KEYCORP TO ACQUIRE PUGET SOUND BANCORP OF TACOMA, WASH.
KEYCORP TO ACQUIRE PUGET SOUND BANCORP OF TACOMA, WASH. ALBANY, N.Y., March 9 /PRNewswire/ -- Victor J. Riley, Jr.,
chairman, president and chief executive officer of KeyCorp (NYSE: KEY), and W.W. Philip, chairman and chief executive officer of Puget Sound Bancorp (NASDAQ: PSNB), announced today the signing of a definitive agreement for KeyCorp to acquire Puget Sound Bancorp. Consummation of the transaction is subject to approval by the shareholders of both Puget Sound Bancorp and KeyCorp as well as the appropriate regulatory authorities. Closing of the acquisition is anticipated in the last half of 1992.
Under the terms of the agreement, Puget Sound Bancorp shareholders will receive .88 shares of KeyCorp common stock for each share of Puget Sound Bancorp common stock. This will result in the issuance of approximately 17.6 million shares of KeyCorp common stock, giving the transaction an indicated total value of $807.2 million based on the Friday, March 6, 1992 KeyCorp common stock closing price of $45.875 per share. The agreement provides that if the average closing price of KeyCorp common stock is less than $43 per share during a specific pricing period prior to the closing of the transaction, and if the decline exceeds the decline of an index of regional bank holding companies' share values by 12.5 percentage points, Puget Sound Bancorp can terminate the merger agreement unless KeyCorp increases the exchange ratio. Puget Sound Bancorp has issued an option to KeyCorp to acquire 19.9 percent of Puget Sound Bancorp's common stock. The option would only be exercisable by KeyCorp if certain conditions relating to acquisition of Puget Sound Bancorp by an entity other than KeyCorp are met. The Puget Sound Bancorp common stock is traded over-the-counter under the symbol PSNB. KeyCorp common stock is listed on the New York Stock Exchange with the symbol KEY. Puget Sound Bancorp is a bank holding company headquartered in Tacoma, Wash. The company is the parent to three commercial banks and a savings bank: -- Puget Sound National Bank, Tacoma, with $3.1 billion of assets and 92 offices. These offices are dual branches with Puget Sound Savings Bank, Seattle, which has an additional $1.4 billion of assets. All branches operate under the name Puget Sound Bank; however, the two banks retain their separate charters and corporate identities. -- Bellingham National Bank in Bellingham, Wash., with 17 offices and $406 million of assets. -- San Juan County Bank, Friday Harbor, Wash., with three offices and $109 million of assets. Puget Sound Bancorp also has pending mergers with three financial institutions in Washington with an aggregate total of 18 offices and $266 million of assets. Riley and Philip further announced that Key Bank of Washington, Seattle, which has forty-two offices and $1.5 billion of assets, will be merged with Puget Sound National Bank as will all other commercial bank subsidiaries of Puget Sound Bancorp. The name of the combined bank will be Key Bank of Washington and it will be headquartered in Tacoma. Puget Sound Savings Bank will retain its savings bank charter, under the name of Key Savings Bank of Washington. Combined, Key Bank of Washington and the savings bank will have assets in excess of $6.4 billion and will have approximately 130 branch office locations, prior to consummation of Puget Sound Bancorp's pending acquisitions. Where there are currently duplicative offices, a thorough analysis of market conditions and office locations will be conducted to determine those locations offering the most customer convenience. It is currently expected that a one-time restructuring charge will be incurred by both KeyCorp and Puget Sound Bancorp in connection with the merger. The total of the non-recurring charges is projected to be $70 million. The charges will represent estimated costs of consolidating the operations of the two franchises, including synchronization of accounting and conformance of loan classifications and loss reserve practices. Efficiencies are projected to be realized starting soon after the merger date, with targets of $28 million (equal to 12.2 percent of the combined total of Key Bank of Washington and