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
Date of Report (Date of earliest event reported): AUGUST 22, 1996
GRAND PREMIER FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-20987 36-4077455
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
486 WEST LIBERTY STREET 60084-2489
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (847) 487-1818
Exhibit Index is located on page 28
<PAGE> 2
Item 2. Acquisition or disposition of Assets
On August 22, 1996, Grand Premier Financial, Inc. (the "Company"), a
Delaware corporation and a registered bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHCA"), acquired all of the
outstanding capital stock of Grand National Bank, a national banking
association, First Bank North, an Illinois state bank, First Bank South, an
Illinois state bank, First National Bank of Northbrook, a national banking
association, First Security Bank of Cary Grove, an Illinois state bank, Premier
Trust Services, Inc., an Illinois trust company and a subsidiary of First Bank
North, Premier Insurance Services, Inc., an Illinois corporation, Premier
Operating Services, Inc., an Illinois corporation and American Suburban
Mortgage Corporation, a currently inactive Illinois corporation. Grand
National Bank and American Suburban Mortgage Corporation were formerly wholly-
owned subsidiaries of Northern Illinois Financial Corporation, an Illinois
corporation and a registered bank holding company under the BHCA ("Northern
Illinois"). First Bank North, First Bank South, First National Bank of
Northbrook, First Security Bank of Cary Grove, Premier Trust Services, Inc.,
Premier Insurance Services, Inc. and Premier Operating Services, Inc.
(collectively, the "Premier Subsidiaries") were formerly direct or indirect
subsidiaries of Premier Financial Services, Inc., a Delaware corporation and a
registered bank holding company under the BHCA ("Premier").
The acquisitions took place pursuant to the consummation of the merger
(the "Merger") of Northern Illinois and Premier with and into the Company under
the terms and conditions of an Agreement and Plan of Merger, dated January 22,
1996, as amended by the First Amendment to the Agreement and Plan of Merger,
dated March 18, 1996, and the Second Amendment to the Agreement and Plan of
Merger, dated August 15, 1996, among the Company, Premier and Northern Illinois
(as amended, the "Merger Agreement"). The Company is a newly formed
corporation, incorporated on January 12, 1996 by Premier and Northern Illinois
for the purpose of effecting the Merger. Under the terms of the Merger
Agreement, (i) each outstanding share of Northern Illinois common stock, no par
value (the "Northern Illinois Common Stock, was converted into the right to
receive 4.250 shares of Company common stock, $0.01 per share (the "Company
Common Stock"), (ii) each outstanding share of Premier common stock, $5.00 par
value ("Premier Common Stock"), was converted into the right to receive 1.116
shares of Company Common Stock, (iii) each outstanding share of Series B
Perpetual Preferred Stock of Premier (the "Premier Series B Preferred Stock"),
par value $1.00 per share and with a stated value of $1,000 per share and a
right of conversion into shares of Premier Common Stock, was converted into the
right to receive one share of convertible preferred stock of the Company, par
value $0.01 per share and with a stated value of $1,000 per share, with terms
substantially identical to the terms of the Premier Series B Preferred Stock,
(iv) each outstanding share of Series D Perpetual Preferred Stock of Premier,
par value $1.00 per share and with a stated value of $1,000 per share (the
"Premier Series D Preferred Stock") was converted into the right to receive one
share of perpetual preferred stock of the Company, par value $0.01 per share
and with a stated value of $1,000 per share, with terms substantially identical
to the terms of the Premier Series D Preferred Stock, and (v) each outstanding
option to purchase shares of Premier Common Stock was converted into an option
to purchase that number of shares of Company Common Stock equal to the product
of the number of shares of Premier Common Stock subject to the original option
multiplied by the exchange ratio used to convert Premier Common Stock into
Company Common Stock pursuant to the terms of the Merger Agreement. The number
of shares of Company Common Stock to be issued in exchange for Northern
Illinois Common Stock and Premier Common Stock in the Merger were determined on
the basis of negotiations between Northern Illinois and Premier.
<PAGE> 3
Prior to the Merger, Howard A. McKee, either directly or indirectly
through corporations which he controls, was the beneficial owner of 51.88% of
the Northern Illinois Common Stock. Prior to the Merger, there was no material
relationship between, on the one hand, Howard A. McKee, and, on the other hand,
the Company, Premier or any of its affiliates, any officer or director of
Premier or any of its affiliates, or any associate of any such person. Upon
consummation of the Merger, Mr. McKee became a director of the Company. No
person, entity or group held a controlling interest in Premier prior to the
Merger.
Grand National Bank has offices in Crete, Homewood, Tinley Park, South
Chicago Heights, Mokena, Niles, Crystal Lake, Wauconda, Island Lake, Woodstock,
Mundelein, Waukegan and Gurnee, Illinois. The Premier Subsidiaries have
offices in Freeport, Stockton, Warren, Mt. Carroll, DeKalb, Dixon, Rockford,
Polo, Sterling, Northbrook, Riverwoods and Cary, Illinois. The Company intends
to continue to conduct, through Grand National Bank and the Premier
Subsidiaries, the same businesses previously conducted by such entities and to
use for such purposes any equipment and physical property acquired through the
Merger.
Additional information responsive to this item has been previously
reported in the Company's Registration Statement on Form S-4, as amended, File
No. 333-03327.
Item 5. Other Events
At the Company's board meeting held on August 29 and 30, 1996, the
Board of Directors appointed KPMG Peat Marwick LLP as the Company's auditors
for the remainder of its 1996 fiscal year.
Item 7. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
The following financial statements have been previously reported in
the Company's Registration Statement on Form S-4, as amended, File
No. 333-03327:
(i) Northern Illinois:
(A) Audited Consolidated Balance Sheets as of December 31, 1995
and 1994;
(B) Audited Consolidated Statements of Income for the years
ended December 31, 1995, 1994 and 1993;
(C) Audited Consolidated Statements of Cash Flows for the years
ended December 31, 1995, 1994 and 1993; and
(D) Audited Consolidated Statements of Changes in Shareholders'
Equity for the years ended December 31, 1995, 1994 and
1993.
