-----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, D9rtgT0OFkg6cw52zADM9F+rCjofmwoNcqYk07nSXGQo21yMI2rNg7kFlkcp19K7 WHvG4hJ6uDSPMze7cazRaw== 0000950135-00-000158.txt : 20000202 0000950135-00-000158.hdr.sgml : 20000202 ACCESSION NUMBER: 0000950135-00-000158 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000119 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLES HERITAGE FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000829750 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 010437984 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-16947 FILM NUMBER: 509331 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 PEOPLES HERITAGE FINANCIAL GROUP 1 UNITED STATES 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 January 19, 2000 - -------------------------------------------------------------------------------- (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 January 19, 2000, Peoples Heritage Financial Group, Inc. issued the press release included as Exhibit 99 to this Current Report on Form 8-K, which is incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) The following exhibit is included with this Current Report on Form 8-K: Exhibit 99 Press release, dated January 19, 2000 2 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. PEOPLES HERITAGE FINANCIAL GROUP, INC. By: /s/ Peter J. Verrill ---------------------------------------------- Name: Peter J. Verrill Title: Executive Vice President, Chief Financial Officer and Treasurer Date: January 19, 2000 3 EX-99 2 PRESS RELEASE 1/19/00 1 Peoples Heritage Financial Group Exhibit 99 P.O. Box 9540 Portland, ME 04112-9540 Tel: 207-761-8500 NEWS RELEASE [PEOPLES HERITAGE LOGO] FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT: BRIAN ARSENAULT, SVP, CORPORATE COMMUNICATIONS (207) 761-8517 PEOPLES HERITAGE ANNOUNCES RECORD EARNINGS FOR 1999 4TH QUARTER '99 EPS 44 CENTS VS. 30 CENTS IN `98 (Earnings Conference Call: 1:30 p.m. eastern time; to participate dial 1-800-946-0706, participant code, 868882; replay number, 1-888-203-1112, same access code.) Portland, Maine, January 19, 2000 - Peoples Heritage Financial Group, Inc. (NASDAQ: PHBK) today announced its sixth consecutive record earnings year with net income of $142.4 million, or $1.37 per diluted share, for the year ended December 31, 1999, a 26 percent increase over the year ended December 31, 1998 when net income was $112.8 million, or $1.07 per diluted share. On an operating basis, exclusive of special charges, net income was $164.1 million, or $1.58 per diluted share, for the year ended December 31, 1999, up 16 percent from operating earnings of $141.8 million, or $1.34 per diluted share, for the year ended December 31, 1998. For the quarter ended December 31, 1999, the Company earned $45.6 million, or 44 cents per diluted share, up 43 percent from $31.9 million, or 30 cents per diluted share. On an operating basis, excluding merger-related income, the Company earned $43.2 million, or 42 cents per diluted share, for the quarter ended December 31, 1999, up 24 percent from operating income of $36.2 million, or 34 cents per diluted share, for the quarter ended December 31, 1998. "It is very gratifying to continue what has become an unbroken string of six consecutive record earnings years," said William J. Ryan, Chairman, President and Chief Executive Officer. "We continue to have strong commercial and consumer loan growth, expanding fee income and good expense control." (more) 2 2 The year and quarter ended December 31, 1999 evidenced continuing strengthening of several key financial ratios: - - The operating Return on Average Equity (ROE) was 20.16% and 18.85% for the quarter and year, respectively, ended December 31, 1999, as compared to 16.13% and 16.45% for the quarter and year, respectively, ended December 31, 1998. - - The operating Return on Average Assets (ROA) was 1.24% for both the quarter and year ended December 31, 1999 as compared to 1.22% for the quarter and year ended December 31, 1998. - - The Company's efficiency ratio improved to 53.56% for the quarter ended December 31, 1999 as compared to 57.44% for the quarter ended December 31, 1998. - - Nonperforming assets as a percentage of