-----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, JQjmCVy3AuHP864/vwURcbUKn64wk3rxTtzypUhJw7jVGZ55nte01lOlnU8dAKdd ZjevS4kS30/GEEdfVGQdMA== 0000950135-99-002079.txt : 19990426 0000950135-99-002079.hdr.sgml : 19990426 ACCESSION NUMBER: 0000950135-99-002079 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990421 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990423 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: 99599634 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, INC. 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 April 21, 1999 - -------------------------------------------------------------------------------- (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 At the beginning of the day on April 21, 1999, Peoples Heritage Financial Group, Inc. released the press release included as an exhibit to this Current Report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) Exhibit: 99.1 Press Release, dated April 21, 1999. 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: April 23, 1999 EX-99.1 2 PRESS RELEASE 1 Exhibit 99.1 FOR IMMEDIATE RELEASE FOR MORE INFORMATION, CONTACT BRIAN ARSENAULT, SENIOR VICE PRESIDENT, CORPORATE COMMUNICATIONS (207) 761-8517 RECORD QUARTERLY OPERATING EARNINGS AT PEOPLES HERITAGE (Earnings conference call, 1:30 p.m. eastern time, today, April 21, 1999. Conference call telephone number: 1 888 695-0608, confirmation code 669464. 24-hour replay telephone number: 1 888 203-1112) Portland, Maine, April 21, 1999 -- Peoples Heritage Financial Group, Inc. (NASDAQ: PHBK) today announced record quarterly operating net income of $37.6 million, or 36 cents per diluted share, for the first quarter ended March 31, 1999. Operating net income, which is exclusive of acquisition and other special charges, was up 19 percent from $31.7 million, or 30 cents per diluted share, from the first quarter of 1998. Operating cash net income, exclusive of goodwill and deposit premiums, was up 17 percent to $40.5 million, or 39 cents per diluted share, for the quarter ended March 31, 1999 from $34.6 million, or 33 cents per diluted share, for the quarter ended March 31, 1998. "The strengths of the quarter were strong growth in commercial and consumer lending and expense control," said William J. Ryan, Company president, chairman and chief executive officer. "The loan growth reflects our ability to bring new loan products to new markets entered through acquisition, as well as success in our established markets. The expense control reflects cost savings resulting from the successful integration of CFX Corporation, acquired about a year ago, and SIS Bancorp, Inc., acquired on January 1 of this year." Commercial business loans and leases at March 31, 1999 were up 13 percent over a year ago. Consumer loans were up 7 percent for the same period. Noninterest expenses, exclusive of special charges primarily related to the acquisition of SIS, were down to $77.8 million for the quarter ended March 31, 1999 from $84.1 million for the quarter ended March 31, 1998. Key categories of fee income also contributed to the record quarter, including insurance commissions and trust and investment advisory services income, up 82% and 23%, respectively, in the quarter ended March 31, 1999 from the same quarter a year ago. Regular account fees and other customer service fees increased 14% during the same period. (more) 2 2 The acquisition of SIS Bancorp was accounted for as a pooling of interests. As a result, all financial data for all periods has been restated to reflect the combined financial condition and results of operations as if the acquisition had been in effect for all such periods. Merger related charges for the quarter ended March 31, 1999 totaled $18.8 million on an after-tax basis. Severance and transactions costs, such as legal, advisory and accounting fees, made up the bulk of the SIS acquisition related charges. Other special charges in the quarter were $5.3 million in after-tax charges related to the Company exiting the correspondent mortgage business. As a result of the merger related charges and charges related to the exiting of the correspondent mortgage lending business, net income was $13.5 million, or 13 cents per diluted share for the quarter ended March 31, 1999. Key performance ratios showed improvement over the same period a year ago. Operating return on average equity (ROE) for the quarter ended March 31, 1999 was 17.23%, up from 15.06% for the same quarter a year ago. Operating return on average assets (ROA) was 1.25% for the quarter ended March 31, 1999, up from 1.13% for the same quarter a year ago. Cash ROE and cash ROA for the quarter ended March 31, 1999 were 21.60% and 1.37%, respectively, as compared to 18.83% and 1.24%, respectively, for the same quarter a year ago. The Company's efficiency ratio improved to 55.17% at March 31, 1999, down from 61.44% at March 31, 1998. Asset quality also strengthened during the first quarter of 1999. Nonperforming assets at March 31, 1999 were $60.1 million, down from $80.1 million at March 31, 1998 and from $67.2 million at year-end 1998. The Company's reserve coverage of nonperforming loans was 229 percent at March 31, 1999, up from 161 percent at March 31, 1998 and from 196 percent at year-end 1998. Based on 104.1 million shares outstanding at March 31, 1999, book