(ii) Premier:
(A) Audited Consolidated Balance Sheets as of December 31, 1995
and 1994;
(B) Audited Consolidated Statement of Earnings for the years
ended December 31, 1995, 1994 and 1993;
(C) Audited Consolidated Statements of Cash Flows for the years
ended December 31, 1995, 1994 and 1993; and
(D) Audited Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 31, 1995, 1994 and
1993.
<PAGE> 4
The following financial statements are filed as part of this report:
(i) Northern Illinois:
(A) Consolidated Balance Sheets as of June 30, 1996
(unaudited) and December 31, 1995 (audited);
(B) Consolidated Statements of Income for the six months and
three months ended June 30, 1996 and 1995 (unaudited);
(C) Consolidated Statements of Shareholder Equity for the six
months ended June 30, 1996 and 1995 (unaudited);
(D) Consolidated Statements of Cash Flows for the six months
ended June 30, 1996 and 1995 (unaudited); and
(E) Notes to Consolidated Financial Statements for the six
months and three months ended June 30, 1996 and 1995.
(ii) Premier:
(A) Consolidated Balance Sheets as of June 30, 1996
(unaudited) and December 31, 1995 (audited);
(B) Consolidated Statements of Earnings for the three months
and six months ended June 30, 1996 and 1995 (unaudited);
(C) Consolidated Statements of Cash Flows for the six months
ended June 30, 1996 and 1995 (unaudited); and
(D) Notes to Consolidated Financial Statements for the three
months and six months ended June 30, 1996 and 1995.
(b) PRO FORMA FINANCIAL STATEMENTS.
The following pro forma financial statements have been previously reported
in the Company's Registration Statement on Form S-4, as amended, File No.
333-03327:
Pro Forma Condensed Statements of Income for the years ended December
31, 1995, 1994 and 1993 (unaudited).
The following pro forma financial statements are filed as part of this
report:
(i) Pro Forma Combined Condensed Balance Sheet as of June 30,1996
(unaudited); and
(ii) Pro Forma Condensed Statements of Income for the three months and six
months ended June 30, 1996 and 1995.
(c) EXHIBITS
The following exhibits are filed or incorporated by reference in this
report:
Exhibit 2.1 Agreement and Plan of Merger, dated January 22, 1996,
among Northern Illinois Financial Corporation, Premier
Financial Services, Inc. and Grand Premier Financial,
Inc. (incorporated by reference to the Company's
Registration Statement on Form S-4, as amended, File
No. 333-03327).
Exhibit 2.2 First Amendment to Agreement and Plan of Merger, dated
March 18, 1996, among Northern Illinois Financial
<PAGE> 5
Corporation, Premier Financial Services, Inc., and
Grand Premier Financial, Inc. (incorporated by
reference to the Company's Registration Statement on
Form S-4, as amended, File No. 333-03327).
Exhibit 2.3 Second Amendment to Agreement and Plan of Merger,
dated as of August 15, 1996, among Northern Illinois
Financial Corporation, Premier Financial Services,
Inc., and Grand Premier Financial, Inc.
Exhibit 4.1 Rights Agreement, dated as of July 8, 1996, between
Grand Premier Financial, Inc. and Premier Trust
Services, Inc. (incorporated by reference to the
Company's Registration Statement on Form S-4, as
amended, File No. 333-03327).
<PAGE> 6
<TABLE>
<CAPTION>
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(000's omitted except share data)
June 30, December 31,
1996 1995
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Cash and due from banks $ 23,581 $ 27,888
Interest bearing deposits in other banks 674 4,848
Securities available for sale, at market 289,681 333,244
Federal funds sold 9,200 6,500
Loans, net of unearned income 586,428 548,055
Less allowance for loan losses (5,987) (5,585)
Premises and equipment 22,876 22,778
Accrued interest receivable 6,827 7,183
Other real estate owned 731 1,610
Other assets 9,465 7,933
------- -------
$943,476 $954,454
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing $117,081 $113,839
Interest bearing 694,886 686,325
-------- --------
Total deposits 811,967 800,164
Short-term borrowings 17,098 36,872
Long-term borrowings 8,567 11,588
Other liabilities 9,819 11,077
Dividends payable 503 857
------- -------
Total liabilities 847,954 860,558
-------- --------
Shareholders' equity
Common stock, no par value; authorized
10,000,000 shares; issued and
outstanding 2,956,784 and 2,956,784
shares 16,697 16,697
Retained earnings 71,788 68,391
Net unrealized securities gains, net
of tax 7,037 8,808
-------- --------
Total shareholders' equity 95,522 93,896
-------- --------
$943,476 $954,454
======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted except share data)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
---- ----
<S> <C> <C>
Interest income
Interest and fees on loans $24,579 $21,733
Interest on federal funds sold 146 415
Interest on securities
Taxable 6,287 6,619
Exempt from federal income tax 2,808 2,262
Interest on deposits in other banks 35 9
------- -------
Total interest income 33,855 31,038
------- -------
Interest expense
Interest on deposits 15,151 13,276
Interest on short-term borrowings 857 1,251
Interest on long-term debt 282 215
------- -------
Total interest expense 16,290 14,742
------- -------
Net interest income 17,565 16,296
Provision for loan losses 670 94
------- -------
Net interest income after provision
for loan losses 16,895 16,202
------- -------
Other income
Fees for customer deposit services 1,955 1,665
Other operating income 1,270 1,000
Trust department income 272 215
Securities gains 395 1,224
------- -------
Total other income 3,892 4,104
------- -------
Other expenses
Salaries and employee benefits 8,522 7,391
Occupancy and equipment expense 2,181 1,913
Data processing 544 607
Federal Deposit Insurance premiums 5 824
Other 3,937 3,651
------- -------
Total other expenses 15,189 14,386
------- -------
Income before income taxes 5,598 5,920
Applicable income taxes 1,196 1,273
------- -------
Net Income $ 4,402 $ 4,647
======= =======
Average number of common shares outstanding 2,957 2,986
Earnings per common share $1.49 $1.56
