-----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, UmAiziPluWbl1a+lubNGYf2NuLdsceCN+e84eB7pT/jJTkQGHEHcOplKSIxvKJBu KATvWfUKlmtAytzdNw+lkQ== 0000950135-96-001629.txt : 19960404 0000950135-96-001629.hdr.sgml : 19960404 ACCESSION NUMBER: 0000950135-96-001629 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960404 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960403 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: 1934 Act SEC FILE NUMBER: 000-16947 FILM NUMBER: 96544119 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 8-K 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 April 2, 1996 - -------------------------------------------------------------------------------- (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) Exhibit Index appears on page 13. 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ------------------------------------ On April 2, 1996, following receipt of all required regulatory and stockholder approvals, Peoples Heritage Financial Group, Inc. ("PHFG") completed the acquisition of Bank of New Hampshire Corporation ("BNHC") pursuant to an Agreement and Plan of Merger, dated as of October 25, 1995, among PHFG, First Coastal Banks, Inc. ("First Coastal"), a wholly-owned subsidiary of PHFG, and BNHC. The acquisition was effected by means of the merger of First Coastal with and into BNHC (the "Merger"). Upon consummation of the Merger, each share of common stock, no par value with a stated value of $2.50 per share, of BNHC ("BNHC Common Stock") outstanding immediately prior thereto was converted into the right to receive two shares of Common Stock, par value $0.01 per share, of PHFG ("PHFG Common Stock"). Based on 4,064,165 shares of BNHC Common Stock outstanding, a total of 8,128,330 shares of PHFG Common Stock are being issued as a result of consummation of the Merger. On February 16, 1996, The First National Bank of Portsmouth ("FNBP") completed the acquisition of five branch offices located in central and southern New Hampshire from Shawmut Bank NH, which were divested in connection with the merger of Fleet Financial Group, Inc. and Shawmut National Corporation (the "Branch Acquisition"). In connection with this transaction, FNBP assumed approximately $161 million of deposits and acquired $218.3 million of loans, consisting of $177.6 million of single-family residential loans, $34.9 million of commercial real estate and commercial business loans and $5.8 million of consumer loans. For additional information, reference is made to Item 7 below. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS ------------------------------------------------------------------ (a) The following consolidated financial statements of BNHC are incorporated by reference to the Report on Form 10-K for the year ended December 31, 1995 filed by BNHC with the Securities and Exchange Commission on March 28, 1996: Consolidated Balance Sheets - December 31, 1995 and 1994 Consolidated Statements of Income - Years ended December 31, 1995, 1994 and 1993 Consolidated Statements of Changes in Shareholders' Equity - Years ended December 31, 1995, 1994 and 1993 Consolidated Statements of Cash Flows - Years ended December 31, 1995, 1994 and 1993 Notes to Consolidated Financial Statements 2 3 (b) The following pro forma financial statements of PHFG are included pursuant to Item 7(b) of Form 8-K: PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION The following unaudited pro forma combined condensed consolidated balance sheet combines the consolidated historical balance sheets of PHFG and BNHC and the assets and liabilities involved in the only other prospective acquisition pending at December 31, 1995 the Branch Acquisition - assuming the Merger was consummated and such assets and liabilities were acquired as of December 31, 1995, on a pooling of interests accounting basis with respect to the Merger and on a purchase accounting basis with respect to the Branch Acquisition. The following unaudited pro forma combined condensed consolidated statements of operations present the combined consolidated statements