Sovereign Completes Acquisition of Bankers Corp.WYOMISSING, Pa.--(BUSINESS WIRE)--Aug. 29, 1997--Sovereign Bancorp Inc. ("Sovereign") (NASDAQ/NMS:SVRN), parent company of Sovereign Bank, Friday announced the completion of its acquisition of Bankers Corp. ("Bankers"), a $2.6 billion bank holding company headquartered in Perth Amboy Perth Amboy (ăm`boi), city (1990 pop. 41,962), Middlesex co., NE N.J., with a harbor on Arthur Kill at the mouth of the Raritan River, which is crossed there to Staten Island, N.Y., by the Outerbridge Crossing (1928); settled 1683, inc. , N.J. Bankers operates 15 branch offices in Middlesex, Monmouth, and Ocean Counties, N.J. As of June 30, 1997, Bankers had total assets, loans, deposits, and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $2.6 billion, $1.5 billion, $1.7 billion, and $204 million, respectively. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the merger agreement, Bankers common stock shareholders will receive 1.854 shares of Sovereign common stock in exchange for each share of Bankers common stock. As a result of the merger, Sovereign will issue approximately 23.0 million new shares of common stock. To exchange Bankers common stock certificates, an instruction form known as a "Letter of Transmittal Letter of Transmittal A document used by security holder to accompany certificates surrendered in an exchange or other corporate action. " must be completed and returned to the exchange agent, Chase Mellon Shareholder Services along with the Bankers common stock certificates. All Bankers shareholders will receive a letter from Sovereign during the week of Sept. 8, 1997 explaining what steps must be taken, including all necessary documentation, to complete the exchange. The transaction will be tax-free to Sovereign and to Bankers shareholders. The merger will be treated as a pooling-of-interests for financial accounting purposes; as such, in future filings all prior periods of Sovereign will be restated to reflect the balances and activity of Bankers. "We are very pleased to have added the Bankers transaction to part of Sovereign's growing franchise in New Jersey," stated Jay S. Sidhu, Sovereign's president and chief executive officer. "Bankers provides Sovereign with a unique fill-in opportunity in three of the fastest growing counties in the state of New Jersey. "We now hold the #1 deposit market share in Monmouth County, #2 share in Ocean County, and #3 share in Middlesex County For the traditional county of England, see Middlesex. For other uses, see Middlesex (disambiguation). Middlesex County is the name of six counties in North America:
In connection with the transaction, Sovereign anticipates recording a one-time merger-related after tax charge of approximately $20-25 million. This charge will be reflected in Sovereign's third quarter earnings. These one-time expenses will be incurred principally as a result of an addition to the allowance for possible loan losses which Sovereign has determined will be necessary in connection with a more conservative approach than Bankers with respect to the work-out of certain assets, executive and employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments, and other transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). directly related to the merger. Additionally, for interest rate risk purposes, during the third quarter of 1997 Sovereign anticipates selling up to $750 million of mortgage-backed and investment securities to maintain Sovereign's pre-acquisition interest rate risk profile. This may produce a one-time after-tax loss of up to $10.0 million which will also be reflected in Sovereign's third quarter earnings. "With the Bankers acquisition, Sovereign now has over 100 branches and $5.7 billion of deposits in the state of New Jersey," commented Richard E. Mohn, Sovereign's chairman. "We are confident our core customer base will continue to grow as the communities we entered through the Bankers acquisition become familiar with Sovereign's high level of customer service." Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma for the Bankers acquisition, at June 30, 1997 Sovereign had total assets, loans, deposits, and stockholders' equity of $13.5 billion, $8.4 billion, $7.5 billion, and $738 million, respectively. On July 2, 1997, Sovereign announced the signing of a definitive agreement to acquire the Automobile Finance Division ("the Division") of Fleet Financial Group Inc. The Division consists of approximately $2.0 billion of indirect auto loans, dealer floor plan loans, and loans to automobile leasing companies. The Division has business relationships with over 2,000 automotive dealerships and serves approximately 225,000 customers through New Jersey, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and several New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. states. Sovereign expects the transaction to close during the third quarter of 1997, and it is anticipated to be immediately accretive to Sovereign's earnings per share by about 2 cents in 1997 and about 8 cents in 1998. Sovereign is a pro forma $15.5 billion bank holding company with 150 community banking offices serving eastern Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , northern Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). and New Jersey. The fourth largest bank headquartered in Pennsylvania, Sovereign's closing price of its common stock on Friday, Aug. 29, 1997 was $15.50 per share and its preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. closed at $94.25 per share. CONTACT: Sovereign Bancorp Karl D. Gerhart, 610/320-8437 Mark R. McCollom, 610/208-6426 |
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