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted except share data)
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
---- ----
<S> <C> <C>
Interest income
Interest and fees on loans $12,453 $11,117
Interest on federal funds sold 62 293
Interest on securities
Taxable 3,016 3,311
Exempt from federal income tax 1,359 1,117
Interest on deposits in other banks 7 2
------- -------
Total interest income 16,897 15,840
------- -------
Interest expense
Interest on deposits 7,494 6,981
Interest on short-term borrowings 361 637
Interest on long-term debt 152 136
------- -------
Total interest expense 8,007 7,754
------- -------
Net interest income 8,890 8,086
Provision for loan losses 364 30
------- -------
Net interest income after provision
for loan losses 8,526 8,056
------- -------
Other income
Fees for customer deposit services 1,026 840
Other operating income 509 492
Trust department fees 147 106
Gains on other real estate owned 327
Securities gains 383 931
------- -------
Total other income 2,392 2,369
------- -------
Other expenses
Salaries and employee benefits 4,388 3,658
Occupancy and equipment expense 1,077 891
Data processing 253 304
Federal Deposit Insurance premiums 2 412
Other 2,180 2,042
------- -------
Total other expenses 7,900 7,307
------- -------
Income before income taxes 3,018 3,118
Applicable income taxes 657 639
------- -------
Net Income $ 2,361 $ 2,479
======= =======
Average number of common shares outstanding 2,957 2,971
Earnings per common share $.80 $.83
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(000's omitted except share data)
Net
Unrealized
Gains (Losses)
Common Stock Retained on Available for
Shares Amount Earnings Sale Securities
--------- ------- -------- ----------------
<S> <C> <C> <C> <C>
Balance January 1, 1995 3,006,477 $16,978 $61,090 $(3,409)
Net Income 4,647
Cash dividends
$.34 per share (1,014)
Cost of shares
acquired (48,086) (272) (1,057)
Change in unrealized
gains (losses) on
available for sale
securities 5,878
--------- ------- ------- -------
Balance, June 30, 1995 2,958,391 $16,706 $63,666 $ 2,469
========= ======== ======= =======
Balance, January 1, 1996 2,956,784 $16,697 $68,391 $ 8,808
Net income 4,402
Cash dividends
$.34 per share (1,005)
Change in unrealized
gains (losses) on
available for sale
securities (1,771)
--------- ------- ------- -------
Balance, June 30, 1996 2,956,784 $16,697 $71,788 $ 7,037
========= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends received $34,449 $31,737
Fees and commissions received 3,497 2,880
Interest paid (16,806) (14,343)
Cash paid to suppliers and employees (13,558) (14,750)
Income taxes paid (1,865) (1,761)
-------- --------
Net cash provided by operating
activities 5,717 3,763
-------- --------
Cash flows from investing activities:
Net decrease in interest bearing
deposits in other banks 4,174 932
Sales of securities
Available for sale 34,257 17,194
Maturities of securities
Held to maturity 3,011
Available for sale 72,520 50,235
Purchase of investment securities
Available for sale (67,186) (56,586)
Net increase in loans (39,122) (25,216)
Purchase of officer life insurance (164) (174)
Capital expenditures (1,170) (712)
Proceeds from the sale of property
and equipment 31 14
Proceeds from sale of other real
estate owned 1,687 165
------- --------
Net cash provided (used) in
investing activities 5,027 (11,137)
------- --------
Cash flows from financing activities:
Net increase in deposits 11,803 18,333
Net increase (decrease) in short-term
borrowings (19,774) 1,217
Net increase (decrease) in long-term
borrowings (3,021) 938
Dividends paid (1,359) (1,382)
Common stock acquired (1,328)
------- --------
Net cash provided (used) in
financing activities (12,351) 17,778
-------- -------
Net increase (decrease) in cash and
cash equivalents (1,607) 10,404
Cash and cash equivalents at beginning
of period 34,388 36,866
------- -------
Cash and cash equivalents at end of period $32,781 $47,270
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Continued)
1996 1995
---- ----
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 4,402 $ 4,647
------- -------
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for premium amortization 1,021 1,285
Provision for discount accretion (783) (682)
Provision for depreciation 1,042 983
Provision for loan losses 670 94
Provision for deferred income taxes (377) (1,565)
Gain on sale of securities (395) (1,224)
(Gain) loss on disposition of equipment (1) 17
(Gain) on sale of other real estate owned (327)
Changes in assets and liabilities:
Decrease in other assets 671 144
Increase (decrease) in other
liabilities (206) 64
----- -----
Total adjustments 1,315 (884)
------- --------
Net cash provided by operating activities $ 5,717 $ 3,763
======= =======
Supplemental schedule of noncash investing
and financing activities:
Net change in unrealized gains on
securities available for sale $(1,771) $ 5,878
======= =======
Loans transferred to other real estate
owned throughout the year $ 481
======= =======
Contributions and net earnings of the
Execuflex Plan $ 189 $ 219
======= =======
Securities purchased in June payable
in July $ 115 $ 506
======= =======
Securities purchased settled in
subsequent period $(1,353) $ (936)
======= ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 12
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
financial information of Northern Illinois Financial Corporation
("Northern Illinois") and its subsidiaries. All significant
intercompany balances and transactions have been eliminated. The
consolidated financial statements as of June 30, 1996 and 1995 have
not been audited by independent public accountants. In management's
opinion, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the financial position and
results of operations for the interim periods have been made. For a
further description of significant accounting policies of Northern
Illinois, see Northern Illinois' 1995 Annual Report on Form 10-K and
Grand Premier's Registration Statement on Form S-4, as amended, File
No. 333-03327.