of operations of PHFG and BNHC, as well as the acquisition of Bankcore, Inc. ("Bankcore") and the Branch Acquisition (collectively, the "Purchase Acquisitions"), assuming (i) PHFG and BNHC had been combined at the beginning of each period presented on a pooling of interests basis with respect to the Merger and (ii) the Purchase Acquisitions had been consummated as of January 1, 1995 under the purchase accounting basis. Pro forma financial information for the acquisition of Bankcore and the Branch Acquisition reflects information from January 1, 1995 to the actual consummation date (July 1, 1995) in the case of the acquisition of Bankcore and to December 31, 1995 in the case of the Branch Acquisition, which was completed on February 16, 1996. Certain insignificant reclassifications have been reflected in the pro forma information to conform statement presentations. The pro forma financial data does not give effect to anticipated cost savings in connection with the Merger and the Purchase Acquisitions. The pro forma information presented is not necessarily indicative of the results of operations or the combined financial position that would have resulted had the Merger and the Purchase Acquisitions been consummated at the beginning of the applicable periods indicated, nor is it necessarily indicative of the results of operations in future periods or the future financial position of the combined entities. The pro forma information should be read in conjunction with the historical consolidated financial statements of PHFG and BNHC, including the related notes. Reference is made in this regard to the Report on Form 10-K filed by PHFG and BNHC for the year ended December 31, 1995, respectively. 3 4 PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET PHFG, BNHC AND THE PURCHASE ACQUISITIONS DECEMBER 31, 1995 (Unaudited) (In Thousands, Except Share Data)
PHFG and Pro Pro Forma BNHC Branch Forma PHFG BNHC Adjustments Combined Acquisition Combined ---- ---- ----------- -------- ----------- -------- (1) (1)(2) ASSETS Cash and due from banks $ 124,153 $ 66,291 $ 0 $ 190,444 $ 0 $ 190,444 Federal funds sold 58,255 42,000 0 100,255 0 100,255 Securities available for sale at market value 485,218 281,430 0 766,648 (32,707) 733,941 Loans held for sale 70,979 0 0 70,979 0 70,979 Loans and leases 2,217,637 560,880 0 2,778,517 218,291 2,996,808 ---------- -------- ------- ---------- -------- ---------- Less: Allowance for loan and lease losses 49,138 11,837 0 60,975 4,310 65,285 ---------- -------- ------- ---------- -------- ---------- Net loans and leases 2,168,499 549,043 0 2,717,542 213,981 2,931,523 ---------- -------- ------- ---------- -------- ---------- Premises and equipment 44,358 11,245 0 55,603 472 56,075 Goodwill and other intangibles 21,176 1,616 0 22,792 18,230 41,022 Other real estate and repossessed assets owned 6,601 7,606 0 14,207 0 14,207 Other assets 99,430 18,605 0 118,035 1,113 119,148 ---------- -------- ------- ---------- -------- ---------- Total assets $3,078,669 $977,836 $ 0 $4,056,505 $201,089 $4,257,594 ========== ======== ======= ========== ======== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Regular savings $303,504 $254,393 $ 0 $ 557,897 $ 39,940 $ 597,837 Money market access accounts 448,998 41,577 0 490,575 0 490,575 Certificates of deposit 1,124,104 238,971 0 1,363,075 89,237 1,452,312 NOW accounts 215,529 135,952 0 351,481 0 351,481 Demand deposits 269,830 166,833 0 436,663 31,694 468,357 ---------- -------- ------- ---------- -------- ---------- 2,361,965 837,726 0 3,199,691 160,871 3,360,562 ---------- -------- ------- ---------- -------- ---------- Federal funds purchased 1,500 0 0 1,500 0 1,500 Securities sold under repurchase agreements 139,942 41,015 0 180,957 0 180,957 Borrowings from the Federal Home Loan Bank of Boston 252,446 0 0 252,446 40,000 292,446 Other borrowings 18,928 3,102 0 22,030 0 22,030 Other liabilities 33,420 11,536 2,110 (3) 47,066 218 47,284 ---------- -------- ------- ---------- -------- ---------- Total liabilities 2,808,201 893,379 2,110 (3) 3,703,690 201,089 3,904,779 ---------- -------- ------- ---------- -------- ---------- Shareholders' equity: Preferred Stock, par value $0.01; 5,000,000 shares authorized, none issued 0 0 0 0 0 Common Stock, par value $0.01; 30,000,000 shares authorized: PHFG 175 81 (4) 256 0 256 BNHC 10,160 (10,160)(4) 0 0 0 Paid in capital 186,900 27,289 10,079 (4) 224,268 0 224,268 Retained earnings 88,951 45,491 (2,110)(3) 132,332 0 132,332 Net unrealized gain (loss) on securities available for sale 2,247 1,517 0 3,764 0 3,764 Treasury stock at cost (7,805) 0 0 (7,805) 0 (7,805) ---------- -------- ------- ---------- -------- ---------- Total shareholders' equity 270,468 84,457 (2,110)(3) 352,815 0 352,815 ---------- -------- ------- ---------- -------- ---------- Total liabilities and shareholders' equity $3,078,669 $977,836 $ 0 $4,056,505 $201,089 $4,257,594 ========== ======== ======= ========== ======== ==========
4 5 Notes to Pro Forma Combined Condensed Consolidated Balance Sheet (1) During the period from January 1, 1995 through December 31, 1995, PHFG completed or had pending the following acquisitions accounted for under the purchase method: (i) the acquisition of five branch offices and related deposits of approximately $160 million, as well as approximately $218 million of loans, from Shawmut Bank NH, which was consummated on February 16, 1996, (ii) the acquisition of Bankcore for an aggregate of 751,600 shares of PHFG Common Stock and $9.6 million of cash and PHFG Debentures due 2000 (principal amount of $8.8 million), which was completed on July 1, 1995 and (iii) the acquisition of seven branch offices and related deposits of $46.1 million, as well as $17.1 million of loans, from Fleet Bank of Maine for $838,000, which was completed on June 15, 1995. Because the purchase of branch offices from Fleet Bank of Maine does not constitute a sufficient continuity of operations and additional financial data is not available to develop meaningful and reliable pro forma income statement information with respect to such acquisition, the pro forma combined condensed consolidated statements of operations presented herein do not include any pro forma adjustments related thereto. Goodwill related to the acquisition of Bankcore amounted to $3.4 million, deposit base premium related to the Branch Acquisition amounted to $18.2 million and deposit base premium related to the acquisition of seven branch offices from Fleet Bank of Maine amounted to $838,000. In connection with the acquisition of Bankcore, the pro forma financial information presented herein includes actual repurchases of 751,600 shares of PHFG Common Stock for an aggregate of $9.6 million. The dedicated stock repurchase program was completed for the expressed purpose of reissuing the repurchased shares in conjunction with the Bankcore transaction. The pro forma financial information presented herein assumes the Bankcore transaction was financed through a combination of PHFG Debentures due 2000 and cash obtained from the sale of investments used to repurchase the 751,600 shares of PHFG Common Stock. (2) The pending Branch Acquisition reflects PHFG's finance of the purchase through a combination of borrowings and the sale of securities available for sale. The allowance for loan and lease losses represents the discount on the loans acquired because in the judgment of management the discount substantially represents an adjustment for credit risk. (3) The restructuring charges relate primarily to terminations of employment contracts and severance obligations ($600,000) and professional fees ($1.5 million). (4) Represents the par value of PHFG Common Stock issued in connection with the Merger, with related adjustment to paid-in capital. The PHFG Common Stock issued in connection with the Merger was calculated by multiplying the number of outstanding shares of BNHC Common Stock immediately prior thereto (4,064,165) by the two-for-one exchange ratio. 5 6 PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS PHFG, BNHC AND THE PURCHASE ACQUISITIONS YEAR ENDED DECEMBER 31, 1995 (Unaudited) (In Thousands, Except Share Data)
