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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)
September 10, 1995
UJB Financial Corp.
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(Exact name of registrant as specified in its charter)
NEW JERSEY 1-6451 22-1903313
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(State or other juris- (Commission (IRS Employer
diction of incorporation File No.) Identification No.)
or organization)
301 Carnegie Center, P.O. Box 2066,
Princeton, New Jersey 08543-2066
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(Address of principal executive offices)
Registrant's telephone number, including area code (609) 987-3200
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Item 5. Other Information.
Agreement and Plan of Merger
On September 10, 1995, Registrant and The Summit Bancorporation ("Summit"),
entered into an Agreement and Plan of Merger (the "Agreement") providing for,
among other things, (i) the merger of Summit into the Registrant (the "Merger");
(ii) the exchange of each outstanding share of the Common Stock of Summit
("Summit Common") for 0.90 shares of the Common Stock of the Registrant ("UJB
Common"), with cash being paid in lieu of issuing fractional shares of UJB
Common; and (iii) the exchange of each outstanding share of the $25 stated value
Adjustable Rate Cumulative Preferred Stock of Summit for one share of a newly
created class of Preferred Stock of the surviving corporation in the Merger
designated the $25 stated value Adjustable Rate Cumulative Preferred Stock; all
upon the satisfaction of the terms and conditions set forth in the Agreement,
including the receipt of approval from the shareholders of both the Registrant
and Summit and the Board of Governors of the Federal Reserve System. No
assurance can be given that the Merger will be consummated.
In connection with the execution of the Agreement, Summit granted to the
Registrant an option to purchase, under certain circumstances, up to 19.9% of
the outstanding shares of Summit Common. Similarly, the Registrant granted
Summit an option to purchase, under certain circumstances, up to 19.9% of the
outstanding shares of UJB Common. The exercise prices of the options,
respectively $26.75 and $36.625, were arrived at by mutual agreement of the
parties.
On September 11, 1995 a news release ("News Release") announcing the
execution of the Agreement was issued by the Registrant. The News Release is
attached hereto as Exhibit 99(b) and is incorporated herein by reference.
On September 11, 1995, two separate meetings with respect to the Merger
(the "Meetings") were held by the Registrant, one with investment analysts and
one with print and broadcast media reporters. At the Meetings, certain financial
and other information was presented. The information and materials presented at
the meeting contained, among other things, information with respect to (i) deal
economics (earnings-per-share accretions in 1997; expense savings; internal rate
of return; one-time charges and estimated book value dilution); (ii) one-time
restructuring charges expected to be taken by the Registrant and Summit in
connection with the Merger; (iii) estimated expense reductions and (iv)
estimated pro forma earnings for 1996 and illustrative earnings for 1997 based
on the estimated 1996 earnings grown at 8.0%.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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(99)(a) Meeting materials illustrating: (i) deal economics (earnings-per-share
accretions in 1997; expense savings; internal rate of return; one-time
charges and estimated book value dilution); (ii) one-time restructuring
charges expected to be taken by the Registrant and Summit in connection
with the Merger; (iii)estimated expense reductions and (iv) estimated
pro forma earnings for 1996 and illustrative earnings for 1997 based
on the estimated 1996 earnings grown at 8.0%.
(99)(b) News Release dated September 11, 1995.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Date: September 13, 1995 UJB FINANCIAL CORP.
By: /s/ DENNIS A. WILLIAMS
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Dennis A. Williams
Senior Vice President
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EXHIBIT INDEX
Ex. No. Description
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(99)(a) Meeting materials illustrating: (i) deal economics (earnings-per-share
accretions in 1997; expense savings; internal rate of return; one-time
charges and estimated book value dilution); (ii) one-time restructuring
charges expected to be taken by the Registrant and Summit in connection
with the Merger; (iii) estimated expense reductions and (iv) estimated
pro forma earnings for 1996 and illustrative earnings for 1997 based on
the estimated 1996 earnings grown at 8.0%.
(99)(b) News Release dated September 11, 1995.
