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FIRST FIDELITY BANCORPORATION OF NEW JERSEY TO ACQUIRE NORTHEAST BANCORP, INC. OF CONNECTICUT FOR $29 MILLION

 LAWRENCEVILLE, N.J. and STAMFORD, CONN., Dec. 28 /PRNewswire/ -- First Fidelity Bancorporation (NYSE: FFB), of Lawrenceville, N.J., and Northeast Bancorp, Inc. (NASDAQ: NBIC) of Stamford, Conn., today announced that a definitive agreement has been executed for First Fidelity to acquire Northeast for approximately $29 million in an exchange of common stock.
 Under the agreement, the holders of Northeast common stock will receive a $4.00-a-share value in an exchange of shares of First Fidelity common stock for each share of Northeast common. The existing Northeast lawsuit against the Bank of New York will be transferred to a litigation trust for the benefit of current Northeast shareholders prior to closing and will be funded with $2 million.
 A condition of the acquisition is Northeast's prior sale of approximately $110 million in non-performing commercial real estate and commercial assets to First Boston Corporation and approximately $30 million of residential real estate non-performing assets.
 First Fidelity said it expects to acquire no more than $100 million in non-performing assets in the transaction and its reserve coverage of non-performing loans is expected to remain well in excess of 100 percent following the acquisition.
 Northeast is currently subject to regulatory constraints and requirements of the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC) and the Connecticut Banking Commissioner, and reported that it expects to become subject in January to a cease and desist order issued by the FDIC Corporation (FDIC) and the Connecticut Banking Commissioner.
 Northeast's principal subsidiary, Union Trust Company, is retaining First Fidelity Bank, N. A., New Jersey, First Fidelity's largest banking affiliate, as a consultant on credit process, credit quality and asset recovery matters.
 Tony Terracciano, First Fidelity chairman and chief executive officer, said: "Our strategic emphasis over the past two and a half years has been on achieving the strongest possible balance sheet and increasingly higher levels of operating efficiency. In addition to substantially improving our financial and operational performance, this strategic emphasis has greatly enhanced our ability to pursue attractive growth opportunities.
 "The opportunity to acquire Northeast Bancorp and Union Trust Company is particularly attractive," Terracciano continued. "Union Trust is a leading consumer bank in Fairfield County with 41 branches there and 27 offices in four other Connecticut counties.
 Additionally, Union Trust has a strong middle-market commercial franchise and a highly regarded and growing trust business.
 "Our careful review of all the factors, including Northeast's loan portfolio, capital position, customer base and service region, has led us to the conclusion that this acquisition represents a unique opportunity to build the value of the First Fidelity franchise."
 Frank J. Kugler, Jr., chairman and chief executive officer of Northeast, said: "Our board has decided that this transaction is in the best interests of our shareholders, customers, employees and communities. The transaction eliminates the substantial risk of regulatory action that could significantly reduce or wipe out all shareholder value and is designed to enhance the long-term value of the investment of our shareholders. First Fidelity is recognized by the public, the regulatory community and the investment community as a highly-profitable banking organization with a strong balance sheet and a high level of operating efficiency. Northeast's shareholders will also benefit from a litigation trust. In addition, upon closing, First Fidelity will infuse at least $135 million of capital into Union Trust.
 "The long recession and its particularly adverse impact on real estate values in New England had made it increasingly apparent that if Union Trust were to continue to grow, it needed a strong partner. In First Fidelity, we have such a partner, one that is committed to investing capital and helping us continue our competitive banking tradition in our marketplace," Kugler said.
 Kugler also noted, "Management's negotiations with others regarding a possible acquisition transaction involving Northeast were unsuccessful. While Shawmut National Corporation recently expressed an interest in acquiring the company and engaged in discussions with us to that end, Shawmut determined to terminate such discussions. In light of the lengthy and substantial solicitation efforts which we have made to date, our board determined that it is unlikely that any further solicitation efforts would produce a more favorable acquisition proposal than that which has been submitted by First Fidelity."
