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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
October 11, 1996
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(Date of earliest event reported)
Fidelity Financial of Ohio, Inc.
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(Exact name of registrant as specified in its charter)
Ohio 0-27868 31-1455721
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) (Identification No.)
4555 Montgomery Road, Cincinnati, Ohio 45212
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(Address of principal executive offices) (Zip Code)
(513) 351-6666
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(Registrant's telephone number, including area code)
Not Applicable
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Former name, former address and former fiscal year, if changed since last
report)
Exhibit Index appears on page 3.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 11, 1996, following receipt of all required regulatory and
stockholder approvals, Fidelity Financial of Ohio, Inc. ("FFOH") completed the
acquisition of Circle Financial Corporation ("CFC") pursuant to an Amended and
Restated Agreement of Merger, dated as of June 13, 1996, among FFOH, Fidelity
Acquisition Corporation ("FAC"), a wholly-owned subsidiary of FFOH, and CFC.
The acquisition was effected by means of the merger of CFC with and into FAC
(the "Merger"). Upon consummation of the Merger, each share of common stock,
$1.00 par value per share, of CFC ("CFC Common Stock") outstanding immediately
prior thereto was converted into the right to receive, at the election of the
holder thereof, $38.00 in cash or 3.85 shares of common stock, $0.10 par value
per share, of FFOH ("FFOH Common Stock") (or under certain circumstances, a
combination of cash and shares of FFOH Common Stock), subject to the condition
that the aggregate amount of cash consideration paid to CFC shareholders did not
exceed nor constitute less than 45% of the total consideration paid for the CFC
Common Stock by FFOH. FFOH's source of funds for the aggregate cash
consideration paid to shareholders of CFC were dividends paid by Fidelity
Federal Savings Bank, a federally chartered savings bank and a wholly owned
subsidiary of FAC (the "Bank"), to FFOH.
In addition, pursuant to the terms of an Amended and Restated Agreement of
Merger, dated as of June 13, 1996, between the Bank and People's Savings
Association, an Ohio-chartered savings association and a wholly owned subsidiary
of CFC (the "Association"), upon consummation of the Merger, the Association
merged with and into the Bank.
On October 15, 1996, FFOH filed a Form 8-K (the "Form 8-K") which discussed
this matter. The purpose of this Amendment to the Form 8-K is to provide
certain unaudited pro forma consolidated condensed combined financial
information of FFOH.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) The consolidated financial statements of CFC were previously filed.
(b) The Unaudited Pro Forma Consolidated Condensed Combined Financial
Statements of FFOH are attached hereto as Exhibit 99(a).
(c) The following exhibit is filed with this report.
<TABLE>
<CAPTION>
Exhibit Number Description
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<C> <S>
99(a) Unaudited Pro Forma Consolidated
Condensed Combined Financial
Statements as of and for the nine
months ended September 30, 1996, and
notes thereto.
</TABLE>
2
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
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<C> <S>
99(a) Unaudited Pro Forma Consolidated
Condensed Combined Financial Statements
of FFOH as of and for the nine months
ended September 30, 1996, and notes
thereto.
</TABLE>
3
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIDELITY FINANCIAL OF OHIO, INC.
Date: December 12, 1996 By: /s/ Paul D. Staubach
-------------------------------------
Paul D. Staubach
Senior Vice President and Chief
Financial Officer
4
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<TABLE>
<CAPTION>
Unaudited Pro Forma Consolidated
Condensed Combined
Statement of Financial Condition
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September 30, 1996
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Acquisition Consolidated
Adjustments Condensed Footnote
FROH CFC Dr. (Cr.) Combined References
-------- -------- ----------- ------------- ----------
(In Thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Assets:
Cash and due from banks $ 2,694 $ 1,172 $ $ 3,866
Interest-bearing deposits 10,862 10,050 (7,653) 13,259 (A)
Investment securities available fo
sale-at market 14,403 983 (14) 15,372 (B)
Investment securities held to
maturity-at cost -- 6,598 (13) 6,585 (B)
Mortgage-backed securities available
for sale-at market 26,738 3,755 (9) 30,484 (B)
Mortgage-backed securities held to
maturity-at cost -- 40,467 196 40,663 (B)
Loans receivable, net 193,796 187,486 (615) 380,667 (C)
Federal Home Loan Bank stock 1,982 1,734 3,716
Goodwill and other intangible assets -- 3,064 (3,064) (D)
8,302 8,302 (D)
Other assets 5,395 6,162 (46) 11,511 (E)
-------- -------- ------- --------
Total assets $255,870 $261,471 $ (2,916) $514,425
======== ======== ======== ========
Liabilities:
Savings deposits $188,280 $207,193 $ (845) $396,318 (F)
Borrowed funds 13,477 27,500 (5,885) 46,862 (A) and (G)
Other liabilities 3,327 2,609 419 5,517 (H)
-------- -------- -------- --------
Total liabilities 205,084 237,302 (6,311) 448,697
-------- -------- --------- --------
Stockholders' Equity:
Common stock, par value 408 776 625 559 (I)
Additional paid-in capital 26,808 6,507 (8,284) 41,599 (J)
Retained income 26,008 18,447 18,447 26,008 (K)
Treasury stock, at cost (1,532) (1,532) -- (K)
Less shares acquired by Employee
Stock Ownership Plan (2,097) -- (2,097)
Less shares acquired by Management
Recognition Plan (7) -- (7)
Unrealized losses on securities
designated as available for
sale-net (334) (29) (29) (334) (K)
-------- --------- --------- --------
Total stockholders' equity 50,786 24,169 9,227 65,728
-------- --------- --------- --------
Total liabilities and
stockholders'
equity $255,870 $261,471 $ 2,916 $514,425
======== ======== ======== ========
Tangible book value per share $ 12.46 $ 29.52 $ 10.27
======== ======== ========
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
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Notes to Pro Forma Condensed Combined Balance Sheet
(Unaudited)
As of October 11, 1996
(A) FFOH utilized $7.7 million of interest-bearing deposits in other
institutions and borrowed $6.0 million from the Federal Home Loan Bank of
Cincinnati ("FHLB") as sources of funds for the cash portion of the Merger
Consideration.