PHFG, Bankcore and Pro BNHC Branch Forma PHFG Bankcore BNHC Combined Acquisition Combined ---- -------- ---- -------- ----------- -------- (1) (3) (3) (2) (3) Interest and dividend income: Interest and fees on loans and leases $ 203,968 $3,269 $ 50,495 $ 257,732 $18,203 $ 275,935 Interest on mortgage-backed investments 12,627 0 0 12,627 0 12,627 Interest on other investments 17,312 1,124(4) 20,431 38,867 (1,754) 37,113 Dividends on equity securities 1,692 0 0 1,692 0 1,692 ---------- ------ --------- ---------- ------- ---------- Total interest and dividend income 235,599 4,393 70,926 310,918 16,449 327,367 ---------- ------ --------- ---------- ------- ---------- Interest expense: Interest on deposits 86,171 1,795 22,037 110,003 9,167(7) 119,170 Interest on borrowed funds 24,892 431(4) 1,794 27,117 2,400 29,517 ---------- ------ --------- ---------- ------- ---------- Total interest expense 111,063 2,226 23,831 137,120 11,567 148,687 ---------- ------ --------- ---------- ------- ---------- Net interest income 124,536 2,167 47,095 173,798 4,882 178,680 Provision for loan losses 2,430 109 1,800 4,339 0 4,339 ---------- ------ --------- ---------- ------- ---------- Net interest income after provision for loan losses 122,106 2,058 45,295 169,459 4,882 174,341 ---------- ------ --------- ---------- ------- ---------- Noninterest income: Mortgage banking services 10,572 0 0 10,572 0 10,572 Customer services 8,298 245 3,216 11,759 301 12,060 Trust and investment advisory services 1,621 0 4,229 5,850 0 5,850 Loan related services 1,059 0 0 1,059 0 1,059 Net securities gains (losses) 116 483 0 599 0 599 Net gains on sales of consumer loans 0 0 0 0 0 0 Other noninterest income 160 279 2,685 3,124 0 3,124 ---------- ------ --------- ---------- ------- ---------- 21,826 1,007 10,130 32,963 301 33,264 ---------- ------ --------- ---------- ------- ---------- Noninterest expenses: Salaries and employee benefits 48,878 1,023 18,942 68,843 939 69,782 Occupancy 7,531 281 3,173 10,985 0 10,985 Data processing 7,073 0 1,984 9,057 0 9,057 Equipment 4,902 0 1,752 6,654 0 6,654 Advertising and marketing 3,710 0 1,015 4,725 0 4,725 Deposit and other assessments 3,474 127 955 4,556 192 4,748 Collection and carrying costs of nonperforming assets 1,485 0 997 2,482 0 2,482 Other noninterest expenses 15,604 959(5) 6,354(8) 22,917 753 23,670 ---------- ------ --------- ---------- ------- ---------- 92,657 2,390 35,172 130,219 1,884 132,103 ---------- ------ --------- ---------- ------- ---------- Income before income tax expense (benefit) 51,275 675 20,253 72,203 3,299 75,502 Applicable income tax expense (benefit) 17,243 (115)(6) 7,415 24,543 1,155(6) 25,698 ---------- ------ --------- ---------- ------- ---------- Net income (loss) $ 34,032 $790 $ 12,838 $ 47,660 $ 2,144 $ 49,804 ========== ====== ========= ========== ======= ========== Earnings per share $ 2.05 $ 3.16 $ 1.93 $ 2.02 Average shares outstanding 16,569,063 4,064,165 24,697,393 24,697,393
6 7 PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS PHFG, BNHC AND THE PURCHASE ACQUISITIONS YEAR ENDED DECEMBER 31, 1994 (Unaudited) (In Thousands, Except Share Data)
Pro Forma PHFG BNHC Combined ---- ---- -------- (3) Interest and dividend income: Interest and fees on loans and leases $ 170,038 $ 45,790 $ 215,828 Interest on mortgage-backed investments 12,409 145 12,554 Interest on other investments 12,417 14,706 27,123 Dividends on equity securities 1,532 211 1,743 ---------- --------- ---------- Total interest and dividend income 196,396 60,852 257,248 ---------- --------- ---------- Interest expense: Interest on deposits 68,224 19,696 87,920 Interest on borrowed funds 19,050 1,032 20,082 ---------- --------- ---------- Total interest expense 87,274 20,728 108,002 ---------- --------- ---------- Net interest income 109,122 40,124 149,246 Provision for loan losses 1,857 1,517 3,374 ---------- --------- ---------- Net interest income after provision for loan losses 107,265 38,607 145,872 ---------- --------- ---------- Noninterest income: Mortgage banking services 8,065 307 8,372 Customer services 6,765 