-----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, FfeTBLtCG0WTya65JMzrGf7BMFR01z+ykq8GNlTNmMps8OJSDI/j8GC6+d5y9mUF AulBGQkpWWkkOfmRjs0+5A== 0000950133-97-003617.txt : 19971028 0000950133-97-003617.hdr.sgml : 19971028 ACCESSION NUMBER: 0000950133-97-003617 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971027 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971027 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLES HERITAGE FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000829750 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 010137770 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-16947 FILM NUMBER: 97700954 BUSINESS ADDRESS: STREET 1: ONE PORTLAND SQ STREET 2: P O BOX 9540 CITY: PORTLAND STATE: ME ZIP: 04112 BUSINESS PHONE: 2077618500 MAIL ADDRESS: STREET 1: P O BOX 9540 CITY: PORTLAND STATE: ME ZIP: 04112-9540 8-K 1 FORM 8-K DATE OCTOBER 27, 1997 1 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 October 27, 1997 - ------------------------------------------------------------------------------- (Date of earliest event reported) Peoples Heritage Financial Group, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maine 0-16947 01-0437984 - ------------------------------------------------------------------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) P.O. Box 9540, One Portland Square, Portland, Maine 04112-9540 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code)
(207) 761-8500 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 2 ITEM 5. OTHER EVENTS On October 27, 1997, Peoples Heritage Financial Group, Inc. ("PHFG") announced that it and CFX Corporation (the "Company") had entered into an Agreement and Plan of Merger, dated as of October 27, 1997 (the "Agreement"), which sets forth the terms and conditions pursuant to which the Company would be merged with and into PHFG (the "Merger"). The Agreement provides, among other things, that as a result of the Merger, each outstanding share of common stock of the Company (subject to certain exceptions) will be converted into the right to receive .667 newly-issued shares of PHFG's common stock. Consummation of the Merger is subject to a number of conditions, including, but not limited to, (i) the approval of the Agreement and the Merger by the shareholders of both PHFG and the Company and (ii) the receipt of certain regulatory approvals. In connection with the Agreement, PHFG and the Company entered into Stock Option Agreements, dated as of October 27, 1997, pursuant to which the Company granted PHFG an option (the "Company Option") to purchase up to 19.9% (subject to adjustments set forth therein) of the Company's outstanding shares of common stock at a purchase price of $22.69 per share and PHFG granted the Company an option (the "PHFG Option") to purchase up to 10.0% (subject to adjustments set forth therein) of PHFG's outstanding shares of common stock at a purchase price of $43.13 per share. The Company Option and the PHFG Option will become exercisable upon the occurrence of certain events, as specified in the applicable Stock Option Agreement, none of which has occurred as of October 27, 1997. The press release issued by PHFG and the Company with respect to the announcement of the transaction described herein is attached hereto as Exhibit 99.1 and is hereby incorporated herein by reference in its entirety. Also attached as Exhibit 99.2 and incorporated herein by reference are certain forward-looking statements to be made by PHFG in connection with a presentation to be given by PHFG to investment analysts on October 27, 1997. The press release and the portions of the analyst presentation incorporated herein by reference contain forward-looking statements with respect to the financial condition, results of operations and business of PHFG upon consummation of the Merger, including statements relating to: (a) the estimated cost savings and accretion to reported earnings that will be realized from the Merger; (b) the estimated impact on revenues of the Merger, and (c) the restructuring charges expected to be incurred in connection with the Merger. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) estimated cost savings from the Merger cannot be fully realized within the expected time frame; (2) revenues following the Merger are lower than expected; (3) competitive pressure among depository institutions increases significantly; (4) costs or difficulties related to the integration of the businesses of PHFG and the Company are greater than expected; (5) changes in the interest rate environment reduce interest margins; (6) general economic conditions, either nationally or in the markets in which PHFG will be doing business, are less favorable than expected; or (7) legislation or changes in regulatory requirements adversely affect the businesses in which PHFG would be engaged. 3 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) The following exhibits are included with this Report: Exhibit 99.1 Press Release, dated October 27, 1997 Exhibit 99.2 Portions of Analysts Presentation 3 4 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. PEOPLES HERITAGE FINANCIAL GROUP, INC. By: /s/ Peter J. Verrill --------------------------------------------- Name: Peter J. Verrill Title: Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer Date: October 27, 1997 4 EX-99.1 2 PRESS RELEASE DATED OCTOBER 27, 1997 1 Exhibit 99.1 PEOPLES HERITAGE FINANCIAL GROUP, INC. NEWS RELEASE FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT AT PEOPLES HERITAGE FINANCIAL GROUP: BRIAN ARSENAULT, VICE PRESIDENT, CORPORATE COMMUNICATIONS (207) 761-8517 AT CFX CORPORATION: MARK A. GAVIN, CHIEF OPERATING OFFICER (603) 355-8604 PEOPLES HERITAGE FINANCIAL GROUP, INC. TO ACQUIRE CFX CORPORATION AND CREATE NEW HAMPSHIRE'S LARGEST BANK STRONG MASSACHUSETTS FRANCHISE ALSO CREATED Portland, Maine, October 27, 1997 -- Peoples Heritage Financial Group, Inc. (NASDAQ: PHBK), a multi-bank and financial services holding company headquartered in Portland, Maine, has reached agreement