<TABLE>
<S> <C>
Shares of CFC Common Stock outstanding at
September 30, 1996 (715,033 x 45%) 321,765
Cash payment per share $ 38.00
-----------
Cash portion of the Merger Consideration $12,227,070
Cash to be paid to holders of the 40,934
options to purchase CFC Common Stock, net
of tax benefits 518,940
Cash payments on fractional shares 1,132
Acquisition costs 905,567
-----------
Total estimated cash payment by FFOH $13,652,709
-----------
-----------
</TABLE>
The residual amount of Merger Consideration will be in the form of FFOH
Common Stock as shown below:
<TABLE>
<S> <C>
Shares of CFC Common Stock outstanding at
September 30, 1996 (715,033 x 55%) 393,268
Exchange ratio 3.850
-----------
1,514,082
Less fractional shares (115)
-----------
Total shares of FFOH Common Stock to be
issued 1,513,967
-----------
-----------
</TABLE>
(B) The adjustment to investment securities and mortgage-backed securities,
designated as held to maturity and available for sale, reflects the
recording of CFC's respective portfolios to fair value at the date of
acquisition.
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(C) The adjustment to loans receivable, net of unearned interest, reflects the
adjustment of CFC's loan portfolio to fair value by discounting the
portfolio using the estimated remaining lives of the various types of loans
and estimated current interest rates as of September 30, 1996.
(D) This adjustment reflects the allocation to goodwill and other intangible
assets as a result of the fair value adjustments set forth in notes B, C,
E, F and G herein. The calculation of this adjustment is shown below:
<TABLE>
<S> <C>
Total shares of FFOH Common Stock issued
pursuant to the Agreement of Merger 1,513,967
Market price of FFOH Common
Stock used for exchange of Common Stock $9.87
-----------
Market value of shares exchanged $14,942,854
Cash payment by FFOH pursuant to Note A 13,652,709
Less CFC's September 30, 1996 tangible
stockholders' equity (21,105,961)
Mark to market adjustments (1) 812,242
------------
$ 8,301,844
</TABLE>
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(1) Represents the summation of Notes B, C, E, F, G and H.
(E) The adjustment to other assets reflects the recording of CFC's office
premises and equipment to appraised values at the date of acquisition.
(F) The adjustment to savings deposits reflects the fair value of such deposits
by discounting using the estimated remaining lives of the various types of
savings deposits and the current interest rates as of September 30, 1996.
(G) The adjustment to FHLB advances reflects the fair value of such advances by
discounting using the estimated remaining lives of the various advances and
the current interest rates as of September 30, 1996.
(H) The $419,000 adjustment of other liabilities reflects the tax effect of the
fair value adjustments set forth in Notes B, C, E, F and G.
(I) Represents the elimination of CFC's Common Stock and the issuance of
1,513,967 shares of FFOH Common Stock at a par value of $.10 per share
pursuant to the Agreement of Merger.
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(J) Represents the elimination of CFC's additional paid-in capital and the
issuance of 1,513,967 shares of FFOH Common Stock at the exchange rate of
$9.87 per share in accordance with the Agreement of Merger.
(K) Represents the elimination of CFC's historic retained earnings, treasury
stock and unrealized loss on investment securities.