Puget Sound Bancorp's 1991 overhead expenses) for dollar savings in 1993, and an additional $9 million (for a total of $37 million (16.3 percent) in 1994. The transaction is anticipated to be only $.02 dilutive to 1993 KeyCorp earnings per common share and accretive in 1994, with elimination of dilution expected from synergy benefit realization. KeyCorp management, however, anticipates further that leveraging of equity issued in the transaction could speed the elimination of dilution. Commenting on the proposed acquisition, Riley said, "Joining forces with Bill Philip and his high performance banking organization is one of the most exciting and satisfying events in my career. Bill has been described as a 'nuts and bolts kind of guy, running a meat and potatoes community bank.' I can't envision another bank to better complement the KeyCorp 'sticking-to-the-basics' banking philosophy." Philip also commented on the proposed acquisition, "We did not approach this possibility of a banking marriage in a haphazard manner. Our history of fiscal soundness and tradition of service has been the foundation of our financial performance and reward to shareholders. We are certainly pleased to be combining our organization with KeyCorp which so closely parallels the history and tradition of Puget Sound Bancorp." Puget Sound Bancorp (NASDAQ: PSNB) is Washington state's largest independent commercial bank holding company serving the people, businesses and communities of Puget Sound for over 100 years. Composed of four banks and seven non-banking subsidiaries, Puget Sound Bancorp has total assets of $4.9 billion. The corporation is financially sound with a 1991 return on average assets of 1.05 percent and a return on equity of 14.6 percent. The company has built a strong personal and corporate identity with communities in the Puget Sound area. KeyCorp (NYSE: KEY) with assets of more than $23 billion is a multi-regional bank holding company headquartered in Albany, N.Y. It has focused its banking expansion activities in the Northeast and Northwest. As "America's neighborhood bank," KeyCorp pursues a middle-market target concentrating its resources in cities and smaller communities of the northern tier of states, thus avoiding overcrowded marketplaces and single industry loan exposure. KEYCORP/PUGET SOUND BANCORP Transaction at a Glance Announced: March 9, 1992 Expected Merger Date: Third or Fourth Quarter 1992 Deal Value: $807.2 million Price to 12/31/91 Book: 2.00X Price Per Share: $40.37 Price to 12/31/91 Tangible Book: 2.11X Price to 1991 Earnings: 14.68X All of the above statistics are based on KeyCorp's March 6, 1992 closing common stock price of $45.875 per share. The agreement has a feature which allows Puget Sound Bancorp to request renegotiation of the exchange ratio if KeyCorp common stock price has declined both: (a) to an average of less than $43.00 per share during the pricing period and, (b) from March 6, 1992 closing price to the end of the pricing period by 12.5 percentage points more than the change in the same time period of an index of super-regional banks. KeyCorp Puget Sound Bancorp At Year End 1991 1990 1991 1990 Assets (in billions) $ 23.2 $ 19.3 $ 4.9 $ 4.6 Deposits (in billions) $ 19.1 $ 16.0 $ 3.8 $ 3.6 Equity/Assets (percent) 6.42 5.63 8.01 6.75 NPAs/Loans & ORE (percent) 2.42 2.00 2.05 2.70 For the Year Net Income (in millions) $188.1 $148.4 $49.1 $46.2 ROA (percent) .86 .89 1.05 1.05 ROE (percent) 14.28 14.35 14.59 15.53 Efficiency Ratio (percent) 64.61 66.52 62.17 62.57 -0- 3/9/92 /CONTACT: Don Kauth, Investor Relations, 518-487-4491, or evenings, 518-583-1608, or Susan Peterson, Media Relations, 518-486-8258, or evenings, 518-587-3008, both of KeyCorp; or Rob Gill of Key Bank of Washington, 206-684-6067, or evenings, 206-286-9950, or Katie Weiss of Puget Sound Bancorp, 206-593-3774, or evenings, 206-525-1039/ (KEY PSNB) CO: KeyCorp; Puget Sound Bancorp ST: New York, Washington IN: FIN SU: TNM
KK -- CL001 -- 6176 03/09/92 07:34 EST
|Printer friendly Cite/link Email Feedback|
|Date:||Mar 9, 1992|
|Previous Article:||BURNHAM PACIFIC PROPERTIES $100-MILLION PUBLIC OFFERING OVER-SUBSCRIBED|
|Next Article:||FIRST VIRGINIA BANKS MEMBERS ACQUIRE COREAST DEPOSITS FROM RESOLUTION TRUST|