value was $8.70 per share, up from $8.39 per share at March 31, 1998. Trust preferred securities were reduced by 30% in the quarter ended March 31, 1999 as the result of the Company repurchasing $30 million of the securities. Shareholders' equity at March 31, 1999 was $905.2 million. Peoples Heritage Financial Group is a multi-state financial services holding company with total assets of $12.6 billion, ranking it fifth among New England banking companies; fourth once the anticipated merger of Fleet Financial Group and BankBoston is completed. The Company's banking subsidiaries include Peoples Heritage Bank in Maine and Bank of New Hampshire, each with the leading deposit market share in their respective states; Family/SIS Bank in Massachusetts with a strong market presence in the traditional Family market area in northeastern Massachusetts and the traditional SIS market in the Springfield region; and Glastonbury Bank and Trust Company in north central Connecticut. The Company also engages in financial planning and investment advisory services through Heritage Investment Planning Services, and insurance brokerage through Morse, Payson and Noyes Insurance and its subsidiaries, Catalano Insurance in Massachusetts and A.D. Davis in New Hampshire, as well as mortgage banking, trust services and equipment leasing. (end) 3 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 31, ----------------------------- % (In Thousands) 1999 1998 Change ----------- ----------- ------ ASSETS Cash and due from banks $ 325,053 $ 500,973 -35% Federal funds sold and other short-term investments 151,383 160,542 -6% Securities available for sale 4,133,343 2,182,793 89% Securities held to maturity -- 241,692 -100% Loans and leases held for sale 296,801 929,588 -68% Loans and leases: Residential real estate mortgages 2,099,833 2,600,326 -19% Commercial real estate mortgages 1,647,042 1,597,744 3% Commercial business loans and leases 1,197,341 1,063,334 13% Consumer loans and leases 2,123,251 1,991,226 7% ----------- ----------- Total loans and leases 7,067,467 7,252,630 -3% Less: Allowance for loan losses 110,573 112,101 -1% ----------- ----------- Loans and leases, net 6,956,894 7,140,529 -3% Premises and equipment 143,810 153,236 -6% Goodwill and other intangible assets 121,401 125,900 -4% Mortgage servicing rights 45,266 73,324 -38% Other real estate and repossessed assets owned 12,221 10,428 17% Other assets 408,152 305,835 33% ----------- ----------- $12,594,324 $11,824,840 7% =========== =========== - -------------------------------------------------------------------------------------------------------------------- LIABILITIES & SHAREHOLDERS' EQUITY Deposits: Regular savings $ 1,300,211 $ 1,377,150 -6% Retail money market and NOW accounts 2,062,179 1,871,395 10% Retail certificates of deposit 3,440,780 3,493,812 -2% Brokered deposits 204,815 331,163 -38% Demand deposits 1,209,169 1,222,465 -1% ----------- ----------- Total deposits 8,217,154 8,295,985 -1% ----------- ----------- Federal funds purchased -- 110,000 -100% Borrowings from Federal Home Loan Bank 2,809,865 1,739,251 62% Securities sold under repurchase agreements 519,801 556,028 -7% Other borrowings 24,340 21,266 14% Other liabilities 47,986 129,589 -63% ----------- ----------- Total liabilities 11,619,146 10,852,119 7% ----------- ----------- Company obligated, mandatorily redeemable securities of subsidiary trust holding solely parent junior subordinated debentures 70,000 100,000 -30% Shareholders' equity 905,178 872,721 4% ----------- ----------- $12,594,324 $11,824,840 7% =========== ===========
4 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(In Thousands, except number of Three Months Ended March 31, shares and per share data) ------------------------------- % 1999 1998 Change ------------ ------------ ------ Interest and dividend income $ 210,248 $ 209,679 0% Interest expense 102,310 103,127 -1% ------------ ------------ Net interest income 107,938 106,552 1% Provision for loan and lease losses 3,565 3,249 10% ------------ ------------ Net interest income after provision for loan and lease losses 104,373 103,303 1% ------------ ------------ Noninterest income: Customer services 10,812 9,485 14% Mortgage banking services 4,205 7,367 -43% Trust and investment advisory services 4,445 3,607 23% Net gains on sales of securities 18 2,050 -99% Insurance commissions 5,282 2,898 82% Other noninterest income 4,672 3,309 41% ------------ ------------ 29,434 28,716 3% ------------ ------------ Noninterest expense: Salaries and employee benefits 40,170 42,812 -6% Data processing 7,006 5,814 21% Occupancy and equipment expense 11,756 13,084 -10% Distributions on securities of subsidiary trust 1,986 2,244 -11% Amortization of goodwill & deposit premiums 2,968 2,862 4% Special charges (1) 33,235 900 NM Other noninterest expense 13,883 17,272 -20% ------------ ------------ 111,004 84,988 31% ------------ ------------ Income before income tax expense 22,803 47,031 -52% Income tax expense 9,309 15,915 -42% ------------ ------------ Net income $ 13,494 $ 31,116 -57% ============ ============ Weighted average shares outstanding: Basic 103,429,129 102,965,178 0% Diluted 104,851,511 105,486,888 -1% Earnings per share: Basic $ 0.13 $ 0.30 -57% Diluted $ 0.13 $ 0.29 -56% - -------------------------------------------------------------------------------------------------------- Operating Financial Data Operating non-interest expense (2) $ 77,769 $ 84,088 -8% Operating net income (3) $ 37,573 $ 31,701 19% Basic operating earnings per share (3) $ 0.36 $ 0.31 18% Diluted operating earnings per share (3) $ 0.36 $ 0.30 20%
