SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
July 7, 1999
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(Date of earliest event reported)
Commonwealth Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-27942 23-2828883
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2 West Lafayette Street, Norristown, Pennsylvania 19401
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(Address of principal executive offices) (Zip Code)
(610) 251-1600
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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)
Item 5. Other Events
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On July 7, 1999, Commonwealth Bancorp, Inc. (the "Company") announced that
its wholly owned subsidiary, Commonwealth Savings Bank, will exit
substantially all of its third party mortgage servicing business, and has
reached a definitive agreement with National City Mortgage Co. regarding the
sale of Commonwealth's existing $1.0 billion Fannie Mae and Freddie Mac
mortgage servicing portfolio. For additional information, reference is made
to the Press Release, dated July 7, 1999, which is attached hereto as
Exhibit 99 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits:
99 Press Release dated July 7, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMONWEALTH BANCORP, INC.
Date: July 8, 1999 By: /s/Charles M. Johnston
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Charles M. Johnston
Chief Financial Officer
Exhibit 99
For release: IMMEDIATELY
Contact: Charles M. Johnston, Chief Financial Officer
Commonwealth Bancorp, Inc.
(610) 313-2189
COMMONWEALTH BANCORP, INC. TO EXIT THIRD PARTY
MORTGAGE SERVICING BUSINESS
Norristown, PA, July 7, 1999 - Commonwealth Bancorp, Inc. (NASDAQ: CMSB)
announced today that its wholly-owned subsidiary, Commonwealth Bank, will exit
substantially all of its third party mortgage servicing business, and has
reached a definitive agreement with National City Mortgage Co. regarding the
sale of Commonwealth's existing $1.0 billion Fannie Mae and Freddie Mac
mortgage servicing portfolio. The Company expects to realize a pre-tax gain
of between $3.5 million and $4.0 million upon completion of the
transaction, which is anticipated to occur in the third quarter of 1999.
Charles H. Meacham, Chairman and Chief Executive Officer, stated, "Our
decision to exit substantially all of the third party mortgage servicing
business reflects our strategy to focus Commonwealth's efforts on those
businesses and markets where we have adequate presence to compete effectively.
This transaction will free-up capital for other investments involving more
attractive creation of value for Commonwealth shareholders."
The Company intends to continue servicing mortgages held for its own account,
as well as mortgages relating to certain private investors, mortgages relating
to certain public housing programs, and current mortgage production awaiting
transfer to the ultimate servicer. The Company's mortgage banking division,
ComNet Mortgages Services, will remain active in the origination and sale of
residential mortgage loans, primarily on a servicing released basis. ComNet
originated $1.1 billion in mortgage loans in 1998 and $0.8 billion annualized
in the first quarter of 1999.
Commonwealth Bancorp, Inc., with consolidated assets of $2.2 billion, is the
holding company for Commonwealth Bank, which has 59 retail banking branches
throughout southeast Pennsylvania. ComNet Mortgage Services, a division of
Commonwealth Bank, has 11 loan production offices in Pennsylvania, Maryland,
New Jersey and Virginia. ComNet also operates under the trade name of
Homestead Mortgage in Maryland.
