Current Report — Form 8-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 8-K Form 8-K for Citizens Bancshares, Inc. 4 12K
2: EX-99.1 Text of Press Release, Dated May 21, 1998 4 15K
3: EX-99.2 Synopsis of Merger, Dated 5/21/98 10 19K
EX-99.2 — Synopsis of Merger, Dated 5/21/98
EX-99.2 | 1st Page of 10 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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[Citizens Bancshares, Inc. & Mid Am, Inc.. Synopsis of Merger. May 21, 1998]
This current report on Form 8-K, including the investor materials,
contains forward-looking statements that involve risk and uncertainty. It should
be noted that a variety of factors could cause the combined company's actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the combined company's forward-looking
statements.
The risks and uncertainties that may affect the operations,
performance, development, growth projections and results of the combined
company's business include, but are not limited to, the growth of the economy,
interest rate movements, timely development by the combined company of
technology enhancements for its products and operating systems, the impact of
competitive products, services and pricing, customer business requirements,
Congressional legislation, acquisition cost savings and revenue enhancements and
similar matters. Readers of this report are cautioned not to place undue
reliance on forward-looking statements which are subject to influence by the
named risk factors and unanticipated future events. Actual results, accordingly,
may differ materially from management expectations.
-1-
[Transaction Description - Term Sheet]
Structure: Merger of Equals. Tax Free exchange of common stock
accounted for as a "pooling of interests." Cross options
granted to each company for 19.9% of the other partner.
Exchange Ratio: Fixed exchange; ratio of 0.385* Citizens shares for each
share of Mid Am; Citizens shares remain outstanding
Pro forma diluted
shares outstanding: 18.1 million
Pro forma holding
company: Combined assets: $4.00 billion. Combined market
capitalization: $1.3 billion
Expected Closing: Fourth quarter 1998, subject to regulatory and shareholder
approval
* On May 12, 1998, Citizens announced a two-for-one stock split effective June
1, 1998. The fixed exchange ratio will then be adjusted to 0.77.
-2-
[Transaction Description - Term Sheet]
Management:
Chairman & CEO - David R. Francisco (current Mid Am President & CEO)
President & COO - Marty E. Adams (current Citizens President & CEO)
Senior Chairman - Edward J. Reiter (current Mid Am Chairman & CEO)
Vice Chairman - James C. Mc Bane (current Citizens Chairman)
Board of Directors: Equal representation - Eleven directors from Mid Am
& eleven directors from Citizens.
Headquarters: Bowling Green, OH
Dividend: Current Mid Am indicated rate
-3-
[Merger Benefits]
Merger creates a $4 billion asset size Ohio-based commercial banking franchise
with approximately $1.3 billion in market capitalization.
Combined cost savings of approximately 8-10% or $16-20 million will result in
projected 1999 EPS of approximately $4.00 vs. Citizens' projected 1999 EPS of
$3.50.
Accretive to both shareholder groups earning per share.
Pro forma institution creates significant opportunities in the merger market
arena.
Accelerates realization of non-bank revenue diversification strategy due to
larger customer base.
Potential for significant revenue enhancements based on cross-selling
opportunities.
-4-
[Merger Benefits]
Combined geographic coverage provides broader regional reach and geographic
diversity.
Enhanced benefits to customers and communities in which institutions operate.
Combined management team provides enhanced intellectual capital positioning
company for continued superior profitability.
Organizations share similar "super-community" operational philosophies that can
facilitate integration and enhance business momentum.
