-----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, CpOMV8Lxq5SaQPccddfHiucrhSZKLTIjnLn2av2zMAAR0Ldo4Ua59XFbfagZCBMj CfQrx6gwZoNIy/85ywFLiw== 0000912057-96-014738.txt : 19960717 0000912057-96-014738.hdr.sgml : 19960717 ACCESSION NUMBER: 0000912057-96-014738 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19960701 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960716 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CFX CORP CENTRAL INDEX KEY: 0000800042 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 020402421 STATE OF INCORPORATION: NH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10633 FILM NUMBER: 96595362 BUSINESS ADDRESS: STREET 1: 102 MAIN ST CITY: KEENE STATE: NH ZIP: 03431 BUSINESS PHONE: 6033522502 MAIL ADDRESS: STREET 1: 194 WEST STREET STREET 2: P O BOX 429 CITY: KEENE STATE: NH ZIP: 03431 FORMER COMPANY: FORMER CONFORMED NAME: CHESHIRE FINANCIAL CORP DATE OF NAME CHANGE: 19920703 8-K 1 8-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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): JULY 1, 1996 CFX CORPORATION --------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEW HAMPSHIRE 1-10633 02-0402421 (State or other (Commission (I.R.S. employer jurisdiction file number) identification of incorporation) no.)
102 MAIN STREET, KEENE, NEW HAMPSHIRE (Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (603) 352-2502 NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. CONSUMMATION OF MERGER TRANSACTIONS On July 1, 1996, the Registrant consummated the following previously announced transactions: (1) the merger of The Safety Fund Corporation, a Massachusetts corporation headquartered in Fitchburg, Massachusetts ("Safety Fund"), with and into the Registrant through a series of intermediate transactions (the "Safety Fund Merger"); and (2) the merger of Milford Co-operative Bank, a New Hampshire state chartered co-operative bank headquartered in Milford, New Hampshire ("Milford"), with and into Registrant's wholly owned subsidiary, CFX Bank, a New Hampshire state chartered savings bank headquartered in Keene, New Hampshire (the "Milford Merger"). The consummation of the foregoing transactions is discussed in a press release attached hereto as Exhibit 99.1. THE SAFETY FUND MERGER In the Safety Fund Merger, each of Safety Fund's 1,665,000 outstanding shares of common stock (including all related preferred stock purchase rights) was converted into 1.700 shares of the Registrant's common stock and cash in lieu of fractional shares. At the closing, Safety Fund had total assets of approximately $297.1 million and total deposits of approximately $252.5 million. The transaction was accounted for as a pooling of interests. Safety Fund National Bank, Fitchburg, Massachusetts, Safety Fund's principal subsidiary, will continue to operate under its present name and charter as a wholly owned subsidiary of the Registrant. Immediately following the closing, in accordance with the Agreement and Plan of Merger dated January 5, 1996 by and between the Registrant and Safety Fund (the "Safety Fund Merger Agreement"), the following directors of Safety Fund were appointed to the Registrant's board of directors, increasing the number of Registrant's directors from 11 to 15: Christopher W. Bramley, P. Kevin Condron, William E. Aubuchon, III, and David R. Grenon. The Safety Fund Merger Agreement was previously filed as Exhibit 2 of the Registrant's Schedule 13D filed on January 16, 1996 with respect to Safety Fund's common stock and incorporated by reference as Exhibit 2 of the Registrant's Current Report on Form 8-K dated January 16, 1996. On March 28, 1996, the Registrant and Safety Fund executed an amendment to the Safety Fund Merger Agreement deleting Section 2.6 of the Safety Fund Merger Agreement, relating to additional merger consideration, and making certain other conforming changes. The amendment is attached hereto as Exhibit 2.1. On April 30, 1996, the Registrant and Safety Fund executed a second amendment to the Safety Fund Merger Agreement correcting certain scrivener's errors in Section 6.13 of the Safety Fund Merger Agreement. The second amendment is attached hereto as Exhibit 2.2. On June 15, 1996, as contemplated by the Safety Fund Merger Agreement, CFX Acquisition Corporation, a wholly owned subsidiary of the Registrant formed solely for the purpose of facilitating the Safety Fund Merger, executed a joinder to the Safety Fund Merger Agreement, which joinder was consented to by the Registrant and Safety Fund. The joinder is attached hereto as Exhibit 2.3. THE MILFORD MERGER In the Milford Merger, each of Milford's 689,000 shares of common stock outstanding was converted into 2.6446 shares of the Registrant's common stock and cash in lieu of fractional shares. At the closing, Milford had total assets of approximately $160.1 million and total deposits of approximately $141.3 million. The transaction was accounted for as a pooling of interests. Upon consummation of the Milford Merger, Milford was merged with and into CFX Bank, and Milford ceased operating under its own name and charter. On June 25, 1996, prior to the consummation of the Milford Merger and consistent with Milford's prior practices, Milford declared a regular semi-annual dividend in the amount of $0.45 per share of Milford common stock outstanding as of record on June 28, 1996. The Agreement and Plan of Merger dated February 9, 1996 by and between CFX Bank and Milford and joined in by the Registrant (the "Milford Merger Agreement"), and a related Agreement 2 and Plan of Reorganization dated February 9, 1996 by and among the Registrant, CFX Bank and Milford (the "Milford Reorganization Agreement"), were previously filed as Exhibits 2.1 and 2.2, respectively, to the Registrant's Current Report on Form 8-K dated February 16, 1996. The Registrant and Milford executed an amendment to the Milford Reorganization Agreement on April 29, 1996, making certain technical corrections to the Milford Reorganization Agreement. The amendment is attached hereto as Exhibit 2.4. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) FINANCIAL STATEMENTS. (1) Audited financial statements of Safety Fund as of December 31, 1995 and 1994 and for the years ended December 31, 1995, 1994 and 1993, and the independent auditors' reports thereon, were previously included on pages F-1 through F-36 of the Registrant's definitive proxy statement for the 1996 annual meeting of the Registrant's shareholders and were incorporated by reference into Part III of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (2) Unaudited interim financial statements of Safety Fund as of March 31, 1996 and 1995 and for the quarters then ended are filed herewith as Exhibit 99.2. (3) Audited financial statements of Milford as of June 30, 1995 and 1994 and for the years ended June 30, 1995, 1994 and 1993, and the independent auditors' reports thereon, and the unaudited interim financial statements of Milford as of December 31, 1995 and December 31, 1994 and for the six months then ended, were previously filed as Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated April 12, 1996. (4) Unaudited interim financial statements of Milford as of March 31, 1996 and 1995 and the nine months then ended are filed herewith as Exhibit 99.3. (b) PRO FORMA FINANCIAL INFORMATION. (1) Unaudited pro forma combined financial information as of December 31, 1995 and for the years ended December 31, 1995, 1994 and 1993, giving effect to the Safety Fund Merger and the Milford Merger, were previously included on pages 46-53 of the Registrant's definitive proxy statement for the 1996 annual meeting of the Registrant's shareholders and were incorporated by reference into Part III of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (2) Unaudited pro forma combined financial information as of March 31, 1996 and for the three months ended March 31, 1996 and 1995, giving effect to the Safety Fund Merger and the Milford Merger, are filed herewith as Exhibit 99.4. (c) Exhibits. 2.1 First Amendment to the Safety Fund Merger Agreement dated March 28, 1996. 2.2 Second Amendment to the Safety Fund Merger Agreement dated April 30, 1996. 2.3 Joinder to the Safety Fund Merger Agreement dated June 15, 1996. 2.4 Amendment to the Milford Reorganization Agreement dated April 29, 1996. 99.1 Press Release dated July 1, 1996 99.2 Unaudited interim financial statements of Safety Fund as of March 31, 1996. 99.3 Unaudited interim financial statements of Milford as of March 31, 1996. 99.4 Unaudited pro forma combined financial information as of March 31, 1996 and for the three months ended March 31, 1996 and 1995, giving effect to the Safety Fund Merger and the Milford Merger.