2. CONSUMMATION OF MERGER
On August 22, 1996, the merger (the "Merger") of Northern Illinois
and Premier Financial Services, Inc. ("Premier") with and into Grand
Premier Financial, Inc. ("Grand Premier") was consummated pursuant to
the terms and conditions of the Agreement and Plan of Merger, dated
January 22, 1996, as amended by the First Amendment to the Agreement
and Plan of Merger, dated March 18, 1996, and the Second Amendment to
the Agreement and Plan of Merger, dated August 15, 1996, among
Northern Illinois, Premier and Grand Premier. Pursuant to the terms
of the Merger, each outstanding share of Northern Illinois common
stock has been converted into the right to receive 4.250 shares of
Grand Premier common stock, each outstanding share of Premier common
stock has been converted into the right to receive 1.116 shares of
Grand Premier common stock, and each outstanding share of preferred
stock of Premier has been converted into the right to receive a share
of Grand Premier preferred stock having terms and conditions
substantially identical to the terms and conditions of such Premier
preferred stock. The Merger will be accounted for as a pooling-of
interests. Concurrently with the execution of the Merger Agreement,
Northern Illinois and Premier entered into reciprocal stock option
agreements. The options granted pursuant to those stock option
agreements expired upon consummation of the Merger.
<PAGE> 13
<TABLE>
<CAPTION>
PREMIER FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1996 1995
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Assets
Cash and non-interest bearing deposits $ 29,290,971 $ 37,390,597
Interest bearing deposits 1,282,324 676,367
Federal funds sold 1,325,000 -
------------ ------------
Cash and cash equivalents 31,898,295 38,066,964
------------ ------------
Securities available for sale 269,313,341 265,326,397
Loans 331,027,351 326,975,311
Less: Unearned discount (235,375) (278,242)
Allowance for possible loan losses (3,757,870) (3,849,863)
------------ ------------
Net loans 327,034,106 322,847,206
------------ ------------
Bank premises and equipment 13,562,479 13,898,077
Excess cost over fair value of net
assets acquired 19,211,934 20,008,150
Accrued interest receivable 6,237,713 6,514,630
Other assets 3,918,746 3,557,959
------------ ------------
Total assets $671,176,614 $670,219,383
============ ============
Liabilities and stockholders' equity
Non-interest bearing deposits $ 76,662,097 $ 82,694,865
Interest bearing deposits 491,223,599 468,797,581
------------ ------------
Deposits 567,885,696 551,492,446
------------ ------------
Short-term borrowings 14,895,000 32,725,000
Securities sold under agreements
to repurchase 27,200,316 18,635,335
Accrued taxes and other expenses 2,105,851 5,033,133
Other liabilities 502,534 226,065
------------ ------------
Total liabilities $612,589,397 $608,111,979
------------ ------------
Stockholders' equity
Preferred stock - $1 par value, 1,000,000
shares authorized:
Series A perpetual, $1,000 stated value,
8.25%, 7,000 shares authorized, 5,000
shares issued and outstanding 5,000,000 5,000,000
Series B convertible, $1,000 stated value,
7.50%, 7,250 shares authorized, issued
and outstanding 7,250,000 7,250,000
Series D perpetual, $1,000 stated value,
7.50%, 3,300 shares authorized, 2,000
shares issued and outstanding 2,000,000 2,000,000
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
PREMIER FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Continued)
June 30, December 31,
1996 1995
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Common stock- $5.00 par value
June 30, December 31,
No. of Shares 1996 1995
Authorized 15,000,000 15,000,000
Issued 6,592,582 6,544,347
Outstanding 6,592,582 6,544,347 32,962,910 32,721,735
Retained earnings 15,446,582 13,893,248
Unrealized gain (loss) on securities
available for sale, net of tax (4,072,275) 1,242,421
------------ ------------
Stockholders' equity $ 58,587,217 $ 62,107,404
------------ ------------
Total liabilities and stockholders'
equity $671,176,614 $670,219,383
============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
PREMIER FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
---- ----
<S> <C> <C>
Interest income
Interest and fees on loans $14,232,232 $13,301,848
Interest and dividends on investment
securities:
Taxable 7,243,718 6,957,988
Exempt from federal income tax 835,783 1,112,889
Other interest income 135,588 151,235
----------- -----------
Interest income 22,447,321 21,523,960
----------- -----------
Interest expense
Interest on deposits 10,164,867 9,513,580
Interest on short-term borrowings 1,199,218 1,172,909
----------- -----------
Interest expense 11,364,085 10,686,489
----------- -----------
Net interest income 11,083,236 10,837,471
Provision for possible loan losses 250,000 102,000
----------- -----------
Net interest income after provision
for possible loan losses 10,833,236 10,735,471
----------- -----------
Other income
Trust fees 1,374,657 1,285,976
Service charges on deposits 974,449 1,001,561
Net gains on loans sold to secondary market 74,418 59,940
Investment securities gains, net 113,895 60,273
Other operating income 1,200,810 855,003
----------- -----------
Other income 3,738,229 3,262,753
----------- -----------
Other expenses
Salaries 4,053,822 4,043,789
Pension, profit sharing and other
employee benefits 675,747 660,080
Net occupancy of bank premises 1,095,401 1,051,687
Furniture and equipment 439,245 559,454
Federal Deposit Insurance premiums 3,000 561,548
Amortization of excess cost over fair value
of net assets acquired 796,216 796,216
Other 2,905,051 2,536,207
----------- -----------
Other expenses 9,968,482 10,208,981
----------- -----------
Earnings before income taxes 4,602,983 3,789,243
Applicable income taxes 1,620,564 1,116,017
----------- -----------
Net earnings $ 2,982,419 $ 2,673,226
=========== ===========
Earnings per share:
Average weighted shares outstanding 6,754,189 6,686,431
Net earnings $.36 $.32
==== ====
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
PREMIER FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
---- ----
<S> <C> <C>
Interest income
Interest and fees on loans $ 7,142,866 $ 6,858,822
Interest and dividends on investment
securities:
Taxable 3,753,644 3,624,227
Exempt from federal income tax 412,809 558,914
Other interest income 49,274 48,254
