-----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, LWhKf3vKFRGm7mVLkvSaqV/g5Fj6NeB+Fj5zRIouzGQF8umfJt6lR/MRqXsV3ubd i2/BNTm3EE/dY2mRysXZeQ== 0000741390-99-000005.txt : 19991018 0000741390-99-000005.hdr.sgml : 19991018 ACCESSION NUMBER: 0000741390-99-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991014 ITEM INFORMATION: FILED AS OF DATE: 19991014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAHASKA INVESTMENT CO CENTRAL INDEX KEY: 0000741390 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 421003699 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-24630 FILM NUMBER: 99728511 BUSINESS ADDRESS: STREET 1: 222 FIRST AVENUE EAST CITY: OSKALOOSA STATE: IA ZIP: 52577 BUSINESS PHONE: 5156738448 MAIL ADDRESS: STREET 1: 222 FIRST AVDNUE EAST CITY: OSKALOOSA STATE: IA ZIP: 52577 8-K 1 FORM 8-K FOR MAHASKA INVESTMENT CO. 10/14/99 Securities and Exchange Commission Washington, D.C. 20579 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) - September 30, 1999 MAHASKA INVESTMENT COMPANY (Exact name of registrant as specified in its charter) Iowa 0-24630 42-1003699 (State of other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 222 First Avenue East, Oskaloosa, Iowa 52577 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (515) 673-8448 Item 2. Acquisition or Disposition of Assets Effective September 30, 1999, Mahaska Investment Company (the Company) completed its acquisition of Midwest Bancshares, Inc. (Midwest). Midwest is a $165,000,000 thrift holding company headquartered in Burlington, Iowa and is the parent company of Midwest Federal Savings and Loan Association of Eastern Iowa (Midwest Federal). Under the terms of the transaction, Midwest shareholders received 1,105,348 shares of the Company's common stock in a tax-free exchange accounted for as a purchase transaction. Midwest Federal became a wholly- owned subsidiary of the Company and will retain the Midwest Federal name. The terms of the Agreement and Plan of Merger (the Merger) dated February 2, 1999, are incorporated by reference to the information contained in the Registration Statement No. 333- 79291 on Form S-4, as filed in connection with the Merger. Item 7. Financial Statements and Exhibits (a) Financial Statements The Company hereby incorporates by reference to Midwest's Annual Report on Form 10-KSB for the year ended December 31, 1998 the Consolidated Balance Sheets of Midwest as of December 31, 1998 and 1997 and Midwest's Consolidated Statement of Operations, Consolidated Statement of Stockholders' Equity and Comprehensive Income, and Consolidated Statement of Cash Flows for each of the years in the three-year period ended December 31, 1998. (b) Pro forma Financial Information The following pro forma financial information giving effect to the Merger is submitted herewith and is attached as Exhibit 99.1 to this Current Report on Form 8-K. (i) Pro forma Condensed Consolidated Statement of Financial Condition as of June 30, 1999. (ii) Pro forma Condensed Consolidated Statements of Income for the six months ended June 30, 1999 and 1998. (iii)Pro forma Condensed Consolidated Statement of Income for the year ended December 31, 1998. (c) Exhibits Exhibit No. Exhibit (23) Consent of Independent Auditors KPMG LLP. (99.1) Pro Forma Financial Information. SIGNATURE 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 thereunto duly authorized. Mahaska Investment Company By: /s/ David A. Meinert Name: David A. Meinert Title: Executive Vice President and Chief Financial Officer Date: October 14, 1999 EX-23 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors Mahaska Investment Company: We consent to the incorporation by reference in the Mahaska Investment Company Form 8-K dated October 14, 1999, our report dated January 22, 1999, except for note 16 which is as of February 2, 1999, relating to the consolidated balance sheets of Midwest Bancshares, Inc. and Subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of operations, stockholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 1998. Des Moines, Iowa October 14, 1999 EX-99.1 3 PRO FORMA CONDENSED CONSOLIDATED STATEMENT Exhibit 99.1
