UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K/A
AMENDMENT TO CURRENT REPORT
Filed Pursuant to Section 13 or 15(D) of
THE SECURITIES EXCHANGE ACT OF 1934
CRESTAR FINANCIAL CORPORATION
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
to Current Report on Form 8-K
Date of Report (Date of earliest event reported): December 31, 1996
The undersigned registrant hereby amends the
following items, financial statements, exhibits or
other portions of its Current Report on Form 8-K as
set forth in the pages attached hereto:
Item 2: Acquisition or Disposition of Assets
Item 7(a): Financial Statements of Business Acquired
Item 7(b): Pro Forma Financial Information
<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 31, 1996, Crestar Financial Corporation (Crestar) acquired
Citizens Bancorp (Citizens) in a transaction accounted for as a
pooling-of-interests business combination. Crestar issued approximately
25,279,000 common shares (post-split) for all of the outstanding common shares
of Citizens. The exchange ratio was 1.67 Crestar common shares (on a post -split
basis) for each Citizens common share outstanding on December 31, 1996.
Effective January 24, 1997, Crestar's common stock was split on a
two-for-one basis, through distribution of a 100% stock dividend. All common
share outstanding and per common share data for Crestar have been retroactively
adjusted to reflect the Crestar common stock split.
Citizens was a bank holding company based in Laurel, Maryland with 103
banking locations at December 31, 1996. At date of merger, Citizens had
approximately $4.1 billion in total assets, approximately $2.9 billion in
deposits and approximately $2.4 billion in loans. The assets of Citizens will
continue to be used in providing financial services to customers, primarily in
the Washington, D.C. metropolitan area.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The following documents filed by Citizens with the Securities and
Exchange Commission (SEC) are incorporated by reference in this Form 8-K/A: (i)
Citizens' Annual Report on Form 10-K for the year ended December 31, 1995; (ii)
Citizens' Quarterly Reports on Form 10-Q for the periods ended March 31, 1996,
June 30, 1996 and September 30, 1996; and (iii) Citizens' Current Report on form
8-K dated September 27, 1996.
The financial statements incorporated by reference include the
consolidated statements of financial condition of Citizens Bancorp and
Subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1995, and the report of Deloitte & Touche
LLP, independent auditors, dated January 19, 1996 thereon. Additional financial
statements incorporated by reference include the consolidated statements of
financial condition (unaudited) of Citizens Bancorp and Subsidiaries at
September 30, 1996 and consolidated statements of income (unaudited) for the
three month and nine month periods then ended.
(b) Pro Forma Financial Information
Pro forma condensed financial information regarding the merger of
Crestar and Citizens is included in Exhibit 99.1 of this filing.
(c) Exhibits
Exhibit 99.1: Pro forma condensed financial information related to the merger of
Crestar Financial Corporation and Citizens Bancorp.
Exhibit 99.2: Consent of Deloitte & Touche LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
CRESTAR FINANCIAL CORPORATION
Date: March 14, 1997 By: /s/ Linda F. Rigsby
---------------------
Linda F. Rigsby
Senior Vice President, Deputy General
Counsel and Secretary
EXHIBIT 99.1
PRO FORMA CONDENSED FINANCIAL INFORMATION
On December 31, 1996, Crestar Financial Corporation (Crestar) merged
with Citizens Bancorp (Citizens), a bank holding company based in Laurel,
Maryland, in a transaction accounted for as a pooling of interests. Based on an
exchange ratio of 1.67 shares (on a post-split basis) of Crestar common stock
for each outstanding share of Citizens common stock, Crestar issued 25,278,768
shares (on a post-split basis) of common stock.
The following Pro Forma Condensed Statement of Financial Condition
presented assumes that the merger was consummated on September 30, 1996, and the
Pro Forma Condensed Statements of Operations assume that the merger was
consummated at the beginning of each period presented. Effective January 24,
1997, Crestar's common stock was split on a two-for-one basis, through
distribution of a 100% stock dividend. All common share data for Crestar has
been retroactively adjusted to reflect the Crestar common stock split.
The pro forma earnings are not necessarily indicative of the results of
operations had the merger occurred at the beginning of each period presented,
nor are they necessarily indicative of the results of future operations.