total assets dropped to 0.40 percent at December 31, 1999 as compared to 0.56% at December 31, 1998. Other financial highlights of 1999 included double digit growth in consumer and commercial lending; strong growth in key categories of noninterest income including a 56 percent increase in insurance commissions, a 37 percent increase in income from investment advisory services and a 15 percent growth in trust income; and a 4 percent decline in noninterest expense for the year ended December 31, 1999 from the year ended December 31, 1998. Despite a record 1999, Mr. Ryan cautioned against overly high expectations in 2000. "In the coming year, given the calendar-year dilution of the anticipated Banknorth acquisition, a decline in mortgage banking originations and associated business given higher rates, and pressure on spreads and margins created by strong price competition in commercial lending, I think an anticipated earnings per share increase of 5 to 6 percent is more realistic than double digit estimates," said Mr. Ryan. "In subsequent years, assuming reasonable economic conditions, I believe that we will return to annual earnings per share growth in the 10 to 12 percent range." Peoples Heritage Financial Group is a multi-state banking and financial services holding company. Its subsidiary banks include Peoples Heritage Bank, with the top market share in Maine, Bank of New Hampshire, with the leading market share in New Hampshire, Family Bank, one of the six largest banks in Massachusetts and Glastonbury Bank & Trust in Connecticut. The Company and its affiliate banks also operate subsidiaries in the fields of trust and investments, insurance brokerage, and leasing. Total assets of the Company at December 31, 1999 were $13.9 billion. The Company expects to complete the acquisition of $4.6 billion Banknorth Group in the second quarter of 2000. Based on 102,181,789 shares outstanding at December 31, 1999, book value per share was $8.33. Shareholders' equity at December 31, 1999 was $851.0 million. 3 3 Note on forward looking information: This release contains forward looking information for Peoples Heritage Financial Group, Inc. on a stand alone basis and on a pro forma combined basis with Banknorth Group, Inc. The merger of the two companies is dependent upon the receipt of shareholder and regulatory approvals, neither of which can be assured, as well as other customary closing conditions. Forward looking financial information could vary materially depending upon changes in interest rates, which could affect net interest margins and net interest income; delays in cost savings measures to be adopted in connection with the merger or a failure to realize anticipated cost savings, delays in obtaining revenue enhancements from the merger or a failure to realize anticipated revenue enhancements; competitive factors, which could affect noninterest income, costs of deposits and interest income; and general economic conditions which could negatively affect the volume of loan originations, the amount of loan losses and levels of noninterest income. (end) 4 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, ---------------------------------- % (In thousands) 1999 1998 Change ----------- ----------- ------ Cash and due from banks $ 398,759 $ 415,435 -4% Federal funds sold and other short-term investments 203,789 283,878 -28% Securities available for sale 5,161,009 2,986,131 73% Securities held to maturity 541,332 245,233 121% Loans and leases held for sale 67,220 517,754 -87% Loans and leases: Residential real estate mortgages 1,410,494 2,230,615 -37% Commercial real estate mortgages 1,795,763 1,621,890 11% Commercial business loans and leases 1,290,969 1,146,242 13% Consumer loans and leases 2,347,031 2,089,284 12% ----------- ----------- Total loans and leases 6,844,257 7,088,031 -3% Less: Allowance for loan losses 107,871 110,561 -2% ----------- ----------- Loans and leases, net 6,736,386 6,977,470 -3% Premises and equipment 141,739 144,574 -2% Goodwill and other intangible assets 113,264 124,363 -9% Mortgage servicing rights 46,829 40,088 17% Bank owned life insurance 228,423 66,944 241% Other assets 280,376 248,369 13% ----------- ----------- $13,919,126 $12,050,239 16% =========== =========== - ------------------------------------------------------------------------------------------------------------ LIABILITIES & SHAREHOLDERS' EQUITY Deposits: Regular savings $ 1,237,092 $ 1,284,074 -4% Retail money market and NOW accounts 2,232,891 2,073,793 8% Retail certificates of deposit 3,159,864 3,455,541 -9% Brokered deposits 173,798 257,570 -33% Demand deposits 1,311,112 1,305,737 0% ----------- ----------- Total deposits 8,114,757 8,376,715 -3% Borrowings from Federal Home Loan Bank 3,667,399 1,936,585 89% Securities sold under repurchase agreements 1,089,316 591,970 84% Other borrowings 31,447 25,659 23% Other liabilities 96,455 118,182 -18% ----------- ----------- Total liabilities 12,999,374 11,049,111 18% ----------- ----------- Company obligated, mandatorily redeemable securities of subsidiary trust holding solely parent junior subordinated debentures 68,775 100,000 -31% Shareholders' equity 850,977 901,128 -6% ----------- ----------- $13,919,126 $12,050,239 16% =========== ===========
- -------------------------------------------------------------------------------- 5 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(In thousands, except number of Year Ended December 31, Three Months Ended December 31, shares and per share data) ----------------------------- % ------------------------------- % 1999 1998 Change 1999 1998 Change ------------ ------------ ------ ------------ ------------ ------ Interest and dividend income $ 907,935 $ 837,459 8% $ 240,596 $ 208,955 15% Interest expense 461,688 410,986 12% 126,216 102,722 23% ------------ ------------ ------------ ------------ Net interest income 446,247 426,473 5% 114,380 106,233 8% Provision for loan and lease losses 14,100 14,430 -2% 3,405 3,973 -14% ------------ ------------ ------------ ------------ Net interest income after provision for loan and lease losses 432,147 412,043 5% 110,975 102,260 9% ------------ ------------ ------------ ------------ Noninterest income: Customer services 53,402 40,982 30% 15,447 11,166 38% Mortgage banking services 16,342 27,202 -40% 2,065 4,873 -58% Trust Income 14,605 12,713 15% 3,864 3,526 10% Investment advisory services 5,318 3,877 37% 1,497 960 56% Insurance commissions 20,289 13,006 56% 6,012 3,956 52% Bank owned life insurance 11,479 3,705 210% 3,094 898 NM Net gains on sales of securities 281 5,904 -95% - 2,395 -100% Other noninterest income 7,472 11,297 -34% 1,875 2,971 -37% ------------ ------------ ------------ ------------ 129,188 118,686 9% 33,854 30,745 10% ------------ ------------ ------------ ------------ Noninterest expense: Salaries and employee benefits 163,621 164,888 -1% 43,211 41,751 3% Data processing 28,043 25,399 10% 7,058 7,216 -2% Occupancy and equipment expense 48,346 47,432 2% 12,188 11,850 3% Distributions on securities of subsidiary trust 6,678 9,060 -26% 1,549 2,265 -32% Amortization of goodwill & deposit premiums 11,778 11,611 1% 2,944 2,947 0% Special charges (1) 29,346 39,172 -25% (3,889) 3,798 NM Other noninterest expense 59,062 63,436 -7% 13,995 13,545 3% ------------ ------------ ------------ ------------ 346,874 360,998 -4% 77,056 83,372 -8% ------------ ------------ ------------ ------------ Income before income tax expense 214,461 169,731 26% 67,773 49,633 37% Income tax expense 72,039 56,907 27% 22,192 17,703 25% ------------ ------------ ------------ ------------ Net income $ 142,422 $ 112,824 26% $ 45,581 $ 31,930 43% ============ ============ ============ ============ Weighted average shares outstanding: Basic 102,988,690 103,637,875 -1% 101,656,431 103,887,703 -2% Diluted 104,112,038 105,767,728 -2% 102,537,739 105,490,499 -3% Earnings per share: Basic $ 1.38 $ 1.09 27% $ 0.45 $ 0.31 45% Diluted $ 1.37 $ 1.07 28% $ 0.44 $ 0.30 47% - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING FINANCIAL DATA Operating non-interest expense (2) $ 317,528 $ 321,826 -1% $ 80,945 $ 79,574 2% Operating net income (3) $ 164,112 $ 141,768 16% $ 43,192 $ 36,232 19% Basic operating earnings per share (3) $ 1.59 $ 1.37 16% $ 0.42 $ 0.35 20% Diluted operating earnings per share (3) $ 1.58 $ 1.34 18% $ 0.42 $ 0.34 24%