---------- -----------
Interest income 11,358,593 11,090,217
---------- -----------
Interest expense
Interest on deposits 5,093,036 4,978,262
Interest on short-term borrowings 661,504 609,122
---------- -----------
Interest expense 5,754,540 5,587,384
---------- -----------
Net interest income 5,604,053 5,502,833
Provision for possible loan losses 150,000 51,000
---------- -----------
Net interest income after provision
for possible loan losses 5,454,053 5,451,833
---------- -----------
Other income
Trust fees 711,461 637,037
Service charges on deposits 487,298 501,884
Net gains on loans sold to secondary market (21,077) 43,393
Investment securities gains, net 44,976 37,755
Other operating income 600,327 435,141
---------- -----------
Other income 1,822,985 1,655,210
---------- -----------
Other expenses
Salaries 2,069,106 2,036,286
Pension, profit sharing and other
employee benefits 322,501 340,063
Net occupancy of bank premises 531,555 513,278
Furniture and equipment 203,654 263,672
Federal Deposit Insurance premiums 1,500 280,774
Amortization of excess cost over fair value
of net assets acquired 398,108 398,108
Other 1,492,100 1,323,728
---------- -----------
Other expenses 5,018,524 5,155,909
---------- -----------
Earnings before income taxes 2,258,514 1,951,134
Applicable income taxes 765,834 576,711
---------- -----------
Net earnings $ 1,492,680 $ 1,374,423
=========== ===========
Earnings per share:
Average weighted shares outstanding 6,763,153 6,683,825
Net earnings $.18 $.17
==== ====
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
PREMIER FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,982,419 $ 2,673,226
Adjustments to reconcile net earnings
to net cash from operating activities:
Amortization net, related to:
Investment securities 598,503 687,934
Excess of cost over net assets acquired 796,216 796,216
Other 168,334 167,679
Depreciation 494,292 552,884
Provision for possible loan losses 250,000 102,000
Gain on sale related to:
Investment securities (113,895) (60,273)
Loans sold to secondary market (74,418) (59,940)
Change in:
Accrued interest receivable 276,917 (956,897)
Other assets (360,787) (726,466)
Accrued taxes and other expenses (2,927,282) 2,742,264
Other liabilities 3,014,343 132,254
----------- ----------
Net cash from operating activities 5,104,642 6,050,881
----------- ----------
Cash flows from investing activities:
Purchase of investment securities
held-to-maturity - (1,249,800)
Purchase of securities available
for sale (139,388,180) (81,762,186)
Proceeds from:
Maturities of investment securities
held-to-maturity - 2,881,563
Maturities of securities available
for sale 39,602,762 18,396,359
Sales of securities available for sale 87,261,296 50,709,062
Net (increase) decrease in loans (4,503,683) (17,367,939)
Purchase of bank premises and equipment (185,827) (617,184)
----------- ------------
Net cash from investing activities (17,213,632) (29,010,125)
----------- ------------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits 16,393,250 20,485,234
Securities sold under agreements
to repurchase 8,564,981 657,712
Short term borrowings (17,830,000) (8,755,000)
Reissuance of treasury stock - 149,762
Exercised stock options 152,860 -
Cash dividends paid (1,340,770) (1,205,545)
----------- ------------
Net cash from financing activities 5,940,321 11,332,163
----------- ------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
PREMIER FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
(Continued)
1996 1995
---- ----
<S> <C> <C>
Decrease in cash and cash equivalents (6,168,669) (11,627,081)
Cash and cash equivalents,
beginning of year 38,066,964 45,870,359
----------- -----------
Cash and cash equivalents, for
six months ended June 30 $ 31,898,295 $34,243,278
============ ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 19
PREMIER FINANCIAL SERVICES, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Premier
Financial Services, Inc. ("Premier") and its subsidiaries, all of
which are wholly-owned. Significant intercompany balances and
transactions have been eliminated. The consolidated financial
statements as of June 30, 1996 and 1995 have not been audited by
independent public accountants. In the opinion of management, the
interim financial statements reflect all adjustments (consisting only
of adjustments of a normal recurring nature) necessary for a fair
presentation of Premier's financial position, results of operations
and cash flows for the interim periods presented. The results for
such interim periods are not necessarily indicative of the results for
the full year. These financial statements should be read in
conjunction with the consolidated financial statements and the
accompanying notes to the consolidated financial statements included
in Premier's 1995 Annual Report to Stockholders and Grand Premier's
Registration Statement on Form S-4, as amended, File No. 333-03327.
2. CONSUMMATION OF MERGER
On August 22, 1996, the merger (the "Merger") of Premier and Northern
Illinois Financial Corporation ("Northern Illinois") with and into
Grand Premier Financial, Inc. ("Grand Premier") was consummated
pursuant to the terms and conditions of the Agreement and Plan of
Merger, dated January 22, 1996, as amended by the First Amendment to
the Agreement and Plan of Merger, dated March 18, 1996, and the Second
Amendment to the Agreement and Plan of Merger, dated August 15, 1996,
among Premier, Northern Illinois and Grand Premier. Pursuant to the
terms of the Merger, each outstanding share of Northern Illinois
common stock has been converted into the right to receive 4.250 shares
of Grand Premier common stock, each outstanding share of Premier
common stock has been converted into the right to receive 1.116 shares
of Grand Premier common stock, and each outstanding share of preferred
stock of Premier has been converted into the right to receive a share
of Grand Premier preferred stock having terms and conditions
substantially identical to the terms and conditions of such Premier
preferred stock. The Merger will be accounted for as a pooling-of
interests. Concurrently with the execution of the Merger Agreement,
Northern Illinois and Premier entered into reciprocal stock option
agreements. The options granted pursuant to those stock option
agreements expired upon consummation of the Merger.