3 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, thereunto duly authorized. CFX CORPORATION Date: July 16, 1996 By: /s/ Mark A. Gavin -------------------------------------------- Mark A. Gavin, CHIEF FINANCIAL OFFICER
4 EXHIBIT INDEX
LOCATION IN SEQUENTIALLY NUMBERED COPY - ----------------- 2.1 First Amendment to the Safety Fund Merger Agreement dated March 28, 1996. 2.2 Second Amendment to the Safety Fund Merger Agreement dated April 30, 1996. 2.3 Joinder to the Safety Fund Merger Agreement dated June 15, 1996. 2.4 Amendment to the Milford Reorganization Agreement dated April 29, 1996. 99.1 Press Release dated July 1, 1996. 99.2 Unaudited interim financial statements of Safety Fund as of March 31, 1996. 99.3 Unaudited interim financial statements of Milford as of March 31, 1996. 99.4 Unaudited pro forma combined financial information as of March 31, 1996 and for the three months ended March 31, 1996 and 1995, giving effect to the Safety Fund Merger and the Milford Merger.
5 EX-2.1 2 EXH-2.1 EXHIBIT 2.1 FIRST AMENDMENT TO THE SAFETY FUND MERGER AGREEMENT The Safety Fund Corporation 470 Main Street Fitchburg, Massachusetts 01420 March 28, 1996 CFX Corporation 102 Main Street Keene, New Hampshire 03431 Attention: Mark A. Gavin Chief Financial Officer Re: Amendment to Agreement and Plan of Merger Ladies and Gentlemen: Reference is made to that certain Agreement and Plan of Merger dated as of January 5, 1996 (the "Agreement"), by and between CFX Corporation, a New Hampshire corporation, and The Safety Fund Corporation, a Massachusetts corporation. Capitalized terms used but not defined herein shall have the meanings defined in the Agreement. We have discussed the need to amend the Agreement so as to eliminate provisions for "Additional Merger Consideration", as provided in Section 2.6 of the Agreement. We propose the following: 1. DELETION AND RENUMBERING. Section 2.6 of the Agreement is deleted in its entirety, and Sections 2.7 through 2.12, respectively, are hereby renumbered as Sections 2.6 through 2.11. All cross references to Section 2.6 are hereby deleted, and all cross references to former Sections 2.7 through 2.12 shall be appropriately renumbered. 2. AMENDMENT TO SECTION 3.3. Section 3.3 of the Agreement is amended by deleting the words "two-thirds" in the fourth sentence thereof and replacing them with the words "a majority." 3. SCHEDULE A. Attached hereto for the convenience of the parties as Schedule A are the pages of the Agreement affected by this Amendment Agreement, with the changes marked. Deletions appear as struck-through text surrounded by [ ], and additions appear as double underlined text. 4. NO OTHER AMENDMENTS. Except as specifically amended hereby, the Agreement shall remain in full force and effect. 5. COUNTERPARTS. This Amendment Agreement may be executed in one or more counterparts all of which shall be considered one and the same agreement and each of which shall be deemed an original. We would appreciate your indicating your concurrence that the foregoing represents our mutual agreement by countersigning below and returning a copy of this Amendment Agreement to the undersigned. THE SAFETY FUND CORPORATION By: ____/s/_Christopher W. Bramley____ Christopher W. Bramley PRESIDENT 6 By: ____/s/_Martin F. Connors, Jr.____ Martin F. Connors, Jr. TREASURER Accepted and agreed to: CFX CORPORATION By: ________/s/_Peter J. Baxter_______ Peter J. Baxter PRESIDENT AND CHIEF EXECUTIVE OFFICER 7 EX-2.2 3 EX-2.2 EXHIBIT 2.2 SECOND AMENDMENT TO THE SAFETY FUND MERGER AGREEMENT THE SAFETY FUND CORPORATION 470 MAIN STREET FITCHBURG, MASSACHUSETTS 01420 APRIL 30, 1996 Peter J. Baxter President and Chief Executive Officer CFX Corporation 102 Main Street Keene, New Hampshire 03431 Dear Peter: We have discussed the need to further correct a scrivener's error in the Agreement and Plan of Merger by and between Safety Fund and CFX (the "AGREEMENT"). We have agreed that Section 6.13 of the Agreement shall be amended to add the following (inadvertently deleted) language immediately after the word "Agreement" in the final line of Section 6.13: ", and (iv) Buyer Sub to execute one or more counterparts of this Agreement and to deliver at least one such counterpart so executed to Safety Fund, whereupon Buyer Sub shall become a party to and be bound by this Agreement.". We would appreciate your indicting your concurrence that this correction should be made by countersigning below and returning a copy of this letter to the address above. THE SAFETY FUND CORPORATION By: ____/s/_Christopher W. Bramley____ Christopher W. Bramley PRESIDENT By: ____/s/_Martin F. Connors, Jr.____ Martin F. Connors, Jr. TREASURER Accepted and agreed to: CFX CORPORATION __________/s/_Peter J. Baxter_________ Peter J. Baxter PRESIDENT AND CHIEF EXECUTIVE OFFICER 8 EX-2.3 4 EX-2.3 EXHIBIT 2.3 JOINDER IN AGREEMENT AND PLAN OF MERGER JOINDER IN AGREEMENT AND PLAN OF MERGER dated as of June 15, 1996 ("Joinder"), by CFX Acquisition Corporation, a Massachusetts corporation (the "Corporation"), and agreed to by CFX Corporation, a New Hampshire corporation ("CFX"), and The Safety Fund Corporation, a Massachusetts corporation ("Safety Fund"). WHEREAS, CFX and Safety Fund entered into an Agreement and Plan of Merger (the "Merger Agreement") on January 5, 1996. WHEREAS, the Merger Agreement was subsequently amended by CFX and Safety Fund on March 28 and April 30, 1996 by written amendments (the "Amendments"). WHEREAS, the Merger Agreement contemplates the formation of the Corporation and the merger of the Corporation with and into Safety Fund (the "Merger") and the subsequent merger of the surviving corporation with and into CFX. WHEREAS, the Corporation was organized as a wholly owned direct subsidiary of CFX and was formed solely for the purpose of facilitating the Merger. NOW, THEREFORE, in consideration of the covenants, representations, warranties and agreements contained in the Merger Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Corporation hereby agrees as follows: 1. JOINDER. The Corporation agrees to be bound by the terms and conditions of the Merger Agreement, as amended by the Amendments and any other amendments thereto. The Corporation intends that the execution of this Joinder shall be deemed an execution of the Merger Agreement and each of the Amendments as fully as if executed by the Corporation on the original of the Merger Agreement and the Amendments. 2. CONSENT. By executing this Joinder, each of CFX and Safety Fund consents and agrees to the Corporation's joinder in the Merger Agreement and the Amendments. 3. NOTICES. All notices to the Corporation under Section 12.4 of the Merger Agreement shall be sent to the Corporation in care of, and to the address specified for, CFX. 4. COUNTERPARTS. This Joinder may be executed in one or more counterparts all of which shall be considered one and the same agreement and each of which shall be deemed an original. IN WITNESS WHEREOF, the Corporation has executed this Joinder as of the day and year first written above. CFX ACQUISITION CORPORATION By: ________/S/_MARK A. GAVIN_______ Mark A. Gavin PRESIDENT AND CHIEF EXECUTIVE OFFICER TREASURER AND CHIEF FINANCIAL OFFICER 9 AGREED TO BY: CFX CORPORATION THE SAFETY FUND CORPORATION By: /S/ PETER J. BAXTER By: /S/ CHRISTOPHER W. BRAMLEY Peter J. Baxter Christopher W. Bramley PRESIDENT AND CHIEF EXECUTIVE OFFICER PRESIDENT AND CHIEF EXECUTIVE OFFICER By: /S/ MARTIN F. CONNORS, JR. Martin F. Connors, Jr. TREASURER