(1) Consists of merger related charges of $21,982 and $39,172 and costs to discontinue the correspondent mortgage business of $7,364 and $0 for the years ended December 31, 1999 and 1998 and $(3,889) and $3,798 for merger related charges for the quarters ended December 31, 1999 and 1998, respectively. (2) Excludes pre-tax special charges of $29,346 and $39,172 for the years ended December 31, 1999 and 1998 and $(3,889) and $3,798 for the quarters ended December 31, 1999 and 1998, respectively. (3) Excludes post-tax special charges of $21,690 and $28,944 for the years ended December 31, 1999 and 1998 and $(2,389) and $4,302 for the quarters ended December 31, 1999 and 1998, respectively. NM Not meaningful - -------------------------------------------------------------------------------- 6 Peoples Heritage Financial Group, Inc. and Subsidiaries SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) - --------------------------------------------------------------------------------
(In thousands, except number of shares and per share data) Year Ended December 31, Three Months Ended December 31, ----------------------------- ------------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Net interest income $ 446,247 $ 426,473 $ 114,380 $ 106,233 Net income $ 142,422 $ 112,824 $ 45,581 $ 31,930 Operating net income (1) $ 164,112 $ 141,768 $ 43,192 $ 36,232 Shares outstanding (end of period) 102,181,789 103,801,854 102,181,789 103,801,854 Weighted average shares outstanding: Basic 102,988,690 103,637,875 101,656,431 103,887,703 Diluted 104,112,038 105,767,728 102,537,739 105,490,499 Earnings per share: Basic $ 1.38 $ 1.09 $ 0.45 $ 0.31 Diluted $ 1.37 $ 1.07 $ 0.44 $ 0.30 Operating earnings per share (1): Basic $ 1.59 $ 1.37 $ 0.42 $ 0.35 Diluted $ 1.58 $ 1.34 $ 0.42 $ 0.34 Operating cash earnings per share (2): Basic $ 1.71 $ 1.48 $ 0.45 $ 0.38 Diluted $ 1.69 $ 1.45 $ 0.45 $ 0.37 Shareholders' equity $ 850,977 $ 901,128 $ 850,977 $ 901,128 Book value per share $ 8.33 $ 8.68 $ 8.33 $ 8.68 Tangible book value per share $ 7.22 $ 7.48 $ 7.22 $ 7.48 - ------------------------------------------------------------------------------------------------------------------------ Ratios: Net interest margin (net interest income as a % of average earning assets) (3) 3.67% 4.02% 3.60% 3.90% Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (3) 3.20% 3.46% 3.15% 3.30% Return on average assets 1.08% 0.97% 1.31% 1.07% Operating return on average assets (1) 1.24% 1.22% 1.24% 1.22% Operating cash return on average assets (2) 1.35% 1.33% 1.34% 1.33% Return on average equity 16.36% 13.09% 21.28% 14.21% Operating return on average equity (1) 18.85% 16.45% 20.16% 16.13% Operating cash return on average equity (2) 23.33% 20.76% 24.82% 20.19% Tier 1 leverage capital ratio at end of period 6.60% 7.50% 6.60% 7.50% Efficiency ratio (4) 54.05% 58.00% 53.56% 57.44% Non-performing loans $ 45,888 $ 56,526 $ 45,888 $ 56,526 Total non-performing assets $ 56,356 $ 67,180 $ 56,356 $ 67,180 Non-performing loans as a % of total loans 0.67% 0.80% 0.67% 0.80% Non-performing assets as a % of total assets 0.40% 0.56% 0.40% 0.56% Full service banking offices 221 221 221 221 - ------------------------------------------------------------------------------------------------------------------------
(1) Excludes merger related and special charges of $21,690 and $28,944 after tax for the years ended December 31, 1999 and 1998 and $(2,389) and $4,302 for the quarters ended December 31, 1999 and 1998, respectively. (2) Earnings before special charges and amortization of goodwill and core deposit premiums. (3) Adjusted to fully taxable equivalent basis. (4) Excludes distributions on securities of subsidiary trust, net gains on sales of securities and special charges. - -------------------------------------------------------------------------------- 7 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED AVERAGE BALANCE SHEETS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------- 1999 1998 --------------------- ---------------------- AVERAGE YIELD/ AVERAGE YIELD/ (Dollars in Thousands) BALANCE RATE BALANCE RATE ----------- ------ ----------- ------ ASSETS Loans and leases (1) Residential real estate mortgages $ 1,480,113 7.13% $ 2,919,838 7.35% Commercial real