932 $811 ============== =============== PER SHARE DATA * Basic Net Income 0.43 0.37 Diluted Net Income 0.41 0.37 Cash Dividends 0.19 0.18 * Per share data has been restated to reflect the 5% stock dividend of June 2002.