10 EX-2.4 5 EX-2.4 EXHIBIT 2.4 AMENDMENT TO THE MILFORD REORGANIZATION AGREEMENT AMENDMENT NO. 1 Pursuant to the provisions of Section 6.5 of the Agreement and Plan of Reorganization (the "Agreement) dated as of February 9, 1996 by and among Milford Cooperative Bank ("Milford") and CFX Corporation ("CFX") and CFX Bank ("CFX Bank"), the parties hereby wish to amend the Agreement, as appropriate, to include references to Milford's present legal counsel. Accordingly, Section 7.4 is hereby revised to replace the references to Milford's legal counsel as follows: Thacher Proffitt & Wood 1500 K Street, N.W. Suite 200 Washington, D.C. 20005 Attn: Richard A. Schaberg, Esq. Telephone: (202) 347-8400 Facsimile No.: (202) 347-5862 or (202) 347-6238 Additionally, Section 5.3(f) of the Agreement is hereby revised to read as follows: f) CFX and Bank shall have received an opinion of Thacher Proffitt & Wood, counsel to Milford, dated the Closing Date, as to such matters as CFX and Bank may reasonably request with respect to the transactions contemplated hereby. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this amendment to the Agreement to be executed in counterparts by their duly authorized officers and their corporate seal to be hereunto affixed and attested by their officers thereunto duly authorized, all as of the date and year first above written. MILFORD CO-OPERATIVE BANK By: ______/s/_Richard D. D'Amato______ Richard D. D'Amato PRESIDENT AND CHIEF EXECUTIVE OFFICER CFX CORPORATION By: _________/s/_Mark A. Gavin________ CFX BANK By: _________/s/_Mark A. Gavin________ 11 EX-99.1 6 EX-99.1 EXHIBIT 99.1 CFX CORPORATION COMPLETES SAFETY FUND AND MILFORD CO/OPERATIVE MERGERS KEENE, NH, JULY 1, 1996 -- CFX CORPORATION (AMEX: CFX) ANNOUNCED THAT IT COMPLETED ITS MERGERS WITH THE SAFETY FUND CORPORATION AND MILFORD CO/OPERATIVE BANK. Pursuant to the definitive agreements, each of Safety Fund's 1,665,000 outstanding and Milford's 689,000 outstanding shares of common stock were converted into 1.7 shares and 2.6446 shares, respectively, of the Company's common stock, resulting in the issuance of 2,831,000 shares and 1,823,000 shares, respectively, of the Company's common stock to Safety Fund and Milford shareholders. Cash will be paid in lieu of issuing fractional shares. The Milford Co/operative was a state-chartered co/operative bank, headquartered in Milford, New Hampshire. Milford was merged into CFX's New Hampshire banking subsidiary, CFX Bank in the merger. The Safety Fund Corporation was a bank holding company headquartered in Fitchburg, Massachusetts. Safety Fund's subsidiary bank, Safety Fund National Bank, will continue to operate as a subsidiary of CFX. Both the Safety Fund and Milford mergers will be accounted for by the pooling-of-interests method of accounting. Peter J. Baxter, President and Chief Executive Officer of CFX Corporation said, "We welcome the shareholders, customers and employees of Safety Fund and Milford to the CFX family of community banks. As a combined company, all customers will share in the many benefits of a larger and more diversified community banking company." CFX Corporation is a multi-bank holding company with total assets of $1.4 billion following the mergers. The Company's three banking subsidiaries are CFX Bank, headquartered in Keene, New Hampshire, Orange Savings Bank, headquartered in Orange, Massachusetts, and The Safety Fund National Bank, headquartered in Fitchburg, Massachusetts. CFX Mortgage, Inc., CFX Bank's mortgage banking subsidiary, services approximately $686 million in mortgage loans for others. The Company operates 41 full service offices, 2 loan production offices, and 61 automated teller and remote service banking locations in New Hampshire and north central Massachusetts, and operates a trust division with $349 million in assets under management. ### 12 EX-99.2 7 EX-99.2 EXHIBIT 99.2 UNAUDITED INTERIM FINANCIAL STATEMENTS OF SAFETY FUND AS OF MARCH 31, 1996 13 THE SAFETY FUND CORPORATION CONSOLIDATED BALANCE SHEETS _______________________________________________________________________________
MARCH 31, DECEMBER 31, 1996 1995 ------------------------------ ASSETS Cash and due from banks $ 11,273,097 $ 13,305,505 Federal funds sold 7,300,000 2,500,000 Investment securities available for sale (amortized cost of $55,838,968 in 1996 and $62,427,502 in 1995) 56,340,118 63,737,909 Investment securities held to maturity (market value of $57,853,257 in 1996 and $41,024,069 in 1995) 58,291,919 39,924,078 Loans 155,191,032 160,433,831 Less allowance for possible loan losses (6,977,286) (7,350,150) ------------------------------ Net loans 148,213,746 153,083,681 ------------------------------ Premises and equipment, net 9,392,499 9,638,596 Accrued interest receivable 2,886,491 2,473,884 Other real estate owned, net 151,809 50,000 Deferred income tax asset, net 2,055,393 1,665,799 Other assets 1,235,134 1,103,800 ------------------------------ Total assets $297,140,206 $287,483,252 ============================== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Interest bearing $187,001,375 $184,897,462 Noninterest bearing 65,510,848 67,891,000 ------------------------------ Total deposits 252,512,223 252,788,462 Securities sold under repurchase agreements 18,617,807 11,119,611 Treasury tax and loan notes 3,304,639 1,156,804 Other liabilities 1,243,320 1,031,315 ------------------------------ Total liabilities 275,677,989 266,096,192 ------------------------------ Commitments and contingencies Stockholders' equity: Preferred stock, $10 par value; 100,000 shares authorized, none issued Common stock, $5 par value; 3,200,000 shares authorized 1,660,665 issued and outstanding 8,303,325 8,303,325 Surplus 7,584,846 7,584,846 Retained earnings 5,380,304 4,815,433 Net unrealized gain on investment securities available for sale 193,742 683,456 ------------------------------ Total stockholders' equity 21,462,217 21,387,060 ------------------------------ Total liabilities and stockholders' equity $297,140,206 $287,483,252 ==============================
-1- THE SAFETY FUND CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS ________________________________________________________________________________
THREE MONTHS ENDED MARCH 31, 1996 1995 ---------------------------- Interest income: Interest on loans $3,641,350 $3,467,820 Interest and dividends on investment securities: Available for sale 910,897 840,597 Held to maturity 866,066 794,874 Interest on federal funds sold 43,353 20,385 ---------------------------- Total interest income 5,461,666 5,123,676 ---------------------------- Interest expense: Interest on deposits 1,798,024 1,554,336 Interest on borrowed funds 168,771 191,092 ---------------------------- Total interest expense 1,966,795 1,745,428 ---------------------------- Net interest income 3,494,871 3,378,248 Provision for possible loan losses 75,000 525,000 ---------------------------- Net interest income after provision for possible loan losses 3,419,871 2,853,248 ---------------------------- Noninterest income: Trust fees 559,051 519,462 Service fees 294,252 258,383 Gains on loans sold, net 0 709 Gains on sales of investment securities available for sale, net 0 781 Other 235,126 160,733 ---------------------------- Total noninterest income 1,088,429 940,068 ---------------------------- Noninterest expense: Salaries and wages 1,451,452 1,474,866 Employee benefits 348,229 339,678 Occupancy, net 266,418 258,405 Equipment 290,001 292,738 Professional fees 195,026 198,059 Marketing 144,972 162,013 Expenses related to proposed merger 324,873 0 Deposit insurance 18,066 141,852 Other real estate owned, net 30,371 17,574 Directors' fees 64,800 61,300 Other 484,221 498,049 ---------------------------- Total noninterest expense 3,618,429 3,444,534 ---------------------------- Income before income taxes 889,871 348,782 Income tax expense 325,000 130,800 ---------------------------- Net income $ 564,871 $ 217,982 ============================ Net income per common share $.34 $.13 Weighted average shares outstanding 1,660,665 1,657,120