3. REDEMPTION OF PREMIER SERIES A PREFERRED STOCK
On July 17, 1996, Premier redeemed all 5,000 shares of Premier Series
A Perpetual Preferred Stock which was then outstanding at its stated
value of $1,000 per share. Such redemption was effected through the
use of borrowed funds.
<PAGE> 20
<TABLE>
<CAPTION>
GRAND PREMIER FINANCIAL, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
(Unaudited)
(in thousands)
Pro Forma Pro Forma Pro Forma
Adjustments Premier Combined
for following Assuming
Redemption Redemption Redemption
of Premier of Premier of Premier
Series A Series A Pro Forma Series A
Northern Preferred Preferred Adjust- Preferred
June 30, 1996 Illinois Premier Stock Stock ments Stock
- ------------- -------- ------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cash and due
from banks 23,581 29,291 29,291 52,872
Interest bear-
ing deposits 674 1,282 1,282 1,956
Federal funds
sold 9,200 1,325 1,325 10,525
Securities
available for
sale 289,681 269,313 269,313 558,994
Loans 586,428 330,792 330,792 917,220
Allowance for
loan losses (5,987) (3,758) (3,758) (9,745)
Premises and
equipment 22,876 13,563 13,563 36,439
Excess cost
over fair
value of
assets
acquired 19,212 19,212 19,212
Accrued
interest
receivable 6,827 6,238 6,238 13,065
Other assets 10,196 3,919 3,919 14,115
------- ------- -------- ------- -------- ---------
943,476 671,177 - 671,177 - 1,614,653
======= ======= ======== ======= ======== ==========
Deposits 811,967 567,886 567,886 1,379,853
Borrowings 25,665 42,095 5,000(1) 47,095 5,000 72,760
Other
liabilities 10,322 2,608 2,608 12,930
------- ------- -------- ------- -------- ---------
Total
liabilities 847,954 612,589 5,000 617,589 5,000 1,465,543
------- ------- -------- ------- -------- ---------
The accompanying notes are an integral part of these financial statements.
_______________
(1) Assumes redemption of 5,000 shares of Premier Series A Preferred Stock
at stated value through the use of borrowed funds.
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
GRAND PREMIER FINANCIAL, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
(Unaudited)
(in thousands)
(Continued)
Pro Forma Pro Forma Pro Forma
Adjustments Premier Combined
for following Assuming
Redemption Redemption Redemption
of Premier of Premier of Premier
Series A Series A Pro Forma Series A
Northern Preferred Preferred Adjust- Preferred
June 30, 1996 Illinois Premier Stock Stock ments stock
- ------------- -------- ------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Preferred Stock
Premier Series A
perpetual 5,000 (5,000)(1) - -
Premier Series B
convertible 7,250 7,250 (7,250) -
Premier Series D
perpetual 2,000 2,000 (2,000) -
GPF Series B
convertible 7,250 7,250
GPF Series C
perpetual 2,000 2,000
Common stock 16,697 32,963 32,963 (49,461) 199
Additional paid
in capital 49,461 49,461
Retained
earnings 71,788 15,447 15,447 87,235
Unrealized
gain (loss)
on securities
available
for sale 7,037 (4,072) (4,072) - 2,965
------ ------- -------- ------- ------ ------
Total
stockholders'
equity 95,522 58,588 (5,000) 53,588 - 149,110
------- ------- -------- ------- -------- ---------
943,476 671,177 671,177 - 1,614,653
======= ======= ======== ======= ======== =========
The accompanying notes are an integral part of these financial statements.
_______________
(1) Assumes redemption of 5,000 shares of Premier Series A Preferred Stock
at stated value through the use of borrowed funds.
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
GRAND PREMIER FINANCIAL, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(Unaudited)
(In thousands, except share data)
Six Months Ended Northern Pro Forma Pro Forma
June 30, 1996 Illinois Premier Adjustments Combined
- ---------------- -------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Interest income
Loans 24,579 14,232 38,811
Federal funds sold 146 146
Securities - taxable 6,287 7,244 13,531
Securities - nontaxable 2,808 836 3,644
Other 35 135 170
------ ------ ------------ ------
Total interest income 33,855 22,447 - 56,302
------ ------ ------------ ------
Interest expense
Deposits 15,151 10,165 25,316
Borrowings 1,139 1,199 2,338
------ ------ ------------ ------
Total interest expense 16,290 11,364 - 27,654
------ ------ ------------ ------
Net interest income 17,565 11,083 - 28,648
Provision for loan losses 670 250 920
------ ------ ------------ ------
Net interest income after
provision for loan losses 16,895 10,833 - 27,728
------ ------ ------------ ------
Other income
Fees and service charges
for services 1,955 974 2,929
Trust fees 272 1,375 1,647
Securities gains 395 114 509
Gain on sale of loans 74 74
Other operating income 1,270 1,201 2,471
------ ------ ------------ ------
Total other income 3,892 3,738 - 7,630
------ ------ ------------ ------
Other expenses
Salaries and benefits 8,522 4,730 13,252
Occupancy 1,064 1,095 2,159
Furniture and equipment 1,117 439 1,556
Amortization of excess cost
over fair value of assets
acquired 796 796
Other 4,486 2,908 7,394
------ ------ ------------ ------
Total other expenses 15,189 9,968 - 25,157
------ ------ ------------ ------
Income before income taxes 5,598 4,603 - 10,201
Income taxes 1,196 1,621 2,817
------ ------ ------------ ------
Net income 4,402 2,982 - 7,384
====== ====== ============ ======
Earnings per share 1.49 0.36 0.34
====== ====== ============ ======
Weighted average common
and common equivalent
shares outstanding 2,957,000 6,754,189 20,104,925
========= ========= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
GRAND PREMIER FINANCIAL, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(Unaudited)
(In thousands, except share data)
Six Months Ended Northern Pro Forma Pro Forma
June 30, 1995 Illinois Premier Adjustments Combined
- ---------------- -------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Interest income
Loans 21,733 13,302 35,035
Federal funds sold 415 415
Securities - taxable 6,619 6,958 13,577
Securities - nontaxable 2,262 1,113 3,375
Other 9 151 160
------ ------ ----------- ------
Total interest income 31,038 21,524 - 52,562
------ ------ ----------- ------
Interest expense
Deposits 13,276 9,514 22,790