3,931 10,696 Trust and investment advisory services 1,569 3,902 5,471 Loan related services 1,016 1,291 2,307 Net securities gains (losses) (419) 165 (254) Net gains on sales of consumer loans 33 0 33 Other noninterest income 1,489 92 1,581 ---------- --------- ---------- 18,518 9,688 28,206 ---------- --------- ---------- Noninterest expenses: Salaries and employee benefits 43,563 18,309 61,872 Occupancy 7,438 3,122 10,560 Data processing 6,174 1,248 7,422 Equipment 4,413 1,669 6,082 Advertising and marketing 3,692 1,055 4,747 Deposit and other assessments 5,735 2,183 7,918 Collection and carrying costs of nonperforming assets 4,295 1,590 5,885 Other noninterest expenses 15,448 6,434 21,882 ---------- --------- ---------- 90,758 35,610 126,368 ---------- --------- ---------- Income before income tax expense 35,025 12,685 47,710 Applicable income tax expense 9,588 4,074 13,662 ---------- --------- ---------- Net income (loss) $ 25,437 $ 8,611 $ 34,048 ========== ========= ========== Earnings per share $1.52 $2.12 $1.37 Average shares outstanding 16,719,800 4,065,000 24,849,800
7 8 PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS PHFG AND BNHC YEAR ENDED DECEMBER 31, 1993 (Unaudited) (In Thousands, Except Share Data)
Pro Forma PHFG BNHC Combined ---- ---- -------- (3) Interest and dividend income: Interest and fees on loans and leases $ 157,239 $ 51,608 $ 208,847 Interest on mortgage-backed investments 10,266 224 10,490 Interest on other investments 12,446 10,865 23,311 Dividends on equity securities 1,082 22 1,104 ---------- --------- ---------- Total interest and dividend income 181,033 62,719 243,752 ---------- --------- ---------- Interest expense: Interest on deposits 74,728 22,065 96,793 Interest on borrowed funds 14,707 805 15,512 ---------- --------- ---------- Total interest expense 89,435 22,870 112,305 ---------- --------- ---------- Net interest income 91,598 39,849 131,447 Provision for loan losses 9,779 4,268 14,047 ---------- --------- ---------- Net interest income after provision for loan losses 81,819 35,581 117,400 ---------- --------- ---------- Noninterest income: Mortgage banking services 6,176 1,163 7,339 Customer services 6,671 3,791 10,462 Trust and investment advisory services 1,373 3,321 4,694 Loan related services 1,588 1,323 2,911 Net securities gains 1,001 182 1,183 Net gains on sales of consumer loans 2,576 0 2,576 Other noninterest income 319 44 363 ---------- --------- ---------- 19,704 9,824 29,528 ---------- --------- ---------- Noninterest expenses: Salaries and employee benefits 38,636 17,651 56,287 Occupancy 6,794 3,043 9,837 Data processing 4,965 815 5,780 Equipment 4,329 1,839 6,168 Advertising and marketing 2,026 938 2,964 Deposit and other assessments 5,843 2,524 8,367 Collection and carrying costs of nonperforming assets 11,640 3,200 14,840 Other noninterest expenses 13,510 5,865 19,375 ---------- --------- ---------- 87,743 35,875 123,618 ---------- --------- ---------- Income before income tax expense (benefit) 13,780 9,530 23,310 Applicable income tax expense (benefit) (2,339) 3,138 799 ---------- --------- ---------- Net income $ 16,119 $ 6,392 $ 22,511 ========== ========= ========== Earnings per share $ 0.97 $ 1.80 $ 0.95 Average shares outstanding 16,601,195 3,552,000 23,705,195
8 9 Notes to Pro Forma Combined Condensed Consolidated Statements of Operations (1) The operations of Bankcore for the six months ended June 30, 1995 are included in the operations of Bankcore for the year ended December 31, 1995. The operations of Bankcore subsequent to June 30, 1995 are included in the operations of PHFG. (2) The pro forma operations of the Branch Acquisition assume the following: (i) interest rates on loans and deposits approximate the yields on actual loans and deposits acquired (including amortization of the deposit premium over seven years), (ii) reduced investment income to reflect the sale of securities available for sale, at the weighted average rate earned on the securities actually sold by PHFG in conjunction with the purchase, (iii) interest expense on additional borrowings, at