-2- THE SAFETY FUND CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ________________________________________________________________________________
Common Retained Stock Surplus Earnings Other Total ------------- ------------- ------------- ----------- ------------ Balance December 31, 1995 $8,303,325 $7,584,846 $4,815,433 $ 683,456 $21,387,060 Net income - - 564,871 - 564,871 Reduction in unrealized gain on investment securities available for sale, net of income taxes - - - (489,714) (489,714) ------------- ------------- ------------- ------------ ------------ Balance, March 31, 1996 $8,303,325 $7,584,846 $5,380,304 $ 193,742 $21,462,217 ============= ============= ============= ============ ============
-3- THE SAFETY FUND CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS ________________________________________________________________________________
THREE MONTHS ENDED MARCH 31, CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES: 1996 1995 ------------- ------------- Net income $ 564,871 $ 217,982 Adjustments to reconcile net income to net cash provided (used) by operating activities: Proceeds from sale of mortgage loans - 78,009 Origination of mortgage loans held for sale - (77,300) Repurchase of mortgage loans previously sold - (222,788) Gains on mortgage loans sold, net - (709) Depreciation and amortization 289,996 300,312 Gains on sales of investment securities available for sale, net - (781) Amortization (accretion) of bond premiums and discounts, net 3,720 (50,685) Provision for possible losses on loans and other real estate owned 75,000 541,333 Increase in accrued interest receivable (412,607) (521,505) (Increase) decrease in other assets, net (308,143) 218,682 Increase (decrease) in other liabilities 212,005 (94,985) --------------- ------------- Net cash provided by operating activities 424,842 387,565 --------------- ------------- CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES: Proceeds from sales of investment securities available for sale - 6,632,345 Proceeds from maturities of investment securities available for sale 9,000,000 2,000,000 Proceeds from maturities of investment securities held to maturity 5,294,739 179,954 Purchase of investment securities available for sale (2,430,078) - Purchase of investment securities held to maturity (23,642,739) - Increase in federal funds sold (4,800,000) (3,200,000) (Increase) decrease in loans outstanding 4,794,935 (7,316,327) Purchases of premises and equipment (43,899) (249,535) --------------- ------------- Net cash used by investing activities (11,827,042) (1,953,563) --------------- ------------- CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES: Increase (decrease) in securities sold under repurchase agreements 7,498,196 (7,418,960) Increase (decrease) in treasury tax and loan notes 2,147,835 (1,378,013) Increase (decrease) in deposits (276,239) 9,812,230 --------------- ------------- Net cash provided by financing activities 9,369,792 1,015,257 --------------- ------------- DECREASE IN CASH AND DUE FROM BANKS (2,032,408) (550,741) CASH AND DUE FROM BANKS, BEGINNING OF YEAR 13,305,505 15,223,830 --------------- ------------- CASH AND DUE FROM BANKS, END OF PERIOD $ 11,273,097 $14,673,089 =============== ============= Supplemental disclosures of cash flow information: Cash paid during quarter for: Interest $ 1,914,509 $ 1,628,364 Income taxes 288,000 141,901 Non-cash transactions: Transfers from loans to other real estate owned 101,809 -
-4- THE SAFETY FUND CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1996 1. The financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for interim periods. All such adjustments consist of normal recurring accruals. 2. Results of operations for the three month period ended March 31, 1996 are not necessarily indicative of the results to be expected for the entire year. 3. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Form 10-KSB for the year ended December 31, 1995. 4. Financial statements for interim periods, by their very nature, require estimations which may result in greater imprecision than those associated with annual audited financial statements. 5. Earnings per share are based upon the weighted average number of shares outstanding during the period. 6. In accordance with the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", the Company has a net deferred tax asset. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of March 31, 1996, the Company had established a valuation allowance of $424,059 ($499,059 at December 31, 1995). 7. The "net unrealized gain on investment securities available for sale" included in the stockholders' equity section of the Company's balance sheet as of March 31, 1996 consists of three components: Net unrealized gain on investment securities available for sale, net of deferred income taxes of $197,954 $ 303,196 Net unrealized loss related to investment securities transferred during 1994 from the available for sale portfolio to the held to maturity portfolio, net of deferred income taxes of $188,595 (288,861) Net unrealized gain related to investment securities transferred during 1995 from the available for sale portfolio to the held to maturity portfolio, net of deferred income taxes of $117,133 179,407 ---------- $ 193,742 ==========
-5- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) 8. As of March 31, 1996, the Company had commitments to extend credit of approximately $33 million. -6- EX-99.3 8 EX-99.3 EXHIBIT 99.3 MILFORD CO/OPERATIVE BANK BALANCE SHEETS ASSETS
JUNE 30, 1995 MARCH 31, 1996 ---------------- ---------------- (UNAUDITED) Cash and due from banks.................................................... $ 2,099,564 $ 1,605,747 Interest bearing deposit accounts.......................................... 19,765,274 16,967,728 Securities (Note 4): Available for sale at fair value (cost $34,159,006 at March 31, 1996 and $31,672,830 at June 30, 1995)........................................... 33,852,285 31,681,762 Held to maturity at cost (fair value $29,340,452 at March 31, 1996 and $38,058,105 at June 30, 1995)........................................... 29,686,396 38,623,602 Loans receivable, net...................................................... 70,194,322 60,818,640 Accrued interest receivable: Loans.................................................................... 524,709 434,212 Securities............................................................... 572,317 877,349 Stock in Federal Home Loan Bank of Boston.................................. 714,000 655,100 Premises and equipment..................................................... 2,015,254 2,138,750 Real estate owned.......................................................... 71,222 36,055 Deferred federal income tax benefit........................................ 