Borrowings 1,466 1,173 2,639
------ ------ ----------- ------
Total interest expense 14,742 10,687 - 25,429
------ ------ ----------- ------
Net interest income 16,296 10,837 - 27,133
Provision for loan losses 94 102 196
------ ------ ----------- ------
Net interest income after
provision for loan losses 16,202 10,735 - 26,937
------ ------ ----------- ------
Other income
Fees and service charges
for services 1,665 1,002 2,667
Trust fees 215 1,286 1,501
Securities gains 1,224 60 1,284
Gain on sale of loans 60 60
Other operating income 1,000 855 1,855
------ ------ ----------- ------
Total other income 4,104 3,263 - 7,367
------ ------ ----------- ------
Other expenses
Salaries and benefits 7,391 4,705 12,096
Occupancy 913 1,052 1,965
Furniture and equipment 1,000 559 1,559
Amortization of excess cost
over fair value of assets
acquired 796 796
Other 5,082 3,097 8,179
------ ------ ----------- ------
Total other expenses 14,386 10,209 - 24,595
------ ------ ----------- ------
Income before income taxes 5,920 3,789 - 9,709
Income taxes 1,273 1,116 2,389
------ ------ ----------- ------
Net income 4,647 2,673 - 7,320
====== ====== =========== ======
Earnings per share 1.56 0.32 0.34
====== ====== =========== ======
Weighted average common
and common equivalent
shares outstanding 2,986,000 6,686,431 20,152,557
========= ========= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
GRAND PREMIER FINANCIAL, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(Unaudited)
(In thousands, except share data)
Three Months Ended Northern Pro Forma Pro Forma
June 30, 1996 Illinois Premier Adjustments Combined
- ------------------ -------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Interest income
Loans 12,453 7,143 19,596
Federal funds sold 62 62
Securities - taxable 3,016 3,754 6,770
Securities - nontaxable 1,359 413 1,772
Other 7 49 56
------ ------ ---------- ------
Total interest income 16,897 11,359 - 28,256
------ ------ ---------- ------
Interest expense
Deposits 7,494 5,093 12,587
Borrowings 513 662 1,175
------ ------ ----------- ------
Total interest expense 8,007 5,755 - 13,762
------ ------ ----------- ------
Net interest income 8,890 5,604 - 14,494
Provision for loan losses 364 150 514
------ ------ ----------- ------
Net interest income after
provision for loan losses 8,526 5,454 - 13,980
------ ------ ----------- ------
Other income
Fees and service charges
for services 1,026 487 1,513
Trust fees 147 712 859
Securities gains 383 45 428
Loss on sale of loans (21) (21)
Other operating income 836 600 1,436
------ ------ ----------- ------
Total other income 2,392 1,823 - 4,215
------ ------ ----------- ------
Other expenses
Salaries and benefits 4,388 2,392 6,780
Occupancy 533 531 1,064
Furniture and equipment 544 204 748
Amortization of excess cost
over fair value of assets
acquired 398 398
Other 2,435 1,493 3,928
------ ------ ----------- ------
Total other expenses 7,900 5,018 - 12,918
------ ------ ----------- ------
Income before income taxes 3,018 2,259 - 5,277
Income taxes 657 766 1,423
------ ------ ----------- ------
Net income 2,361 1,493 - 3,854
====== ====== =========== ======
Earnings per share 0.80 0.18 0.18
====== ====== ======
Weighted average common
and common equivalent
shares outstanding 2,957,000 6,763,153 20,114,929
========= ========= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
GRAND PREMIER FINANCIAL, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(Unaudited)
(In thousands, except share data)
Three Months Ended Northern Pro Forma Pro Forma
June 30, 1995 Illinois Premier Adjustments Combined
- ------------------ -------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Interest income
Loans 11,117 6,859 17,976
Federal funds sold 293 293
Securities - taxable 3,311 3,624 6,935
Securities - nontaxable 1,117 559 1,676
Other 2 48 50
------ ------ ----------- ------
Total interest income 15,840 11,090 - 26,930
------ ------ ----------- ------
Interest expense
Deposits 6,981 4,978 11,959
Borrowings 773 609 1,382
------ ------ ----------- ------
Total interest expense 7,754 5,587 - 13,341
------ ------ ----------- ------
Net interest income 8,086 5,503 - 13,589
Provision for loan losses 30 51 81
------ ------ ----------- ------
Net interest income after
provision for loan losses 8,056 5,452 - 13,508
------ ------ ----------- ------
Other income
Fees and service charges
for services 840 502 1,342
Trust fees 106 637 743
Securities gains 931 38 969
Gain on sale of loans 43 43
Other operating income 492 435 927
------ ------ ----------- ------
Total other income 2,369 1,655 - 4,024
------ ------ ----------- ------
Other expenses
Salaries and benefits 3,658 2,376 6,034
Occupancy 431 513 944
Furniture and equipment 460 264 724
Amortization of excess cost
over fair value of assets
acquired 398 398
Other 2,758 1,605 4,363
------ ------ ----------- ------
Total other expenses 7,307 5,156 - 12,463
------ ------ ----------- ------
Income before income taxes 3,118 1,951 - 5,069
Income taxes 639 577 1,216
------ ------ ----------- ------
Net income 2,479 1,374 - 3,853
====== ====== =========== ======
Earnings per share 0.83 0.17 0.18
====== ====== =========== ======
Weighted average common
and common equivalent
shares outstanding 2,971,000 6,683,825 20,085,899
========= ========= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 26
Notes to Pro Forma Financial Statements
(Unaudited)
1. The merger of Northern Illinois Financial Corporation ("Northern
Illinois") and Premier Financial Services, Inc. ("Premier") with and
into Grand Premier Financial, Inc. ("Grand Premier") was consummated
on August 22, 1996 and will be accounted for as a pooling of
interests. Each outstanding share of Northern Illinois and Premier
common stock has been converted into 4.250 shares and 1.116 shares of
Grand Premier common stock, respectively. Based upon the number of
shares of common stock of Northern Illinois and Premier outstanding as
of June 30, 1996, 12,566,332 and 7,357,321 shares of Grand Premier common
stock ck would have been issued to the respective holders of Northern
Illinois common stock and Premier common stock, respectively.