short term borrowing rates paid to the Federal Home Loan Bank of Boston in conjunction with the purchase, and (iv) estimated noninterest income and noninterest expenses, including FDIC deposit insurance premiums at actual rates during the periods presented. (3) PHFG expects to achieve operating cost savings following the Merger and consummation of the Purchase Acquisitions, primarily through the consolidation of certain data processing and other back office operations. The operating cost savings are expected to be achieved in various amounts at various times during the periods subsequent to the consummation of such transactions, and not ratably over or at the beginning or end of such periods. No adjustment has been reflected in the pro forma combined statements of operations for the anticipated cost savings. For the reasons noted above, it should not be assumed that the dilution in PHFG's earnings per share reflected in the pro forma combined condensed consolidated statements of operations will represent actual dilution with respect to the Merger or the Purchase Acquisitions. (4) Includes the implied financing costs associated with the acquisition of Bankcore. The interest expense of the PHFG Debentures due 2000 is reflected on an interest-only basis for the Debentures that were actually issued at the time of the transaction for the applicable periods presented. As a result, interest on borrowed funds has been increased by $386,000 during the year ended December 31, 1995. Interest income on other investments has been adjusted to reflect the foregone interest income associated with the cost of the PHFG Common Stock that was acquired in the open market in a dedicated repurchase program; the shares were subsequently reissued in conjunction with the acquisition of Bankcore, and the cash paid in lieu of PHFG Debentures due 2000. As a result, interest on other investments has been decreased by $290,000 during the year ended December 31, 1995. (5) Includes the amortization of goodwill associated with the purchase of Bankcore, which amounted to $114,000 during the year ended December 31, 1995 and reflects only six months of amortization to adjust for the July 1, 1995 acquisition date. 9 10 (6) Taxable items have been tax effected at an effective tax rate of 34%. (7) Reflects the amortization of the estimated deposit premium related to the Branch Acquisition, which amounted to $2.6 million during the year ended December 31, 1995. The deposit premium is being amortized over seven years. (8) Excludes $3.7 million of non-recurring expenses related to the Merger (consisting primarily of $2.7 million of expenses relating to employment contracts) incurred during the year ended December 31, 1995, as well as an additional estimated $2.1 million of non-recurring expenses related to the Merger, as indicated in Note 3 to the Pro Forma Combined Condensed Consolidated Balance Sheet. (c) The following exhibits are filed with or are incorporated by reference in this Current Report on Form 8-K:
Exhibit Number Description Location -------------- ----------- -------- 2 Agreement and Plan of Merger, (1) dated as of October 25, 1995, among Peoples Heritage, First Coastal and BNHC 10(a) Stock Option Agreement, dated as (1) of October 25, 1995, between Peoples Heritage (as grantee) and BNHC (as issuer) 10(b) Stock Option Agreement, dated as (1) of October 25, 1995, between Peoples Heritage (as issuer) and BNHC (as grantee) 10(c) Stockholder Agreement, dated as (1) of October 25, 1995, among Peoples Heritage and certain stockholders of BNHC 20(a) Press Release issued on October (1) 25, 1995 with respect to the Agreement 20(b) Press release issued on February 20, 1996 with respect to the Branch Acquisition
10 11
Exhibit Number Description Location -------------- ----------- -------- 20(c) Press release issued on April 1, 1996 with respect to consummation of the Merger 23 Consent of Ernst & Young LLP - -------------------- (1) Incorporated by reference to the Current Report on Form 8-K filed by PHFG with the Securities and Exchange Commission on November 3, 1995.