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Deal Economics
O 6% accretive to EPS in 1997
O Expense savings--$78 mm pre-tax annually, representing 48% of Summit's
expense base and 11% of combined non-interest expense
O 25 branch closures expected
O No revenue enhancements necessary for EPS accretion
O Internal rate of return--15%+
O One-time charges--$85 mm pre-tax, $54 mm after-tax
O Estimated book value dilution of 12%*, earned back through strong
EPS accretion
* Includes merger related charges.
UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO]
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One-Time Restructuring Charges
Real estate ................................. $37 MM
Personnel ................................... 24
Operations, integration and other ........... 24
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Total one-time charges ................ $85 MM
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After-tax impact ............................ $54 MM
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Per share impact ............................ $0.58
UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO]
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Estimated Expense Reductions
O Target: $78 MM total reduction by 1997, equal to 48% of Summit's expense
base and 11% of combined non-interest expense:
1996 1997
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Personal ....................... $25 MM $49 MM
Occupancy ...................... 4 8
Furniture & equipment .......... 2 4
Other cost savings ............. 8 17
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Total pre-tax .............. $39 MM $78 MM
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Total after-tax ............ $23 MM $46 MM
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UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO]
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Estimated Pro Forma Earnings
(dollars in millions, except per share amounts)
1995(a) 1997(b)
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Total Per Share Total Per Share
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Net income to common-stand-alone:
UJB Financial(c) ............. $196 $3.31 $214 $3.57
Summit(c) .................... 86 2.33 93 2.51
Adjustments:
Expense Reductions ........... 23 46
Revenue Enhancements ......... 0 0
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Pro Forma ................. $305 $3.30 $353 $3.79
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Accretion (Dilution) ......... (0.4%) 6.0%
Pro Forma Shares (MM) ........ 92.7 93.2
(a) 1996 earnings are estimated. Like all estimates of this type, there are
many factors, such as changes in economic conditions that are beyond our
control. These factors could effect actual results. As a result, there will
be differences between such estimates and the actual results, which could
be material. These estimates are necessarily speculative in nature and no
assurance can be given that these estimates will be realized. Excludes
one-time merger related charges.
(b) 1997 earnings are not estimated. Such earnings are presented for
illustrative purposes only and are based on 1996 earnings grown at 8.0%.
(c) Does not include benefit of any proposed reduction in FDIC insurance fees.
Estimated annualized benefits are $0.22 per share for UJB and $0.14 for
Summit.
UJB FINANCIAL [LOGO] SUMMIT BANK [LOGO]
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UJB Financial Corp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
609 987-3200
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UJB News Release
FINANCIAL
LOGO
For Release: Immediate
Contact at Summmit Bancorporation Contact at UJB Financial
Lori Friedman, VP C. Scott Rombach, SVP
Public Relations Corporate Communications
(201) 701-2638 (609) 987-3350
William S. Burns, SVP Kerry K. Calaiaro, SVP
Investor Relations Investor Relations
(201) 701-2581 (609) 987-3226
UJB Financial Corp. and Summit Bancorporation to Merge;
New Combined Company will have Strong Position In NJ, PA
PRINCETON, NEW JERSEY, September 11, 1995--UJB Financial Corp. (NYSE:UJB)
and The Summit Bancorporation (NASDAQ:SUBN) today announced a definitive
agreement to merge in a stock-for-stock exchange. Summit, headquartered in
Chatham, NJ, is a one-bank holding company with assets of $5.5 billion.
Under the terms of the merger agreement, which was approved yesterday by the
boards of directors of both banks, Summit shareholders will receive 0.90 shares
of UJB Financial common stock for each share of Summit common stock in a
tax-free exchange. The merger will be accounted for as a pooling-of-interests.
Based on the recent average closing price of UJB Financial common stock, the
transaction has a value of $31.95 per share for a total of $1.2 billion.
