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)
July 21, 1998 (July 20, 1998)
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SIS BANCORP, INC.
(exact name of registrant as specified in charter)
Massachusetts 000-20809 04-3303264
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1441 Main Street
Springfield, Massachusetts 01102
(address of principal office) (Zip Code)
(413) 748-8000
(Registrant's telephone number, including area code)
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Item 5: Other Events
On July 20, 1998, SIS Bancorp, Inc. (the "Company") announced that it and
Peoples Heritage Financial Group, Inc. ("PHFG") had entered into an Agreement
and Plan of Merger, dated as of July 20, 1998 (the "Agreement"), which sets
forth the terms and conditions pursuant to which the Company would be merged
with and into Peoples Heritage Merger Corp., a wholly-owned subsidiary of PHFG
(the "Merger"). The Agreement provides, among other things, that as a result of
the Merger, each outstanding share of common stock of the Company (subject to
certain exceptions) will be converted into the right to receive 2.25 shares of
PHFG's common stock, plush cash in lieu of any fractional share interest.
Consummation of the Merger is subject to a number of conditions, including, but
not limited to, (i) the approval of the Agreement and the Merger by the
shareholders of the Company and (ii) the receipt of requisite regulatory
approvals.
Pursuant to the Agreement, the Company's Massachusetts-based banking
subsidiary, Springfield Institution for Savings (d/b/a "SIS Bank"), will be
merged into PHFG's Massachusetts-based banking subsidiary, Family Bank, FSB. It
is PHFG's current intention to conduct business in the market areas in which
Springfield Institution for Savings conducted business prior to such bank merger
under the name "SIS Bank". The Company's other banking subsidiary,
Connecticut-based Glastonbury Bank and Trust Company, will be held as a separate
institution.
Pursuant to the Agreement, one director of the Company will become a
director of PHFG and F. William Marshall, Jr., the Company's President and Chief
Executive Officer, will become an executive officer of PHFG and Vice Chairman of
PHFG's Senior Management Committee.
In connection with the Agreement, PHFG and the Company entered into a Stock
Option Agreement, dated as of July 20, 1998, pursuant to which the Company
granted PHFG an option (the "Option") to purchase up to 1,385,383 shares of the
Company's common stock (subject to adjustment as set forth therein), which
represents 19.9% of the Company's outstanding shares of common stock, at a
purchase price of $44.00 per share (subject to adjustment as set forth therein).
The Option will become exercisable upon the occurrence of certain events, as
specified in the Stock Option Agreement, none of which has occurred as of July
20, 1998.
The press release issued by PHFG and the Company with respect to the
announcement of the transaction described herein is attached hereto as Exhibit
99.1 and is hereby incorporated herein by reference in its entirety.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) The following exhibit is included with this Report:
Exhibit 99.1 Press Release dated July 20, 1998
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Signatures: Under 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, hereunto duly authorized.
SIS BANCORP, INC.
Dated: July 21, 1998 By: /s/ F. William Marshall, Jr.
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F. William Marshall, Jr.
President & Chief Executive Officer
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Date: July 20, 1998 Contact:
Ting Chang, vice president
Investor Relations
(413) 748-8271
PEOPLES HERITAGE TO ACQUIRE SIS BANCORP
Extends Franchise into Western Massachusetts and Connecticut
Portland, Maine, July 20, 1998 - Peoples Heritage Financial Group, Inc. (NASDAQ:
PHBK), a multi-state bank and financial services holding company headquartered
in Portland, Maine, has reached a definitive agreement to acquire Springfield,
Massachusetts-based SIS Bancorp, Inc. (NASDAQ: SISB). The acquisition will
create a $12 billion banking company, materially enhance Peoples' Massachusetts
banking franchise and extend it into the western part of the state. Peoples will
also gain its initial presence in Connecticut through SIS's Glastonbury Bank and
Trust Company.
Under the terms of the merger agreement, shareholders of SIS will receive 2.25
shares of Peoples Heritage commons stock for each whole share of SIS common
stock plus cash in lieu of any fractional share. Approximately 16.8 million
shares of Peoples Heritage common stock will be issued in the transaction,
including shares issuable upon the exercise of substitute stock options. The
exchange will be tax free and accounted for as a pooling of interests.
Based on a closing price of Peoples Heritage common stock of $25 7/16 per share
on July 17, 1998, the deal is valued at $427.7 million and SIS shareholders will
receive $57.23 of Peoples Heritage common stock for each share of SIS common
stock. The price equates to 3.13 times the book value of SIS at March 31, 1998
and 21.4 times SIS' estimated 1999 earnings.
"We continue to grow as planned, contiguous to our existing franchise through
the acquisition of another strong community bank," said William J. Ryan,
Chairman, President and Chief Executive Officer of Peoples Heritage.
-MORE-
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His comments were echoed by F. William Marshall, Jr., President and Chief
Executive Officer of SIS: "An essential factor in our decision to move forward
with this opportunity is Peoples Heritage's strong commitment to serving local
communities." Mr. Marshall will continue to serve as President and Chief
Executive Officer of SIS and will be named Vice Chairman of the Executive
Management Committee of Peoples Heritage Financial Group.
Under the terms of the agreement, SIS Bank will continue to operate under its
own name. Glastonbury Bank & Trust Company, recently acquired by SIS, will
continue to operate as a Connecticut bank.
The agreement is subject to the receipt of approval of the shareholders of SIS
and requisite regulatory approvals. It is anticipated that the transaction will
be completed by the end of 1998. As part of the agreement, SIS gave Peoples
Heritage an option to purchase 19.9 percent of its outstanding common stock
under certain circumstances.
Peoples Heritage has $9.8 billion in assets and operates 194 branches through
its three banking subsidiaries: Peoples Heritage Bank with Maine's leading
deposit market share, Bank of New Hampshire with that state's leading deposit
market share, and Family Bank in Massachusetts. The acquisition of SIS will
increase the number of the Company's banking offices in Massachusetts to 56 and
create its first banking presence in Connecticut with eight offices, mostly
located in the central Connecticut. SIS has assets of $1.8 billion and the
leading market share in Hampden County in Massachusetts. Peoples Heritage will
have the eighth largest deposit market share in Massachusetts following
completion of the transaction.
A conference call on the acquisition announcement and Peoples' second quarter
earnings, also announced today, will be held at 10 a.m. eastern time.
For PHBK investor inquiries please contact Brian Arsenault, Vice President,
Investor Relations and Corporate Communications, at (207) 761-8517.
For SIS investor inquiries, please contact Ting Chang, Vice President, Investor
Relations and Corporate Planning, at (413)748-8271.
(end)