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME MAHASKA AND MIDWEST Six months ended June 30, 1999 (in thousands, except per share data) Pro Forma Acquisition Pro Forma Mahaska Midwest Adjustments Consolidated ------- ------ ----------- ------------ Interest income: Loans .......................... $ 7,765 $ 3,772 $ (40)(1) $11,497 Loan pool participations ....... 3,548 0 0 3,548 Bank deposits .................. 51 77 0 128 Federal funds sold ............. 174 0 0 174 Investment securities - available for sale............ 873 1,108 0 1,981 Investment securities - held to maturity .................. 367 708 (20)(2) 1,055 Total interest income .......... 12,778 5,665 (60) 18,383 Interest expense: Deposits ....................... 4,647 2,378 (317)(3) 6,708 Federal funds purchased ........ 4 0 0 4 FHLB advances .................. 217 1,192 122(4) 1,531 Notes payable .................. 599 0 0 599 Total interest expense ......... 5,467 3,570 (195) 8,842 Net interest income ............ 7,311 2,095 135 9,541 Provision for losses on loans 1,632 24 0 1,656 Net interest income after provision for losses on loans ........................ 5,679 2,071 135 7,885 Other income: Service charges ................ 617 203 0 820 Data processing ................ 101 0 0 101 Other operating ................ 224 13 0 237 Investment securities gains (losses) ..................... 0 7 0 7 Total other income ............. 942 223 0 1,165 Other expense: Salaries and employee benefits . 2,591 651 0 3,242 Occupancy ...................... 699 205 0 904 Professional fees .............. 425 42 0 467 Other operating ............... 1,265 493 0 1,758 Amortization of goodwill and other intangibles ............ 288 0 249(5,6) 537 Total other expense ............ 5,268 1,391 249 6,908 Income before income taxes 1,353 903 (114) 2,142 Income taxes ................... 515 236 0(7) 751 Net income ..................... $ 838 $ 667 $ (114) $ 1,391 Earnings per share: Basic .......................... $ 0.23 $ 0.61 $ 0.29 Diluted ........................ $ 0.22 $ 0.60 $ 0.29 Average weighted shares outstanding - basic .......... 3,644 1,099 4,743 Average weighted shares outstanding - diluted ........ 3,743 1,112 4,855
(1) Represents amortization of the loan fair value adjustment for six months using effective yield method. (2) Represents amortization of the held to maturity security fair value adjustment for six months using estimated useful life of 51 months. (3) Represents amortization of the deposit fair value adjustment for six months using effective yield method. (4) Represents amortization of the FHLB advance fair value adjustment for six months using effective yield method. (5) Represents amortization of the core deposit intangible adjustment for six months using effective yield method over 10 years. (6) Represents goodwill amortization for six months using straight-line method over 25 years. 7) Represents the income tax effect of the amortization of the purchase accounting adjustments, excluding goodwill, using the current effective tax rate. Exhibit 99.1
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME MAHASKA AND MIDWEST Six months ended June 30, 1998 (in thousands, except per share data) Pro Forma Acquisition Pro Forma Mahaska Midwest Adjustments Consolidated ------- ------- ----------- ------------ Interest income: Loans ........................ $ 7,052 $ 3,740 $ (40)(1) $10,752 Loan pool participations ..... 4,655 0 0 4,655 Bank deposits ................ 88 41 0 129 Federal funds sold ........... 223 0 0 223 Investment securities - available for sale ......... 778 1,312 0 2,090 Investment securities - held to maturity ........... 476 579 (20)(2) 1,035 Total interest income ........ 13,272 5,672 (60) 18,884 Interest expense: Deposits ..................... 4,386 2,463 (317)(3) 6,532 Federal funds purchased ...... 1 0 0 1 FHLB advances ................ 179 1,117 122(4) 1,418 Notes payable ................ 479 0 0 479 Total interest expense ....... 5,045 3,580 (195) 8,430 Net interest income .......... 8,227 2,092 135 10,454 Provision for losses on loans 287 24 0 311 Net interest income after provision for losses on loans ...................... 7,940 2,068 135 10,143 Other income: Service charges .............. 