- -------------------------------------------------------------------------------- (1) Consists of merger related charges of $25,871 and $900 and costs to exit the correspondent mortgage business of $7,364 and $0 for the quarters ended March 31, 1999 and 1998, respectively . (2) Excludes pre-tax special charges of $33,235 and $900 for the quarters ended March 31, 1999 and 1998, respectively. (3) Excludes post-tax special charges of $24,079 and $585 for the quarters ended March 31, 1999 and 1998, respectively. 5 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In Thousands, except number of Three Months Ended March 31, shares and per share data) ------------------------------- 1999 1998 ------------ ------------ Net interest income $ 107,938 $ 106,552 Net income $ 13,494 $ 31,116 Operating net income (1) $ 37,573 $ 31,701 Shares outstanding (end of period) 104,099,804 104,040,612 Weighted average shares outstanding: Basic 103,429,129 102,965,178 Diluted 104,851,511 105,486,888 Earnings per share: Basic $ 0.13 $ 0.30 Diluted $ 0.13 $ 0.29 Operating earnings per share (1): Basic $ 0.36 $ 0.31 Diluted $ 0.36 $ 0.30 Operating cash earnings per share (2): Basic $ 0.39 $ 0.34 Diluted $ 0.39 $ 0.33 Shareholders' equity $ 905,178 $ 872,721 Book value per share $ 8.70 $ 8.39 Tangible book value per share $ 7.53 $ 7.18 - --------------------------------------------------------------------------------------------- Ratios: Net interest margin (net interest income as a % of average earning assets) (3) 3.86% 4.13% Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (3) 3.36% 3.59% Return on average assets 0.45% 1.10% Operating return on average assets (1) 1.25% 1.13% Operating cash return on average assets (2) 1.37% 1.24% Return on average equity 6.19% 14.79% Operating return on average equity (1) 17.23% 15.06% Operating cash return on average equity (2) 21.60% 18.83% Tier 1 leverage capital ratio at end of period 7.07% 7.45% Efficiency ratio (4) 55.17% 61.44% Non-performing loans $ 48,191 $ 69,711 Total non-performing assets $ 60,105 $ 80,139 Non-performing loans as a % of total loans 0.68% 0.96% Non-performing assets as a % of total assets 0.48% 0.68% Full service banking offices 221 230
- -------------------------------------------------------------------------------- (1) Excludes merger related and special charges of $24,079 and $585 after tax for the quarters ended March 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. 6 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED AVERAGE BALANCE SHEETS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, - --------------------------------------------------------------------------------------------------------------- 1999 1998 - --------------------------------------------------------------------------------------------------------------- AVERAGE YIELD/ Average Yield/ (Dollars in Thousands) BALANCE RATE Balance Rate - --------------------------------------------------------------------------------------------------------------- ASSETS Loans and leases (1) Residential real estate mortgages $ 2,556,325 7.36% $ 3,388,356 7.75% Commercial real estate mortgages 1,653,097 9.05% 1,596,801 9.56% Commercial loans and leases 1,139,847 9.17% 1,015,809 9.25% Consumer loans and leases 2,127,014 8.59% 1,972,781 8.98% ----------- ----------- 7,476,283 8.36% 7,973,747 8.61% Securities available for sale 3,583,507 6.05% 2,439,674 6.57% Federal funds sold & other short-term investments 186,465 3.96% 90,671 5.77% ----------- ----------- Total earning assets 11,246,255 7.55% 10,504,092 8.11% Nonearning assets 912,961 918,811 ----------- ----------- Total assets $12,159,216 $11,422,903 =========== =========== LIABILITIES & SHAREHOLDERS' EQUITY Interest-bearing deposits: Regular savings $ 1,283,505 2.04% $ 1,372,469 2.50% Retail money market and NOW accounts 2,036,837 2.39% 1,809,653 2.58% Retail certificates of deposit 3,449,865 5.16% 3,452,992 5.48% Brokered deposits 211,412 5.05% 290,177 5.93% ----------- ----------- Total interest-bearing deposits 6,981,619 3.77% 6,925,291 4.15% Borrowed funds 2,923,476 5.18% 2,334,920 5.60% ----------- ----------- Total interest-bearing liabilities 9,905,095 4.19% 9,260,211 4.52% Demand accounts 1,235,688 1,123,814 Other liabilities 46,166 85,381 Minority interest 88,000 100,000 Shareholders' equity 884,267 853,497 ----------- ----------- Total liabilities, minority interest and shareholders' equity $12,159,216 $11,422,903 =========== =========== Net earning assets $ 1,341,160 $ 1,243,881 =========== =========== Net interest income (fully taxable equivalent) $ 108,402 $ 107,781 Less: fully taxable equivalent adjustments (464) (561) ----------- ----------- Net interest income $ 107,938 $ 107,220 =========== =========== Net interest rate spread (fully taxable equivalent) 3.36% 3.59% Net interest margin (fully taxable equivalent) 3.86% 4.13%
- -------------------------------------------------------------------------------- (1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans. -----END PRIVACY-ENHANCED MESSAGE-----