11 12 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. Date: April 3, 1996 By: /s/ Peter J. Verrill -------------------- Peter J. Verrill Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer 12 13 EXHIBIT INDEX
Exhibit Number Description Location -------------- ----------- -------- 2 Agreement and Plan of Merger, (1) dated as of October 25, 1995, among Peoples Heritage, First Coastal and BNHC 10(a) Stock Option Agreement, dated as (1) of October 25, 1995, between Peoples Heritage (as grantee) and BNHC (as issuer) 10(b) Stock Option Agreement, dated as (1) of October 25, 1995, between Peoples Heritage (as issuer) and BNHC (as grantee) 10(c) Stockholder Agreement, dated as (1) of October 25, 1995, among Peoples Heritage and certain stockholders of BNHC 20(a) Press Release issued on October (1) 25, 1995 with respect to the Agreement 20(b) Press release issued on February 20, 1996 with respect to the Branch Acquisition 20(c) Press Release issued on April 1, 1996 with respect to consummation of the Merger 23 Consent of Ernst & Young LLP - ----------------------- (1) Incorporated by reference to the Current Report on Form 8-K filed by PHFG with the Securities and Exchange Commission on November 3, 1995.
13 EX-20.B 2 EXHIBIT 20B PRESS RELEASE 2/20/96 1 EXHIBIT 20(b) PEOPLES HERITAGE FINANCIAL GROUP, INC. NEWS RELEASE For Immediate Release For Further Information, Contact: Brian Arsenault, Corporate Communications Officer (207) 761-8517 Norman Bilodeau, President, The First National Bank of Portsmouth (603) 433-2961 Peoples Heritage Completes Purchase of Five Shawmut Bank NH Branches Portland, Maine, February 20, 1996 -- Peoples Heritage Financial Group, Inc. (NASDAQ:PHBK) announced today that, at the close of business on Friday, February 16, 1996, it completed the acquisition of five branches of the former Shawmut Bank NH that were divested as part of the merger of Fleet Financial Group, Inc. and Shawmut National Corporation. The branches were converted to offices of The First National Bank of Portsmouth, Peoples' New Hampshire banking subsidiary, over the holiday weekend. Two of the five branches are in Manchester. The others are in Bedford, Nashua and Littleton. The branches have approximately $160 million in deposits. In addition to various assets related to the acquired branches, The First National Bank of Portsmouth acquired approximately $217 million of loans in concert with the transaction, which consist primarily of approximately $179 million of single-family residential loans. "The acquisition of the five Shawmut branches is the first and smaller of two steps we will take in New Hampshire this year to move from a regional to a statewide presence," said William J. Ryan, President, Chairman and Chief Executive Officer of Peoples Heritage Financial Group, Inc. "We now have an increasing banking presence in the important Merrimack Valley region and southern New Hampshire, where much of the state's population and business activity is concentrated." Prior to the acquisition of the five branches, The First National Bank of Portsmouth operated 15 branches, 10 in the seacoast area of New Hampshire and five in the North Conway area of the state. During the second quarter of 1996, Peoples Heritage Financial Group expects to receive regulatory approval to combine the Bank of New Hampshire, with 2 29 branches and assets of $977 million, with its New Hampshire banking operations. The resultant $1.7 billion bank will be the third largest in New Hampshire and operate under the Bank of New Hampshire name. Peoples Heritage Financial Group, Inc. is a $3.3 billion multibank and financial services holding company headquartered in Portland, Maine. The Company's Maine bank, Peoples Heritage Bank, has assets of approximately $2.4 billion and operates 61 branches throughout the state. Upon approval of the merger of Bank of New Hampshire, anticipated during the second quarter, total Company assets will be approximately $4.3 billion and its New Hampshire bank will operate over 40 branches. 