estate mortgages 1,803,266 8.92% 1,611,739 9.52% Commercial loans and leases 1,268,226 8.64% 1,126,061 8.67% Consumer loans and leases 2,294,114 8.49% 2,092,081 8.59% ----------- ----------- 6,845,719 8.34% 7,749,719 8.33% Securities 5,862,306 6.57% 3,010,073 5.97% Federal funds sold & other short-term investments 73,230 5.39% 167,001 5.30% ----------- ----------- Total earning assets 12,781,255 7.51% 10,926,793 7.63% Nonearning assets 1,004,764 898,969 ----------- ----------- Total assets $13,786,019 $11,825,762 =========== =========== LIABILITIES & SHAREHOLDERS' EQUITY Interest-bearing deposits: Regular savings $ 1,264,795 2.01% $ 1,283,063 2.23% Retail money market and NOW accounts 2,176,690 2.47% 2,017,616 2.56% Retail certificates of deposit 3,220,391 4.88% 3,484,536 5.35% Brokered deposits 143,328 5.71% 249,110 5.79% ----------- ----------- Total interest-bearing deposits 6,805,204 3.59% 7,034,325 4.00% Borrowed funds 4,676,190 5.48% 2,387,353 5.30% ----------- ----------- Total interest-bearing liabilities 11,481,394 4.36% 9,421,678 4.33% Demand accounts 1,325,467 1,308,902 Other liabilities 60,579 103,862 Minority interest 68,775 100,000 Shareholders' equity 849,804 891,320 ----------- ----------- Total liabilities, minority interest and shareholders' equity $13,786,019 $11,825,762 =========== =========== Net earning assets $ 1,299,861 $ 1,505,115 =========== =========== Net interest income (fully taxable equivalent) $ 114,966 $ 107,065 Less: fully taxable equivalent adjustments (586) (832) ----------- ----------- Net interest income $ 114,380 $ 106,233 =========== =========== Net interest rate spread (fully taxable equivalent) 3.15% 3.30% Net interest margin (fully taxable equivalent) 3.60% 3.90%
- -------------------------------------------------------------------------------- (1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans. 8 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED AVERAGE BALANCE SHEETS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------- 1999 1998 --------------------- ---------------------- AVERAGE YIELD/ AVERAGE YIELD/ (Dollars in Thousands) BALANCE RATE BALANCE RATE ----------- ------ ----------- ------ ASSETS Loans and leases (1) Residential real estate mortgages $ 1,869,375 7.28% $ 3,238,725 7.48% Commercial real estate mortgages 1,727,687 8.85% 1,600,873 9.50% Commercial loans and leases 1,227,254 8.68% 1,090,919 9.11% Consumer loans and leases 2,163,691 8.57% 2,029,150 8.79% ----------- ----------- 6,988,007 8.31% 7,959,667 8.44% Securities 5,106,436 6.32% 2,593,640 6.29% Federal funds sold & other short-term investments 131,281 4.86% 129,868 4.20% ----------- ----------- Total earning assets 12,225,724 7.44% 10,683,175 7.87% Nonearning assets 959,360 950,440 ----------- ----------- Total assets $13,185,084 $11,633,615 =========== =========== LIABILITIES & SHAREHOLDERS' EQUITY Interest-bearing deposits: Regular savings $ 1,264,822 2.02% $ 1,336,039 2.37% Retail money market and NOW accounts 2,108,881 2.42% 1,927,113 2.53% Retail certificates of deposit 3,339,347 4.99% 3,462,115 5.43% Brokered deposits 179,760 5.37% 283,499 5.83% ----------- ----------- Total interest-bearing deposits 6,892,810 3.66% 7,008,766 4.07% Borrowed funds 3,988,276 5.25% 2,307,034 5.46% ----------- ----------- Total interest-bearing liabilities 10,881,086 4.24% 9,315,800 4.41% Demand accounts 1,294,802 1,213,203 Other liabilities 65,409 142,963 Minority interest 73,078 100,000 Shareholders' equity 870,709 861,649 ----------- ----------- Total liabilities, minority interest and shareholders' equity $13,185,084 $11,633,615 =========== =========== Net earning assets $ 1,344,638 $ 1,367,375 =========== =========== Net interest income (fully taxable equivalent) $ 448,456 $ 429,624 Less: fully taxable equivalent adjustments (2,209) (3,151) ----------- ----------- Net interest income $ 446,247 $ 426,473 =========== =========== Net interest rate spread (fully taxable equivalent) 3.20% 3.46% Net interest margin (fully taxable equivalent) 3.67% 4.02%
- -------------------------------------------------------------------------------- (1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans. -----END PRIVACY-ENHANCED MESSAGE-----