588 171 0 759 Data processing .............. 100 0 0 100 Other operating .............. 169 140 0 309 Investment securities gains (losses) ................... 26 97 0 123 Total other income ........... 883 408 0 1,291 Other expense: Salaries and employee benefits 2,330 704 0 3,034 Occupancy .................... 655 207 0 862 Professional fees ............ 249 35 0 284 Other operating .............. 895 477 0 1,372 Amortization of goodwill and other intangibles .......... 306 0 249(5,6) 555 Total other expense .......... 4,435 1,423 249 6,107 Income before income taxes ... 4,388 1,053 (114) 5,327 Income taxes ................. 1,584 333 0(7) 1,917 Net income ................... $ 2,804 $ 720 $ (114) $ 3,410 Earnings per share: Basic ........................ $ 0.76 $ 0.70 $ 0.72 Diluted ...................... $ 0.72 $ 0.65 $ 0.68 Average weighted shares outstanding - basic ........ 3,677 1,032 4,709 Average weighted shares outstanding - diluted ...... 3,881 1,102 4,983
(1) Represents amortization of the loan fair value adjustment for six months using effective yield method. (2) Represents amortization of the held to maturity security fair value adjustment for six months using estimated useful life of 51 months. (3) Represents amortization of the deposit fair value adjustment for six months using effective yield method. (4) Represents amortization of the FHLB advance fair value adjustment for six months using effective yield method. (5) Represents amortization of the core deposit intangible adjustment for six months using effective yield method over 10 years. (6) Represents goodwill amortization for six months using straight-line method over 25 years. (7) Represents the income tax effect of the amortization of the purchase accounting adjustments, excluding goodwill, using the current effective tax rate. Exhibit 99.1
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME MAHASKA AND MIDWEST Twelve months ended December 31, 1998 (in thousands, except per share data) Pro Forma Acquisition Pro Forma Mahaska Midwest Adjustments Consolidated ------- ------- ----------- ------------ Interest income: Loans ........................ $ 15,026 $ 7,537 $ (77)(1) $ 22,486 Loan pool participations ..... 7,970 0 0 7,970 Bank deposits ................ 122 100 0 222 Federal funds sold ........... 338 0 0 338 Investment securities - available for sale ......... 1,617 2,362 0 3,979 Investment securities - held to maturity ........... 893 1,343 (40)(2) 2,196 Total interest income ........ 25,966 11,342 (117) 37,191 Interest expense: Deposits ..................... 8,999 4,925 (465)(3) 13,459 Federal funds purchased ...... 12 0 0 12 FHLB advances ................ 405 2,302 243(4) 2,950 Notes payable ................ 1,074 0 0 1,074 Total interest expense ....... 10,490 7,227 (222) 17,495 Net interest income .......... 15,476 4,115 105 19,696 Provision for losses on loans 1,179 48 0 1,227 Net interest income after provision for losses on loans ...................... 14,297 4,067 105 18,469 Other income: Service charges .............. 1,215 376 0 1,591 Data processing .............. 195 0 0 195 Other operating .............. 389 170 0 559 Investment securities gains (losses) ................... 58 118 0 176 Total other income ........... 1,857 664 0 2,521 Other expense: Salaries and employee benefits 4,796 1,349 0 6,145 Occupancy .................... 1,349 423 0 1,772 Professional fees ............ 394 84 0 478 Other operating .............. 1,797 954 0 2,751 Amortization of goodwill and other intangibles .......... 612 0 483(5,6) 1,095 Total other expense .......... 8,948 2,810 483 12,241 Income before income taxes ... 7,206 1,921 (378) 8,749 Income taxes ................. 2,583 549 -55(7) 3,077 Net income ................... $ 4,623 $ 1,372 $ (323) $ 5,672 Earnings per share: Basic ........................ $ 1.26 $ 1.31 $ 1.20 Diluted ...................... $ 1.20 $ 1.25 $ 1.15 Average weighted shares outstanding - basic ........ 3,660 1,048 4,708 Average weighted shares outstanding - diluted ...... 3,842 1,102 4,944