2 EX-20.C 3 EXHIBIT 20.C PRESS RELEASE 4/1/96 1 EXHIBIT 20(c) PEOPLES HERITAGE FINANCIAL GROUP, INC. NEWS RELEASE For Immediate Release For Further Information, Contact Brian Arsenault, Corporate Communications Officer (207) 761-8517 Peoples Heritage Completes Bank of New Hampshire Corporation Purchase Portland, Maine, April 1, 1996 -- Peoples Heritage Financial Group, Inc. (NASDAQ:PHBK) announced today that it will finalize its acquisition of Bank of New Hampshire Corporation (NASDAQ:BNHC) on April 2. All regulatory clearances have been received. Following tomorrow's completion of the transaction, Portland, Maine headquartered Peoples Heritage Financial Group will be a $4.3 billion bank holding company with the second largest market share in Maine, through its Maine subsidiary, Peoples Heritage Bank, and the third largest market share in New Hampshire, through its two New Hampshire subsidiaries, which will be combined by mid-year. Bank of New Hampshire operates 29 banking offices in south, central and seacoast New Hampshire. The Company's existing New Hampshire bank, The First National Bank of Portsmouth, operates 21 offices primarily in the seacoast region of New Hampshire and the state's central and Mount Washington Valley areas, will be merged into Bank of New Hampshire. "This is a big step in becoming Northern New England's premier community bank," said William J. Ryan, the Company's Chairman, President and Chief Executive Officer. "Our financial performance should increase virtually from the outset as we broaden our market reach with the highly successful BNH franchise." Under the terms of the transaction, BNHC shareholders will receive two shares of Peoples Heritage common stock for each share of BNHC common stock. It is anticipated that a total of 8,128,330 shares of Peoples Heritage common stock will be issued in connection with the acquisition. Based on a closing price of $20.75 per share of Peoples Heritage common stock on October 25, 1995, when the acquisition was announced, the transaction was valued at $168.7 million and BNHC shareholders would receive $41.50 in Peoples Heritage common stock for each 2 share of BNHC common stock. The exchange equates to 2.04 times BNHC's book value at September 30, 1995 and 13.2 times its annualized earnings through the nine months ended September 30, 1995. The closing price of Peoples Heritage common stock on March 29, 1996 was $21.75 per share. The transaction will be accounted for as a pooling of interests. "We believe that our shareholders are receiving a very fair price and that Peoples Heritage is receiving very good value," said Paul R. Shea, President and Chief Executive Officer of Bank of New Hampshire. "We gain significant strength in products and marketing from Peoples Heritage and our customers will still receive the same community banking approach and commitment to the community that we have traditionally provided." Peoples Heritage Financial Group ended 1995 as a $3.1 billion bank and financial services holding company. In February, its asset size increased to $3.3 billion with the completion of the purchase of five branches of Shawmut Bank NH divested as part of the Fleet/Shawmut merger. Bank of New Hampshire Corporation adds another $1 billion in assets, making Peoples Heritage one of the six largest banking companies in New England. 2 EX-23 4 EX-23 CONSENT OF ERNST & YOUNG 1 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Nos. 33-22205, 33-22206 and 33-80310) on Form S-8 of Peoples Heritage Financial Group, Inc. of our report dated January 18, 1996, with respect to the consolidated financial statements of Bank of New Hampshire Corporation as of December 31, 1995 and 1994, and for each of the three years in the period ended December 31, 1995, incorporated by reference in this Current Report (Form 8-K) of Peoples Heritage Financial Group, Inc. Ernst & Young LLP Manchester, New Hampshire April 3, 1996 -----END PRIVACY-ENHANCED MESSAGE-----