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<TABLE>
<CAPTION>
Unaudited Pro Forma Consolidated
Condensed Combined
Statements of Earnings
--------------------------------------------------
For the Nine Months Ended September 30, 1996
--------------------------------------------------
Pro Forma
Consolidated
Adjustments Condensed Footnote
FFOH CFC Dr. (Cr.) Combined References
--------- ------- ------------ -------------- -------------
(In Thousands, except shares and per share data)
<S> <C> <C> <C> <C> <C>
Interest income:
Loans $11,435 $ 8,922 $(352) $20,709 (A)
Mortgage-backed securities 1,340 2,422 30 3,732 (B)
Investment securities 555 571 (15) 1,141 (C)
Interest-bearing deposits and other 522 382 133 771 (D)
-------- --------- ---------- ------------- --------------
Total interest income 13,852 12,297 (204) 26,353
Interest expense:
Deposits 7,190 7,164 (309) 14,045 (E)
Borrowings 680 234 259 1,173 (F)
-------- --------- --------- --------------
Total interest expense 7,870 7,398 (50) 15,218
======== ========= ========= ==============
Net interest income 5,982 4,899 (254) 11,135
Provision for losses on loans 48 -- -- 48
------- --------- --------- -----------
Net interest income after provision
for losses on loans 5,934 4,899 (254) 11,087
Other income 320 390 -- 710
General, administrative and other
expenses 4,682 5,014 (277) 9,419 (G)
Goodwill amortization -- -- 262 262 (H)
-------- --------- --------- -----------
Earnings before income taxes 1,572 275 (269) 2,116
Federal income taxes 534 97 180 811
-------- --------- --------- -----------
Net earnings $ 1,038 $ 178 $ (89) $ 1,305
======== ========= ========= ===========
Earnings per share(J): (I)
Primary $ 0.26 $ 0.24 $ -- $ 0.24
======== ========= ========= ===========
Fully diluted $ 0.26 $ 0.24 $ -- $ 0.24
======== ========= ========= ===========
Weighted average shares and
share equivalents outstanding:
Primary 3,903,778 731,500 -- 5,417,745
Fully diluted 3,905,197 731,500 -- 5,419,164
</TABLE>
(A) Represents the current amortization of the adjustment to fair value of the
loans receivable of CFC using the interest method over an estimated
remaining life of approximately 3 years.
(B) Represents the current amortization of the adjustment to fair value of the
mortgage-backed securities of CFC on the interest method over an estimated
remaining life of approximately five years.
(C) Represents the current amortization of the adjustment to fair value of the
investment securities of CFC on the interest method over an estimated
remaining life of approximately two years.
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(D) Represents earnings as a result of $19.5 million in net proceeds from
FFOH's stock conversion on March 4, 1996, net of the $7.7 million of cash
used to fund the Merger, at an average rate of 5.6%. The weighted average
rate was derived from the historic yields on assets identified to fund the
cash consideration of the Merger. This pro forma adjustment for the nine
months ended September 30, 1996, was prorated to take into account the
completion of FFOH's stock offering on March 4, 1996.
(E) Represents the period accretion of the fair value adjustment applied to CFC
deposits, on the interest method over an estimated remaining life of
approximately three years.
(F) Represents interest expense as a result of borrowing $6.0 million from the
Federal Home Loan Bank in order to fund the cash consideration of the
Merger, at an average rate of 5.6%. In addition, the adjustment contains
the period accretion of the fair value adjustment applied to CFC's Federal
Home Loan Bank advances, on the interest method over the remaining life of
the advances.
(G) Represents direct cost reductions as a result of the Merger, primarily
attributable to declines in employee compensation and benefits, net of
additional expenses due to FFOH's stock conversion on March 4, 1996 as
follows:
<TABLE>
<S> <C>
Direct cost reductions $750,000
Adjustments due to FFOH's stock conversion
Ohio franchise tax (190,000)
ESOP adjustment (121,000)
1996 Recognition Plan adjustment (182,000)
---------
$257,000
=========
</TABLE>
This pro forma adjustment for the nine months ended September 30, 1996, was
prorated to take into account the completion of FFOH's stock offering on
March 4, 1996.
(H) Represents amortization of additional goodwill and other intangible assets
over an estimate weighted average life of fifteen years.
(I) Represents the income tax effect with respect to the fair value and other
adjustments described in Notes A through H above.
(J) Earnings per share are based upon the combined historical income of FFOH
and CFC divided by the historical weighted average shares during the
periods as presented above. Weighted average shares outstanding has been
adjusted to reflect the exchange ratio with respect to FFOH's
reorganization into the stock holding company form of organization on March
4, 1996 (whereby each share of Fidelity Federal Savings Bank (the "Bank")
common stock held by public shareholders of the Bank were converted into
2.25 shares of FFOH Common Stock). For purposes of calculating pro forma
earnings per share, the weighted average shares gives effect to
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FFOH's historic weighted average shares outstanding plus the FFOH Common
Stock issued as consideration in the Agreement of Merger at the beginning
of the period presented.