(1) Represents amortization of the loan fair value adjustment for twelve months using effective yield method. (2) Represents amortization of the held to maturity security fair value adjustment for twelve months using estimated useful life of 51 months. (3) Represents amortization of the deposit fair value adjustment for twelve months using effective yield method. (4) Represents amortization of the FHLB advance fair value adjustment for twelve months using effective yield method. (5) Represents amortization of the core deposit intangible adjustment for twelve months using effective yield method over 10 years. (6) Represents goodwill amortization for twelve months using straight-line method over 25 years. (7) Represents the income tax effect of the amortization of the purchase accounting adjustments, excluding goodwill, using the current effective tax rate. Exhibit 99.1
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION MAHASKA AND MIDWEST As of June 30, 1999 (in thousands, except per share data) Pro Forma Acquisition Pro Forma Mahaska Midwest Adjustments Consolidated ------- -------- ----------- ------------ ASSETS: Cash and due from bank $ 8,210 $1,257 $ 0 $ 9,467 Interest-bearing deposits in banks 111 814 0 925 Federal funds sold 0 0 0 0 Cash and cash equivalen $ 8,321 $2,071 0 $10,392 Investment securities: Available for sale 27,286 38,685 0 65,971 Held to maturity 13,507 21,601 143(1) 35,251 Net loans 174,388 98,794 556(1) 273,738 Loan pool participations 62,446 0 0 62,446 Premises and equipment, net 3,918 2,394 0 6,312 Accrued interest receivable 2,885 1,386 0 4,271 Core deposit intangible 277 0 1,273(1) 1,550 Unamortized goodwill 4,985 0 5,767(2) 10,752 Other assets 2,456 335 0 2,791 Total assets $ 300,469 $ 165,266 $ 7,739 $473,474 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand $ 19,665 $ 616 $ 0 $ 20,281 NOW and Super NOW 31,582 7,713 0 39,295 Savings 69,499 26,281 0 95,780 Certificates of deposit 114,402 73,285 665(1) 188,352 Total deposits 235,148 107,895 665 343,708 Federal funds purchased 2,898 0 0 2,898 Federal Home Loan Bank advances 7,581 44,000 (1,240)(1) 50,341 Notes payable 14,600 0 0 14,600 Other liabilities 2,291 1,063 2,025(1)(3) 5,379 Total liabilities 262,518 152,958 1,450 416,926 Shareholders' equity: Common stock 19,038 11 5,516(4) 24,565 Capital surplus 0 1,886 11,184(4) 13,070 Treasury stock at cost (2,425) 0 0 (2,425) Retained earnings 21,445 10,375 (10,375)(4) 21,445 Accumulated other comprehensive income (107) 36 (36)(4) (107) Total shareholders' equity 37,951 12,308 6,289 56,548 Total liabilities and share- holders' equity $300,469 $165,266 $7,739 $473,474 Book value per common share $ 10.37 $ 11.13 $ 11.87 Tangible book value per share $ 8.93 $ 11.13 $ 9.29 Total Shares Outstanding 3,659 1,105 4,764
(1) Represents the mark-to-market adjustments to reflect the fair value of the Midwest tangible and identifiable intangible assets acquired and the liabilities assumed under the purchase method of accounting. Assets adjusted include investment securities, loans, and core deposit intangible. Liabilities adjusted include certificates of deposit, Federal Home Loan Bank advances. Deferred income tax liabilities have been established relating to these mark-to-market adjustments. (2) Represents the excess of market value of the Mahaska stock issued to acquire Midwest, plus transaction costs, over the fair value of the tangible and identifiable intangible assets acquired and the fair value of the liabilities assumed under the purchase method of accounting. (3) Represents the expected costs to effect the merger. These costs are estimated to be approximately $1,07'5,000 which includes $865,000 of transaction costs (including legal, accounting, and investment advisor fees) and $210,000 related to termination of employment agreements. and investment advisor fees) and $210,000 related to termination of employment agreements. (4) Represents the market value of the Mahaska stock issued to acquire Midwest plus the elimination of Midwest's stockholders' equity under the purchase method of accounting. This adjustment is based on the issuance of 1,105,348 shares of Mahaska common stock at the average market price of the stock ($16.825) during the period immediately preceding and following the public announcement of the merger. -----END PRIVACY-ENHANCED MESSAGE-----