363,796 228,748 Other assets............................................................... 252,755 284,144 ---------------- ---------------- Total assets........................................................... $ 160,111,894 $ 154,351,837 ---------------- ---------------- ---------------- ---------------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposit accounts......................................................... $ 141,341,304 $ 135,746,914 Advances from Federal Home Loan Bank of Boston........................... 2,000,000 2,000,000 Accrued expenses and other liabilities................................... 1,242,310 1,562,351 ---------------- ---------------- Total liabilities.................................................... $ 144,583,614 $ 139,309,265 ---------------- ---------------- ---------------- ---------------- Stockholders' Equity: Common Stock, $1.00 par value; 1,800,000 authorized; 675,167 and 657,717 issued and outstanding, respectively.................................... 675,167 657,717 Additional paid-in capital............................................... 6,796,257 6,613,032 Net unrealized holding gain (loss) on securities available-for-sale, net of taxes................................................................ (202,436) 5,895 Retained earnings (subject to restrictions).............................. 8,259,292 7,765,928 ---------------- ---------------- Total stockholders' equity........................................... $ 15,528,280 $ 15,042,572 ---------------- ---------------- Total liabilities and stockholders' equity........................... $ 160,111,894 $ 154,351,837 ---------------- ---------------- ---------------- ----------------
See accompanying notes to the financial statements. 14 MILFORD CO/OPERATIVE BANK STATEMENTS OF OPERATIONS
THREE MONTHS NINE MONTHS ENDED MARCH 31, ENDED MARCH 31, ---------------------------- ---------------------------- 1996 1995 1996 1995 ------------- ------------- ------------- ------------- (UNAUDITED) Interest income: Mortgage loans..................................... $ 1,341,019 $ 1,216,189 $ 3,881,392 $ 3,492,992 Other loans........................................ $ 135,752 $ 81,573 $ 325,898 $ 232,010 Demand accounts.................................... $ 220,973 $ 232,762 $ 598,870 $ 620,424 Investment securities.............................. $ 577,051 $ 569,223 $ 1,923,632 $ 1,711,710 Mortgage-backed securities......................... $ 412,759 $ 382,933 $ 1,253,102 $ 1,128,534 ------------- ------------- ------------- ------------- Total interest income............................ $ 2,687,554 $ 2,482,680 $ 7,982,894 $ 7,185,670 ------------- ------------- ------------- ------------- Interest expense: Deposit accounts................................... $ 1,310,893 $ 1,105,237 $ 3,893,412 $ 3,193,696 Borrowings......................................... $ 31,523 $ 36,694 $ 102,049 $ 132,798 ------------- ------------- ------------- ------------- Total interest expense........................... $ 1,342,416 $ 1,141,931 $ 3,995,461 $ 3,326,494 ------------- ------------- ------------- ------------- Net interest income.............................. $ 1,345,138 $ 1,340,749 $ 3,987,433 $ 3,859,176 Provision for probable loan losses............... $ 30,000 $ 30,000 $ 90,000 $ 70,000 ------------- ------------- ------------- ------------- Net interest income after provision for probable loan losses.............................................. $ 1,315,138 $ 1,310,749 $ 3,897,433 $ 3,789,176 ------------- ------------- ------------- ------------- Non-interest income: Customer service charges........................... $ 101,078 $ 98,601 $ 312,240 $ 307,999 Gain (loss) on sale of investment securities....... $ 0 $ 2,274 $ 51,166 $ (4,455) Gain on loan sales................................. $ 98 $ 0 (131) 2,073 Gain (loss) on sale of other real estate owned..... $ (657) $ 0 $ 7,297 $ 0 Other.............................................. $ 60,223 $ 60,711 $ 215,444 $ 203,217 ------------- ------------- ------------- ------------- Total non-interest income........................ $ 160,742 $ 161,586 $ 586,016 $ 508,834 ------------- ------------- ------------- ------------- Non-interest expenses: Compensation and fringe benefits................... $ 463,478 $ 428,739 $ 1,374,848 $ 1,277,263 Occupancy and equipment............................ $ 136,129 $ 120,518 $ 369,358 $ 340,920 Data processing service fees....................... $ 91,031 $ 85,146 $ 269,661 $ 248,855 Federal insurance premium.......................... $ 78,234 $ 75,344 $ 231,085 $ 225,500 Advertising........................................ $ 14,560 $ 13,499 $ 48,144 $ 40,350 Other.............................................. $ 166,581 $ 199,920 $ 548,844 $ 531,880 ------------- ------------- ------------- ------------- Total non-interest expenses...................... $ 950,013 $ 923,166 $ 2,841,940 $ 2,664,768 ------------- ------------- ------------- ------------- Income before provision for income taxes............. $ 525,867 $ 549,169 $ 1,641,509 $ 1,633,242 ------------- ------------- ------------- ------------- Provision for income taxes........................... $ 187,425 $ 131,167 $ 554,615 $ 499,167 ------------- ------------- ------------- ------------- Net income....................................... $ 338,442 $ 418,002 $ 1,086,894 $ 1,134,075 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net income per share................................. $ 0.51 $ 0.64 $ 1.65 $ 1.73 Dividends per share.................................. $ 0.50 $ 0.25 $ 0.90 $ 0.55 Average shares outstanding........................... 659,917 656,217 659,917 656,217
See accompanying notes to the financial statements. 15 MILFORD CO/OPERATIVE BANK STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY NINE MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
NET UNREALIZED HOLDING GAIN (LOSS) ON ADDITIONAL AVAIL-FOR- TOTAL COMMON PAID-IN RETAINED SALE STOCKHOLDERS' STOCK CAPITAL EARNINGS SECURITIES EQUITY ----------- ------------- ------------- ------------ -------------- (UNAUDITED) Balance at June 30, 1995................ $ 657,717 $ 6,613,032 $ 7,765,928 $ 5,895 $ 15,042,572 Issuance of common stock................ $ 17,450 $ 183,225 -- -- $ 200,675 Change in unrealized holding gain on available-for-sale securities, net of taxes.................................. -- -- -- $ (208,331) $ (208,331) Net income.............................. -- -- $ 1,086,894 -- $ 1,086,894 Dividends paid.......................... -- -- $ (593,530) -- $ (593,530) ----------- ------------- ------------- ------------ -------------- Balance at March 31, 1996............... $ 675,167 $ 6,796,257 $ 8,259,292 $ (202,436) $ 15,528,280 ----------- ------------- ------------- ------------ -------------- ----------- ------------- ------------- ------------ --------------