to acquire Keene, New Hampshire based CFX Corporation (AMEX: CFX) and create New England's fourth largest banking company. Under terms of the agreement, each share of common stock of CFX will be converted into 0.667 shares of Peoples Heritage common stock. Approximately 16 million shares of Peoples Heritage common stock will be issued in the transaction, which will be a tax-free reorganization and accounted for as a pooling-of-interests. Following the merger, Peoples Heritage will have approximately $9.4 billion of assets, $6.6 billion of deposits and $696.8 million of shareholders' equity, and a pro forma market capitalization of $1.9 billion. CFX Corporation's New Hampshire Bank, CFX Bank, including the recently-merged Portsmouth Savings Bank, Concord Savings Bank and Centerpoint Bank, will be merged into Peoples Heritage's New Hampshire Bank, Bank of New Hampshire. The resultant Bank of New Hampshire will be the state's largest bank with $4.4 billion in assets and will have the state's largest deposit market share. The Massachusetts banking subsidiaries of CFX Corporation, Orange Savings Bank headquartered in Orange, Massachusetts and The Safety Fund National Bank headquartered in Fitchburg, Massachusetts, will be merged into Peoples Heritage's Massachusetts banking subsidiary, Family Bank. Based on a closing share price of Peoples Heritage common stock of $43.13 on October 24, 1997, the transaction would be valued at approximately $703 million and CFX shareholders would receive $28.76 in Peoples Heritage common stock for each share of CFX 2 common stock. This price equates to 2.8 times CFX Corporation's book value at September 30, 1997 and 18 times its estimated earnings in 1998. "We have now created a New England banking and financial services powerhouse," said William J. Ryan, Chairman, President and Chief Executive Officer of Peoples Heritage. "We become the number one bank in New Hampshire, after having recently grown to nearly the number one position in Maine, and our Massachusetts franchise is significantly enhanced." "We are extremely pleased to join Peoples Heritage," said Peter J. Baxter, President and Chief Executive Officer of CFX Corporation, who will become Vice Chairman and Chief Operating Officer of Peoples Heritage upon completion of the acquisition. "This is the coming together of two great community banking franchises, both with customer driven styles of doing business. Five CFX directors will join the Peoples Heritage Board." The agreement is subject to approval by shareholders of both companies and by regulatory authorities. It is anticipated that the transaction will close by mid-1998. As part of the agreement, CFX gave Peoples Heritage an option to purchase 19.9% of its outstanding common stock under certain circumstances and Peoples Heritage gave CFX an option to purchase 10.0% of its outstanding common stock under certain circumstances. Peoples Heritage plans an analyst conference call at 11:30 a.m., EDT, today to elaborate on the strategic rationale and financial implications of the acquisition. To participate in the conference call, dial 1-800-289-0493. This press release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Peoples Heritage following the consummation of the merger that are subject to various factors which could cause actual results to differ materially from such projections or estimates. Such factors include, but are not limited to, the possibility that anticipated cost savings and revenue enhancements might not be realized and that adverse general economic conditions or an adverse interest rate environment could develop. Peoples Heritage's current report on Form 8-K filed on or about October 27, 1997 discloses more fully these factors. Peoples Heritage Financial Group has $6.5 billion in assets and operates three banking subsidiaries: Peoples Heritage Bank with 74 banking offices in Maine, Bank of New Hampshire with 46 banking offices in New Hampshire and Family Bank with 17 banking offices in Massachusetts and five in southern New Hampshire. CFX Corporation has $2.8 billion in assets and operates three banking subsidiaries: CFX Bank in New Hampshire and Orange Savings Bank and The Safety Fund National Bank in Massachusetts with a total of 58 banking offices. 2 EX-99.2 3 PORTIONS OF ANALYSTS PRESENTATION 1 Exhibit 99.2 PRO FORMA HIGHLIGHTS September 30, 1997
Pro Forma ($ in millions, except per share amounts) PHBK CFX** Combined ---------------- ---------------- ---------------- Assets $6,554* $2,821 $9,375 Total loans $4,273* $1,913 $6,186 Loan loss reserve $ 70* $ 21 $ 92 Deposits $4,623* $1,936 $6,558 Capital $ 451* $ 246 $ 685 Intangible assets $ 117* $ 9 $ 126 Leverage ratio 7.35%* 8.38% 7.68% Stated book value $16.42 $10.25 $15.75 Tangible book value $12.15 $ 9.88 $12.85 Market capitalization $1,034 $ 527 $1,876
- --------------- * Includes the effect of the acquisition of Atlantic Bancorp on October 1, 1997. ** On a pooling basis, excluding merger costs. 2 Based on estimate of standard analyst model on mean Wall Street estimates.
Estimated (in thousands except per share amounts) Pro Forma 1998 1999 Shares Earnings(a) Earnings ---------------- ---------------- ---------------- PHBK EPS $ 2.97 $ 3.30 PHBK base net income 27,500 $ 81,675 $ 90,750 CFX base net income 24,003 $ 38,083 $ 42,844 Cost savings after tax(b) $ 7,972 $ 12,555 Revenue enhancements after tax: CFX margin improvement $ 3,500 Leveraging of excess capital $ 1,600 ------- Pro forma revenue growth $ 5,100 Total 43,974 $127,730 $151,249 Pro forma EPS $2.91 $3.43 Accretion (Dilution) $(.06) $.13 Accretion (Dilution) (2%) 4% Net earnings based on annualized cost savings $136,716 Pro forma EPS $3.00 Accretion - $ $.03 Accretion - % 1%
- ------------------ (a) Excludes the effect of a one-time merger and restructuring charge anticipated in the first quarter of 1998, which is estimated at $12.0 million on an after-tax basis. (b) Assumes cost savings are phased in 67% and 100% in 1998 and 1999, respectively. 2 -----END PRIVACY-ENHANCED MESSAGE-----