-5-
[Citizens Bancshares, Inc.}
[Map]
[Market Share Rank (Total County Deposits >$900mm)]
1. Jefferson, OH - #1
2. Columbiana, OH - #1
3. Beaver, PA - #3
4. Belmont, OH - #7
5. Stark, OH - #7
6. Mahoning, OH - #8
7. Butler, PA - #16
[Branch Details]
Number of Offices - 62
Avg. Deposits per Office - $23,366
[Balance Sheet Items (As of 3/31/98)]
Total Assets - $1,785,682
Total Deposits- $1,401,967
Total Equity - $157,578
[Income Statement Items (as of 3/31/98)]
ROAA (LQA) - 1.54%
ROAE (LQA) - 17.45%
Efficiency Ratio (Mar. Qtr.) - 49.90%
Diluted EPS (LQA) - $1.56
[Market Information]
Stock Price (Close 5/20/98) - $72.75
Market Capitalization - $643,895,000
Price/Tangible Book Value - 432.50%
Price/LQA EPS - 23.55x
-6-
[Mid Am, Inc.}
[Map]
[Market Share Rank (Total County Deposits >$900mm)]
1. Wood, OH - #1
2. Greene, OH - #5
3. Lenawee, MI - #6
4. Allen, OH - #6
5. Lucas, OH - #8
6. Warren, OH - #20
7. Montgomery, OH - #17
[Branch Details]
Number of Offices - 84
Avg. Deposits per Office - $23,441
[Balance Sheet Items (As of 3/31/98)]
Total Assets - $2,239,113
Total Deposits- $1,781,482
Total Equity - $163,231
[Income Statement Items (as of 3/31/98)]
ROAA (LQA) - 1.34%
ROAE (LQA) - 17.62%
Efficiency Ratio (Mar. Qtr.) - 70.28%
Diluted EPS (LQA) - $1.24
[Market Information]
Stock Price (Close 5/20/98) - $27.00
Market Capitalization - $630,718,000
Price/Tangible Book Value - 407.85%
Price/LQA EPS - 21.59x
-7-
[Citizens Bancshares, Inc. & Mid Am, Inc. Pro Forma Branch Locations]
[Map]
-8-
[Enlarge/Download Table]
CONTRIBUTION ANALYSIS
Citizens' Financials Include Century Acquisition (Pooling Accounting)
CITIZENS* MID AM
Quarter Ended QUARTER ENDED PRO FORMA
ASSETS 31-Mar-98 31-MAR-98 31-MAR-98
---------------------------------- ---------------------- ---------------------- ------------------
SECURITIES 534,198 460,738 994,936
LOANS, NET 1,128,046 1,591,468 2,719,514
INTANGIBLES 8,701 8,586 17,287
OTHER ASSETS 114,737 178,321 293,058
---------------------------------- ---------------------- ---------------------- ------------------
TOTAL ASSETS $1,785,682 2,239,113 4,024,795
================================== ====================== ====================== ==================
LIABILITIES
DEPOSITS 1,401,967 1,781,482 3,183,449
BORROWINGS 210,821 269,400 480,221
OTHER LIABILITIES 15,316 25,000 40,316
---------------------------------- ---------------------- ---------------------- ------------------
TOTAL LIABILITIES $1,628,104 2,075,882 3,703,986
================================== ====================== ====================== ==================
TOTAL SHAREHOLDERS' EQUITY $157,578 $163,231 $320,809
---------------------------------- ---------------------- ---------------------- ------------------
TOTAL LIABILITIES & EQUITY $1,785,682 $2,239,113 $4,024,795
NET INCOME (MAR. QTR. ANNUALIZED) 27,520 29,772 57,292
================================== ====================== ====================== ==================
NET INCOME (LAST TWELVE MONTHS) 24,238 28,757 52,995
================================== ====================== ====================== ==================
_____________________________________
* Earnings Exclude One-Time Deal Related Expenses
-9-
[The ProForma Company]
Twelve months ended March 31, 1998, including $16.8 million of pre-tax synergies
Return on Average Assets 1.62%
Return on Average Equity 20.33%
Loan Loss Reserves to Loans 1.34%
Loan Loss Reserves to NPL's 346.54%
Net Charge-off Ratio 0.16%
Leverage Ratio 7.19%
Dates Referenced Herein and Documents Incorporated by Reference
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