 Terracciano explained that the proposed acquisition meets all of First Fidelity's announced criteria for such transactions. Union Trust's Connecticut markets are contiguous to First Fidelity's operations in Westchester County, New York, and close to New Jersey, where First Fidelity is the leading bank.
 The transaction, which will be accounted for as a purchase, is expected to be non-dilutive in terms of First Fidelity's earnings per share by the end of 1993 and to be 4.5 percent accretive to earnings per share in 1994, Terracciano said. The transaction will be accretive to First Fidelity's book value per share upon closing.
 Following the acquisition, First Fidelity's Tier 1 Leverage ratio is expected to be 6.52 percent and by year-end, 1993, 7.29 percent on a pro forma basis. First Fidelity projects pro forma year-end 1993 Tier 1 Risk-Adjusted and Total Risk-Adjusted capital ratios of 11.22 percent and 14.28 percent respectively.
 The exact number of First Fidelity common shares that will be exchanged for each share of Northeast voting common will be set during a pricing period prior to closing and will reflect First Fidelity's average market price during that period, within a range of $38.925 per share to $47.575 per share, based on First Fidelity's Dec. 24, 1992 closing price of $43.25 per share. If the average First Fidelity common trading price during the pricing period is outside this range, the closest of the highest or lowest per share price within the range, $47.575 or $38.925, will be used to fix the exchange rate.
 The transaction will be funded by First Fidelity through the exercise of previously-issued warrants and options by Banco Santander and from cash reserves.
 The transaction has been approved by the boards of directors of both First Fidelity and Northeast Bancorp, Inc., and must be approved by two-thirds of the holders of Northeast's voting common stock as well as the regulatory authorities. At September 30, there were 6,260,520 shares of Northeast voting common stock outstanding. Goldman, Sachs & Co., Northeast's financial adviser, has provided the board of directors of Northeast an opinion that the consideration to be received by the Northeast stockholders in the transaction is fair to such stockholders. If Bank of New York as sole holder of Northeast's non-voting common stock, 1,000,000 shares, also votes to approve the transaction, its stock will be acquired in the transaction on the same terms. First Boston Corporation is acting as financial adviser to First Fidelity. A proxy statement setting out the details of the proposed transaction will be circulated to Northeast's stockholders in early 1993. It is anticipated that the transaction will close in the second quarter of 1993.
 Northeast has granted First Fidelity an option to purchase 1,803,799 newly-issued shares of Northeast voting common at $5.00 per share, exercisable under certain circumstances, and has agreed to pay First Fidelity a customary termination fee and to reimburse certain of First Fidelity's expenses if the acquisition is not completed under certain circumstances.
 First Fidelity and Northeast also have agreed that First Fidelity may terminate the agreement if, among other things, there is a material adverse change in Northeast's condition between now and closing.
 Northeast Bancorp, Inc., has $2.8 billion in assets and Union Trust Company is Connecticut's third largest commercial bank with $2.5 billion in deposits.
 First Fidelity, with more than $30 billion in assets and $25 billion in deposits, is the largest banking organization headquartered in New Jersey and among the 25 largest in the United States. It operates more than 550 branches in New Jersey, New York and Pennsylvania through its principal affiliates, the First Fidelity banks in New Jersey and New York, Fidelity Bank of Philadelphia, Merchants Bank, of Allentown, Pennsylvania, and Merchants Bank (North) of Wilkes-Barre, Pennsylvania.
 /delval/
 -0- 12/28/92
 /CONTACT: Paul J. Levine of First Fidelity, 201/565-2949; Laura A. Schaible 201-565-3397 or John C. Kline, 203-929-5552 ext. 4270/ (FFB NBIC)


CO: First Fidelity Bancorporation; Northeast Bacnorp, Inc. ST: New Jersey; Connecticut IN: FIN SU: TNM

JS-HN -- PH002 -- 9982 12/28/92 09:24 EST
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