See accompanying notes to the financial statements. 16 MILFORD CO/OPERATIVE BANK STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, -------------------------------- 1996 1995 --------------- --------------- (UNAUDITED) Cash flows provided by operating activities: Net income................................................................... $ 1,086,894 $ 1,134,075 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization.............................................. 178,482 204,054 Provision for probable loan losses......................................... 90,000 70,000 Loss (gain) on sale of securities.......................................... (51,166) 4,455 Gross receipts associated with loans originated for resale................. 119,569 181,073 Gross payments associated with loans originated for resale................. (119,700) (179,000) Loss (gain) on loan sales.................................................. 131 (2,073) Gain on sale of real estate owned.......................................... (7,297) -- Writedown of real estate owned............................................. 99,207 -- Changes in assets and liabilities: Deferred income taxes.................................................... (27,727) (4,356) Accrued interest receivable.............................................. 214,535 31,891 Other assets............................................................. 31,389 (84,857) Accrued expenses and other liabilities................................... $ (328,639) $ 64,556 --------------- --------------- Net cash provided by operating activities.............................. 1,285,678 1,419,818 --------------- --------------- Cash flows used in investing activities: Purchases of securities available-for-sale................................... $ (22,689,598) -- Proceeds from maturities of securities available-for-sale.................... 2,500,000 -- Proceeds from called securities available-for-sale........................... 8,000,000 -- Proceeds from sales of securities available-for-sale......................... 10,594,552 -- Purchases of securities held-to-maturity..................................... (7,664,765) -- Proceeds from called securities held-to-maturity............................. 9,500,000 -- Proceeds from maturities of securities held-to-maturity...................... 1,000,000 Purchases of investment securities........................................... -- (10,630,177) Proceeds from sales and maturities of investment securities.................. -- 9,675,000 Purchase of mortgage-backed securities....................................... -- (1,415,045) Proceeds from paydowns of mortgage-backed securities......................... 5,262,008 2,278,261 Purchase of collateralized mortgage obligations.............................. (1,000,000) Proceeds from the sales and paydowns of collateralized mortgage obligations................................................................. -- 984,493 Purchase of Federal Home Loan Bank stock..................................... (58,900) (28,900) Net increase in loans receivable............................................. (9,719,398) (2,811,576) Capital expenditures......................................................... (54,986) (231,225) Proceeds from sale of real estate owned...................................... 126,639 -- Change in other real estate owned............................................ -- (82,059) --------------- --------------- Net cash used in investing activities.................................. $ (3,204,448) $ (3,261,228) --------------- --------------- Cash flows provided by (used in) financing activities: Net increase (decrease) in deposit accounts.................................. $ 5,594,390 $ (476,527) Advances from Federal Home Loan Bank......................................... (1,000,000)
17
NINE MONTHS ENDED MARCH 31, -------------------------------- 1996 1995 --------------- --------------- (UNAUDITED) Increase in advanced payments by borrowers for taxes and insurance........... 8,598 100,903 Dividends paid............................................................... (593,530) (360,919) Issuance of common stock..................................................... 200,675 -- --------------- --------------- Net cash provided by (used in) financing activities.................... $ 5,210,133 $ (1,736,543) --------------- --------------- Net increase (decrease) in cash and cash equivalents........................... 3,291,363 (3,577,953) Cash and cash equivalents, beginning........................................... 18,573,475 19,222,579 --------------- --------------- Cash and cash equivalents, ending.............................................. $ 21,864,838 $ 15,644,626 --------------- --------------- --------------- --------------- Supplemental cash flow information: Interest paid on deposits.................................................... $ 3,893,412 $ 3,193,696 Interest paid on borrowings.................................................. $ 102,049 $ 132,798 Taxes paid................................................................... $ 571,495 $ 527,039
See accompanying notes to the financial statements. 18 MILFORD CO/OPERATIVE BANK NOTES TO THE FINANCIAL STATEMENTS MARCH 31, 1996 (UNAUDITED) (1) ACCOUNTING PRINCIPLES The financial information as of March 31, 1996, the results of operations for the three and nine months ended March 31, 1996 and 1995, the cash flows for the nine months ended March 31, 1996 and 1995, and the statement of changes in stockholders' equity for the nine months ended March 31, 1996, are unaudited, but in the opinion of management reflect all adjustments (none of which were other than normal recurring accruals) necessary for a fair presentation of such information. Interim results are not necessarily indicative of the results to be expected for the entire year. (2) INCOME TAXES The provision for income taxes differs from the statutory rate due primarily to differences in the loan loss provision for book and tax purposes. (3) ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES The Bank classifies securities as either held-to-maturity, available-for-sale or trading. Securities held-to-maturity are reported at amortized cost. Trading securities are reported at fair value, with unrealized gains and losses included in earnings. The Bank did not have any securities reported as trading securities as of March 31, 1996. Securities which are available-for-sale are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of stockholders' equity (net of taxes). On July 1, 1994, in conjunction with the adoption of SFAS No. 115, the Bank classified $27,716,866 of securities as available-for-sale and recorded an unrealized loss of $155,399 (net of taxes) as a separate component of stockholders' equity. During the nine months ended March 31, 1996, the amount was an unrealized loss (net of taxes) of $202,436. NOTE 4 Securities available-for-sale consist of the following at March 31, 1996:
GROSS GROSS UNREALIZED UNREALIZED AMORTIZED HOLDING HOLDING FAIR COST GAINS LOSSES VALUE -------------- ------------ ------------- -------------- Marketable equity securities....................... $ 2,265,856 $ 948 $ (32,485) $ 2,234,319 Investment securities.............................. $ 22,315,031 $ 55,958 $ (334,061) $ 22,036,928 Mortgage-backed securities......................... $ 9,578,119 $ 32,550 $ (29,631) $ 9,581,038 -------------- ------------ ------------- -------------- $ 34,159,006 $ 89,456 $ (396,177) $ 33,852,285 -------------- ------------ ------------- -------------- -------------- ------------ ------------- --------------
Securities held-to-maturity consist of the following at March 31, 1996:
GROSS GROSS UNREALIZED UNREALIZED AMORTIZED HOLDING HOLDING FAIR COST GAINS LOSSES VALUE -------------- ------------ ------------- -------------- Investment securities.............................. $ 13,007,953 $ 6,247 $ (84,910) $ 12,929,290 Mortgage-backed securities......................... $ 16,678,443 $ 61,804 $ (329,085) $ 16,411,162 -------------- ------------ ------------- -------------- $ 29,686,396 $ 68,051 $ (413,995) $ 29,340,452 -------------- ------------ ------------- -------------- -------------- ------------ ------------- --------------