2. Each of the 7,250 shares of Premier Series B Preferred Stock has been
converted into the right to receive one share of Grand Premier Series
B Preferred Stock, and each of the 2,000 shares of Premier Series D
Preferred Stock has been converted into the right to receive one share
of Grand Premier Series C Preferred Stock.
3. On July 17, 1996, Premier redeemed all of the 5,000 outstanding shares
of Premier Series A Preferred Stock at stated value using borrowed
funds. This redemption is assumed to have occurred on June 30, 1996.
4. Earnings per share for the six months and three months ended June 30,
1996 and 1995 were computed by dividing net income (less preferred
stock dividends) by the total of the average number of common shares
and stock options outstanding during such periods. The aggregate
amount of preferred stock dividends paid for the six months ended June
30, 1996 and 1995 and for the three months ended June 30, 1996 and
1995 were 553,125, 553,125, 276,563, and 276,563, respectively.
<PAGE> 27
SIGNATURE
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.
GRAND PREMIER FINANCIAL, INC.
(Registrant)
Date: September 5, 1996 By: /s/ David L. Murray
------------------------------------
David L. Murray
Senior Executive Vice President
and Chief Financial Officer
<PAGE> 28
EXHIBIT INDEX
Page
Number Description Number
- ------ ------------ ------
2.1 Agreement and Plan of Merger, dated January 22, 1996,
among Northern Illinois Financial Corporation, Premier
Financial Services, Inc. and Grand Premier Financial,
Inc. (incorporated by reference to the Company's
Registration Statement on Form S-4, as amended, File
No. 333-03327).
2.2 First Amendment to Agreement and Plan of Merger, dated
March 18, 1996, among Northern Illinois Financial
Corporation, Premier Financial Services, Inc., and
Grand Premier Financial, Inc. (incorporated by
reference to the Company's Registration Statement on
Form S-4, as amended, File No. 333-03327).
2.3 Second Amendment to Agreement and Plan of Merger,
dated as of August 15, 1996, among Northern Illinois
Financial Corporation, Premier Financial Services,
Inc., and Grand Premier Financial, Inc.
4.1 Rights Agreement, dated as of July 8, 1996, between
Grand Premier Financial, Inc. and Premier Trust
Services, Inc. (incorporated by reference to the
Company's Registration Statement on Form S-4, as
amended, File No. 333-03327).
EXHIBIT 2.3
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This Second Amendment to the Agreement and Plan of Merger
(this "Amendment") is entered into as of August 15, 1996 by and among
NORTHERN ILLINOIS FINANCIAL CORPORATION, an Illinois corporation ("Northern
Illinois"), PREMIER FINANCIAL SERVICES, INC., a Delaware corporation
("Premier"), and GRAND PREMIER FINANCIAL, INC., a Delaware corporation ("GPF").
WHEREAS, Northern Illinois, Premier and GPF have entered into
an Agreement and Plan of Merger, dated as of January 22, 1996, as amended
by The First Amendment to the Agreement and Plan of Merger, dated March
18, 1996 (the "Agreement"), providing for the merger of Northern Illinois and
Premier with and into GPF, subject to the terms and conditions set forth
therein; and
WHEREAS, Northern Illinois, Premier and GPF desire to make certain
technical amendments to Section 1.2 of the Agreement to conform certain
provisions of the Agreement to the requirements of the Secretary of State
of the State of Illinois; and
NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending
to be legally bound hereby, the parties agree as follows:
1. SECTION 1.2 of the Agreement is hereby amended by deleting
the same in its entirety and substituting in lieu thereof the following:
1.2 EFFECTIVE TIME. The Merger shall become effective
upon the issuance of a certificate of merger by the Secretary
of State. The term "Effective Time" shall be the date and time
when the Merger becomes effective, in accordance with this
Section 1.2.
2. All references in the Agreement to the "Illinois Secretary"
shall be deemed to be references to the Secretary of State of the State of
Illinois and all references in the Agreement to the "Delaware Secretary"
shall be deemed to be references to the Secretary of State of the State of
Delaware.
3. REFERENCES. All references in the Agreement to "this
Agreement" shall hereafter refer to the Agreement as amended hereby.
4. COUNTERPARTS. This Second Amendment may be executed in
counterparts, all of which shall be considered one and the same instrument,
it being understood that all parties need not sign the same counterpart.
<PAGE> 2
IN WITNESS WHEREOF, Premier, Northern Illinois and GPF have caused
this Second Amendment to be executed by their respective officers thereunto
duly authorized as of the date first above written.
PREMIER FINANCIAL SERVICES, INC. NORTHERN ILLINOIS FINANCIAL
CORPORATION
By:/s/ Richard L. Geach By:/s/ Robert W. Hinman
--------------------------------- ---------------------------------
Richard L. Geach Robert W. Hinman
President and Chief Executive President and Chief Executive
Officer Officer
GRAND PREMIER FINANCIAL, INC.
By:/s/ Richard L. Geach
----------------------------------
Richard L. Geach
Chief Executive Officer
By:/s/ Robert W. Hinman
----------------------------------
Robert W. Hinman
President