The new corporation, which will operate under the Summmit Bank Corp name, will
have $22 billion in assets, deposits of $17.6 billion and shareholders equity of
$1.7 billion. The merger will create New Jersey's second largest bank, with a
top three market share position in 13 of the state's 21 counties. The new Summit
will command the number one market share position in four of the nation's top 25
counties ranked by per capita income. The company will retain a strong presence
in eastern Pennsylvania.
T. Joseph Semrod, 58, UJB Financial's Chairman, will be Chairman and Chief
Executive Officer of the new organization. Robert G. Cox, 54, President and CEO
of Summit, will be President and will also join the board of directors. In
addition, five current directors of the Summit organization will also join the
board of the combined company.
"This strategic partnership has compelling benefits for us and is an important
part of our previous stated growth plan," Mr. Semrod said. ''It is a solid
blend of two common business cultures and
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philosophies and substantially enhances our market share in the ninth largest
banking market in the nation. We are poised at the threshold of some very
exciting business opportunities."
Mr. Cox said "Summit has built an impressive retail franchise in New Jersey,
while UJB Financial has scored successes by developing niche businesses, such as
lending to health care professionals and hospitals and has a strong asset based
lending activity. This transaction greatly enhances our business development
strategies. We are forming a strategic partnership that rewards shareholders and
offers customers a broader array of products and services."
With 2.9 million households in New Jersey, the new Summmit has a relationship
with 749,000 or 26 percent of these households.
"The prompt integration of Summit and UJB Financial will generate cost savings
that will offset the initial dilution to UJB Financial shareholders, and is
expected to add to earnings per share in 1997. The transaction will enable the
combined entity to achieve returns that neither company could realize on a stand
alone basis." Mr. Semrod added. "We remain dedicated to building shareholder
value."
The integration and cost-reduction process, which will be headed by Mr. Cox and
John G. Collins, UJB Financial Vice Chairman, will result in a projected pre-tax
cost savings of $78 million as duplicative systems and capacity are eliminated
and other merger synergies realized.
In addition to realizing substantial cost savings, Mr. Semrod noted, "This
acquisition offers UJB Financial solid opportunities for increased revenues from
expanded product offerings and cross selling. The combined company will offer
customers a broad array of products and services including private banking,
discount brokerage, leasing, proprietary mutual funds, international banking,
employee benefits, debit cards, automated teller machine transaction processing
and retail life insurance."
The transaction is expected to close in the first quarter of 1996, subject to
regulatory and shareholder approvals. UJB Financial expects to incur a one-time
restructuring charge of approximately $54 million after taxes.
Merrill Lynch & Co. is acting as UJB Financial's advisor, and Keefe, Bruyette &
Woods Inc. is Summit's. Both have provided fairness opinions in connection with
the transaction.
UJB Financial is a Princeton, NJ-based financial services company with $15.9
billion in assets. It operates 277 community banking offices and 277 ATMs
through United Jersey Bank and New Jersey Savings Bank in New Jersey and First
Valley Bank in Pennsylvania. The company provides financial services through its
major lines of business including commercial banking, retail banking, mortgage
banking and investment management. These core businesses and nine non-bank
subsidiaries, offer a full array of financial services to individuals,
businesses, non-profit organizations, government entities and other financial
institutions.
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Transaction Summary
TERMS
Name o Summit Bank Corp
Structure o Pooling-of-interests
o Tax-free exchange
o Definitive agreement signed
o Due diligence completed
Terms o Fixed exchange ratio of 0.90 shares of UJB
Financial common stock for each Summit share
o No walkaways
o Stock option agreements in place
Timing o Subject to normal regulatory and shareholder
approvals
o Targeted to close first quarter 1996
PRICING
Purchase price per share $31.95, based on UJB average of $35.50
Price to market 1.24x
Price to stated book 2.37x
Price to tangible book 2.42x
Price to 1996E consensus 13.9x
Summit shares outstanding 37.0 million*
Fixed exchange ratio 0.90:1
New shares issued 33.3 million
Indicated deal value $1.2 billion
* Includes pending acquisition of Garden State Bancshares, Inc.
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