19 EX-99.4 9 EX-99.4 EXHIBIT 99.4 CFX CORPORATION -- THE SAFETY CORPORATION -- MILFORD COOP PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE THREE MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
CFX PRO FORMA CFX SAFETY COMB. W/ PRO FORMA CFX FULLY CFX FUND SAFETY MILFORD COMB. W/ PRO FORMA (IN THOUSANDS, EXCEPT PER SHARE DATA) (HISTORICAL) (HISTORICAL) FUND (HISTORICAL) MILFORD COMBINED - ------------------------------------- ----------- ------------- ----------- ------------- ----------- ----------- Interest income: Interest on loans and leases....... 13,303 3,468 16,771 1,531 14,834 18,302 Interest and dividends on securities........................ 1,676 1,635 3,311 952 2,628 4,263 Other interest income.............. 287 20 307 0 287 307 ----------- ------------- ----------- ------------- ----------- ----------- Total Interest and Dividend Income.......................... 15,266 5,123 20,389 2,483 17,749 22,872 Interest expense: Interest on deposits............... 5,987 1,554 7,541 1,105 7,092 8,646 Interest on borrowings............. 1,388 191 1,579 37 1,425 1,616 ----------- ------------- ----------- ------------- ----------- ----------- Total Interest Expense........... 7,375 1,745 9,120 1,142 8,517 10,262 ----------- ------------- ----------- ------------- ----------- ----------- Net Interest and Dividend Income.......................... 7,891 3,378 11,269 1,341 9,232 12,610 Provision of loan and lease losses............................ 150 525 675 30 180 705 ----------- ------------- ----------- ------------- ----------- ----------- Net Interest and Dividend Income After Provision for Loan and Lease Losses.................... 7,741 2,853 10,594 1,311 9,052 11,905 Other income......................... 2,064 940 3,004 161 2,225 3,165 Other expense........................ 7,307 3,444 10,751 923 8,230 11,674 ----------- ------------- ----------- ------------- ----------- ----------- Income Before Income Taxes....... 2,498 349 2,847 549 3,047 3,396 Income taxes......................... 942 131 1,073 131 1,073 1,204 ----------- ------------- ----------- ------------- ----------- ----------- Net Income....................... 1,556 218 1,774 418 1,974 2,192 Preferred stock dividends............ 67 0 67 0 67 67 ----------- ------------- ----------- ------------- ----------- ----------- Net Income Available to Common Stock........................... 1,489 218 1,707 418 1,907 2,125 ----------- ------------- ----------- ------------- ----------- ----------- Weighted average common shares outstanding......................... 7,056 1,661 9,880 656 8,791 11,615 ----------- ------------- ----------- ------------- ----------- ----------- ----------- ------------- ----------- ------------- ----------- ----------- Earnings per common share............ $ 0.21 $ 0.13 $ 0.17 $ 0.64 $ 0.22 $ 0.18 ----------- ------------- ----------- ------------- ----------- ----------- ----------- ------------- ----------- ------------- ----------- -----------
20 CFX CORPORATION -- THE SAFETY FUND CORPORATION -- MILFORD COOP PRO FORMA COMBINED CONDENSED BALANCE SHEET MARCH 31, 1996 (UNAUDITED) ASSETS
CFX PRO FORMA SAFETY COMBINED W/ CFX FUND PRO FORMA SAFETY MILFORD PRO FORMA (IN THOUSANDS, EXCEPT PER SHARE DATA) (HISTORICAL) (HISTORICAL) ADJUSTMENTS FUND (HISTORICAL) ADJUSTMENTS - ---------------------------------------- ----------- ----------- ----------- -------------- ----------- ------------- Cash and due from banks............... $ 24,281 $ 11,273 $ 35,554 $ 2,100 Interest bearing deposits with other banks................................ 314 7,300 7,614 19,765 Federal Home Loan Bank of Boston stock................................ 7,496 0 7,496 714 Securities available for sale......... 125,703 56,340 182,043 33,852 Securities held to maturity........... 19,410 58,292 77,702 29,686 Mortgage loans held for sale.......... 7,794 7,794 0 Loans and leases...................... 725,703 155,191 880,894 70,603 Less allowance for loan and lease losses............................. 7,936 6,977 14,913 409 ----------- ----------- ----------- -------------- ----------- ------ Net Loans and Leases.............. 717,767 148,214 0 865,981 70,194 0 Premises and equipment................ 13,513 9,392 22,905 2,015 Mortgage servicing rights............. 4,473 4,473 Goodwill and deposit base intangibles.......................... 9,720 9,720 Foreclosed real estate................ 1,141 152 1,293 71 Other assets.......................... 26,677 6,177 32,854 1,715 ----------- ----------- ----------- -------------- ----------- ------ $ 958,289 $ 297,140 $ 0 $1,255,429 $ 160,112 $ 0 ----------- ----------- ----------- -------------- ----------- ------ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Interest bearing.................... $ 669,703 $ 187,001 $ 856,704 132,957 Noninterest bearing................. 55,275 65,511 120,786 8,384 ----------- ----------- ----------- -------------- ----------- ------ Total Deposits.................... 724,978 252,512 0 977,490 141,341 0 Short-term borrowed funds............. 27,901 18,618 46,519 0 Advances from FHLBB................... 97,355 4,548 101,903 2,000 Other liabilities..................... 17,422 17,422 1,243 ----------- ----------- ----------- -------------- ----------- ------ Total Liabilities................. 867,656 275,678 0 1,143,334 144,584 0 Shareholders' Equity Common stock (1)(2)(3)................ 5,041 8,303 (6,421) 6,923 675 515 Paid-in capital....................... 66,150 7,585 6,421 80,156 6,796 (515) Retained earnings..................... 20,389 5,380 25,769 8,259 Net unrealized losses on securities available for sale, after tax effects.............................. (947) 194 (753) (202) ----------- ----------- ----------- -------------- ----------- ------ Total Shareholders' Equity........ 90,633 21,462 0 112,095 15,528 0 ----------- ----------- ----------- -------------- ----------- ------ $ 958,289 $ 297,140 $ 0 $1,255,429 $ 160,112 $ 0 ----------- ----------- ----------- -------------- ----------- ------ Number of common shares outstanding 7,561 1,661 10,385 675 ----------- ----------- -------------- ----------- ----------- ----------- -------------- ----------- Common shareholders' equity per share (4).................................... $ 11.99 $ 12.92 $ 10.79 $ 23.00 ----------- ----------- -------------- ----------- ----------- ----------- -------------- ----------- CFX PRO FORMA CFX FULLY COMBINED W/ PRO FORMA (IN THOUSANDS, EXCEPT PER SHARE DATA) MILFORD COMBINED - ---------------------------------------- ------------ ---------- Cash and due from banks............... $ 26,381 $ 37,654 Interest bearing deposits with other banks................................ $ 20,079 $ 27,379 Federal Home Loan Bank of Boston stock................................ $ 8,210 $ 8,210 Securities available for sale......... $ 159,555 $ 215,895 Securities held to maturity........... $ 49,096 $ 107,388 Mortgage loans held for sale.......... $ 7,794 $ 7,794 Loans and leases...................... $ 796,306 $ 951,497 Less allowance for loan and lease losses............................. $ 8,345 $ 15,322 ------------ ---------- Net Loans and Leases.............. 787,961 936,175 Premises and equipment................ $ 15,528 $ 24,920 Mortgage servicing rights............. $ 4,473 $ 4,473 Goodwill and deposit base intangibles.......................... $ 9,720 $ 9,720 Foreclosed real estate................ $ 1,212 $ 1,364 Other assets.......................... $ 28,392 $ 34,569 ------------ ---------- $1,118,401 $1,415,541 ------------ ---------- Deposits: Interest bearing.................... $ 802,660 $ 989,661 Noninterest bearing................. $ 63,659 $ 129,170 ------------ ---------- Total Deposits.................... $ 866,319 $1,118,831 Short-term borrowed funds............. $ 27,901 $ 46,519 Advances from FHLBB................... $ 99,355 $ 103,903 Other liabilities..................... $ 18,665 $ 18,665 ------------ ---------- Total Liabilities................. 1,012,240 1,287,918 Shareholders' Equity Common stock (1)(2)(3)................ $ 6,231 $ 8,113 Paid-in capital....................... $ 72,431 $ 86,437 Retained earnings..................... $ 28,648 $ 34,028 Net unrealized losses on securities available for sale, after tax effects.............................. $ (1,149) $ (955) ------------ ---------- Total Shareholders' Equity........ $ 106,161 $ 127,623 ------------ ---------- $1,118,401 $1,415,541 ------------ ---------- Number of common shares outstanding 9,346 12,169 ------------ ---------- ------------ ---------- Common shareholders' equity per share (4).................................... $ 11.36 $ 10.49 ------------ ---------- ------------ ----------
21 CFX CORPORATION -- THE SAFETY CORPORATION -- MILFORD COOP PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
CFX PRO FORMA CFX SAFETY COMB. W/ PRO FORMA CFX FUND SAFETY MILFORD COMB. W/ (IN THOUSANDS, EXCEPT PER SHARE DATA) (HISTORICAL) (HISTORICAL) FUND (HISTORICAL) MILFORD ----------- ------------- ----------- ------------- ----------- Interest income: Interest on loans and leases..................... 15,677 3,642 19,319 1,477 17,154 Interest and dividends on securities............. 1,741 1,777 3,518 989 2,730 Other interest income............................ 132 43 175 221 353 ----------- ------------- ----------- ------------- ----------- Total Interest and Dividend Income............. 17,550 5,462 23,012 2,687 20,237 Interest Expense: Interest on deposits............................. 6,980 1,798 8,778 1,311 8,291 Intereset on borrowings.......................... 1,749 169 1,918 31 1,780 ----------- ------------- ----------- ------------- ----------- Total Interest Expense......................... 8,729 1,967 10,696 1,342 10,071 ----------- ------------- ----------- ------------- ----------- Net Interest and Dividend Income............... 8,821 3,495 12,316 1,345 10,166 Provision of loan and lease losses................. 800 75 875 30 830 ----------- ------------- ----------- ------------- ----------- Net Interest and Dividend Income After Provision for Loan and Lease Losses........... 8,021 3,420 11,441 1,315 9,336 Other income....................................... 2,613 1,088 3,701 161 2,774 Other expense...................................... 7,291 3,618 10,909 950 8,241 ----------- ------------- ----------- ------------- ----------- Income Before Income Taxes..................... 3,343 890 4,233 526 3,869 Income taxes....................................... 1,015 325 1,340 188 1,203 ----------- ------------- ----------- ------------- ----------- Net Income..................................... 2,328 565 2,893 338 2,666 Preferred stock dividends.......................... 0 0 0 0 0 ----------- ------------- ----------- ------------- ----------- Net Income Available to Common Stock........... 2,328 565 2,893 338 2,666 ----------- ------------- ----------- ------------- ----------- ----------- ------------- ----------- ------------- ----------- Weighted average common shares outstanding (5)..... 7,540 1,661 10,364 660 9,285 ----------- ------------- ----------- ------------- ----------- ----------- ------------- ----------- ------------- ----------- Earnings per common share.......................... $ 0.31 $ 0.34 $ 0.28 $ 0.51 $ 0.29 ----------- ------------- ----------- ------------- ----------- ----------- ------------- ----------- ------------- ----------- CFX FULLY PRO FORMA (IN THOUSANDS, EXCEPT PER SHARE DATA) COMBINED ----------- Interest income: Interest on loans and leases..................... 20,796 Interest and dividends on securities............. 4,507 Other interest income............................ 396 ----------- Total Interest and Dividend Income............. 25,699 Interest Expense: Interest on deposits............................. 10,089 Intereset on borrowings.......................... 1,949 ----------- Total Interest Expense......................... 12,038 ----------- Net Interest and Dividend Income............... 13,661 Provision of loan and lease losses................. 905 ----------- Net Interest and Dividend Income After Provision for Loan and Lease Losses........... 12,756 Other income....................................... 3,862 Other expense...................................... 11,859 ----------- Income Before Income Taxes..................... 4,759 Income taxes....................................... 1,528 ----------- Net Income..................................... 3,231 Preferred stock dividends.......................... 0 ----------- Net Income Available to Common Stock........... 3,231 ----------- ----------- Weighted average common shares outstanding (5)..... 12,108 ----------- ----------- Earnings per common share.......................... $ 0.27 ----------- -----------
22 SAFETY FUND AND MILFORD CO-OPERATIVE MERGERS NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS (1) Common Stock at March 31, 1996: CFX, $0.66 2/3 par value, 22,500,000 authorized shares, of which 7,561,176 shares have been issued and are outstanding. SAFETY FUND, $5.00 par value, 3,200,000 authorized shares, of which 1,660,665 shares have been issued and are outstanding. MILFORD, $1.00 par value, 1,800,000 authorized shares, of which 675,167 shares have been issued and are outstanding. (2) The pro forma financial statements reflect the exchange of Safety Fund and Milford Common Stock for CFX Common Stock in connection with the mergers at the exchange ratios of 1.7 and 2.6446, respectively. In combining the companies, a pro forma adjustment at March 31, 1996 was made to reflect the issuance of 2,823,131 shares of CFX Common Stock to Safety Fund shareholders and 1,785,547 shares of CFX Common Stock to Milford shareholders in exchange for the outstanding shares of Safety Fund and Milford Common Stock. (3) The merger agreements provide that each holder of Safety Fund and Milford Common Stock, who would otherwise have been entitled to a fraction of CFX Common Stock, will be paid the cash value of such fraction. Such cash payments have not been reflected in the pro forma information. (4) Pro forma common shareholders' equity per share was computed by dividing combined historical common shareholders' equity by the sum of the common shares outstanding at period end, adjusted to give effect to both of the mergers, using the exchange ratios of 1.7 and 2.6446, respectively. (5) Pro forma weighted average common shares outstanding represent the historical weighted average common shares outstanding of CFX during the periods, plus the historical weighted average common shares outstanding of Safety Fund and Milford adjusted to give effect to both of the mergers, using the exchange ratios of 1.7 and 2.6446, respectively. 23 -----END PRIVACY-ENHANCED MESSAGE-----