<PAGE>
Pro Forma Condensed Statement of Financial Condition
September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Crestar &
Adjustments Citizens
increase pro forma
(Dollars in thousands) Crestar Citizens (decrease) combined
------- --------- ------------- -------------
<S> <C>
Assets
Cash and due from banks $810,669 $198,145 $ - $1,008,814
Securities held to maturity 69,849 1,000,859 1,070,708
Securities available for sale 3,520,740 545,425 4,066,165
Money market investments 742,036 - 742,036
Mortgage loans held for sale 909,633 - 909,633
Loans, net of unearned income 11,237,011 2,333,811 13,570,822
Less: Allowance for loan losses (235,747) (37,156) (272,903)
--------- -------- ---------
Loans - net 11,001,264 2,296,655 13,297,919
Premises and equipment, net 365,905 56,471 422,376
Intangible assets - net 183,784 863 184,647
Foreclosed properties - net 17,030 20,927 (4,000) (2) 33,957
Other assets 631,101 49,790 680,891
------- ------ ---------- -----------
Total Assets $18,252,011 $4,169,135 ($4,000) $22,417,146
----------- ---------- ---------- -----------
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand deposits $2,561,321 $654,507 $ - $3,215,828
Interest bearing deposits 11,023,253 2,371,189 13,394,442
---------- --------- ----------
Total deposits 13,584,574 3,025,696 16,610,270
Short-term borrowings 2,083,096 772,466 2,855,562
Other liabilities 482,915 16,389 28,531 (2) 527,835
Long-term debt 668,458 - 668,458
------- ----------- ------ -----------
Total Liabilities 16,819,043 3,814,551 28,531 20,662,125
Shareholders' Equity (1)
Preferred stock, authorized 2,000,000
shares, none issued - - - -
Common stock, $5 par value, authorized
200,000,000 shares; outstanding
84,699,026 actual shares and
109,970,466 pro forma combined shares 423,495 - 126,357 (3) 549,852
Common stock, $2.50 par value, authorized
125,000,000 shares; outstanding
15,132,599 shares - 37,832 (37,832) (3) -
Capital surplus 185,981 122,110 (88,525) (3) 219,566
Retained earnings 863,907 192,207 (32,531) (2) 1,023,583
Net unrealized loss on securities available
for sale (40,415) 2,435 - (37,980)
------- ----------- ------ -----------
Total Shareholders' Equity 1,432,968 354,584 (32,531) 1,755,021
----------- ---------- ---------- -----------
Total Liabilities and
Shareholders' Equity $18,252,011 $4,169,135 ($4,000) $22,417,146
=========== ========== ======== ===========
</TABLE>
See notes to Pro Forma Condensed Financial Information.
<PAGE>
Pro Forma Condensed Statement of Operations
Nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Crestar &
(Dollars in thousands, except per share data) Citizens
pro forma
Crestar Citizens combined (4)
-------- ----------- -------------
<S> <C>
Interest Income
Interest and fees on loans $750,027 $137,821 $887,848
Interest and dividends on securities 157,869 67,027 224,896
Other interest income 58,485 116 58,601
-------- -------- ---------
Total interest income 966,381 204,964 1,171,345
-------- -------- ---------
Interest Expense
Interest on deposits 297,162 74,142 371,304
Interest on short-term borrowings 87,529 25,561 113,090
Interest on long-term debt 37,426 - 37,426
-------- -------- ---------
Total interest expense 422,117 99,703 521,820
-------- -------- ---------
Net interest income
Net interest income 544,264 105,261 649,525
Provision for loan losses 65,970 5,790 71,760
-------- -------- ---------
Net interest income after provision
for loan losses 478,294 99,471 577,765
-------- -------- ---------
Noninterest income
Service charges on deposit accounts 68,908 15,682 84,590
Trust and investment advisory income 47,541 976 48,517
Securities gains 2,740 - 2,740
Other noninterest income 121,593 15,906 137,499
-------- -------- ---------
Total noninterest income 240,782 32,564 273,346
-------- -------- ---------
Noninterest expense
Personnel expense 259,272 45,800 305,072
Occupancy expense, net 36,666 10,358 47,024
Equipment expense 22,988 6,164 29,152
Other noninterest expense 183,501 20,707 204,208
-------- -------- ---------
Total noninterest expense 502,427 83,029 585,456
-------- -------- ---------
Net income
Income before income taxes 216,649 49,006 265,655
Income tax expense 67,690 17,860 85,550
-------- -------- ---------
Net income $148,959 $31,146 $180,105
======== ======== =========
Per common share data (1)
Net income per share:
Primary $1.72 $2.06 $1.61
======== ======== =========
Fully diluted $1.72 $2.06 $1.61
======== ======== =========
Weighted average shares outstanding:
Primary 86,564,000 15,114,000 111,805,000
========== ========== ===========
Fully diluted 86,652,000 15,114,000 111,894,000
========== ========== ===========
</TABLE>
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
Pro Forma Condensed Statement of Operations
Nine months ended September 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Crestar &
(Dollars in thousands, except per share data) Citizens
pro forma
Crestar Citizens combined (4)
--------- ---------- --------------
<S> <C>
Interest Income
Interest and fees on loans $756,320 $127,082 $883,402
Interest and dividends on securities 127,639 66,433 194,072
Other interest income 34,956 - 34,956
-------- --------- ---------
Total interest income 918,915 193,515 1,112,430
-------- --------- ---------
Interest Expense
Interest on deposits 298,624 65,355 363,979
Interest on short-term borrowings 72,417 25,300 97,717
Interest on long-term debt 37,849 - 37,849
-------- --------- ---------
Total interest expense 408,890 90,655 499,545
-------- --------- ---------
Net interest income
Net interest income 510,025 102,860 612,885
Provision for loan losses 38,268 5,120 43,388
-------- --------- ---------
Net interest income after provision
for loan losses 471,757 97,740 569,497
-------- --------- ---------
Noninterest income
Service charges on deposit accounts 67,236 15,031 82,267
Trust and investment advisory income 42,802 880 43,682
Securities gains (losses) (3,529) 133 (3,396)
Other noninterest income 107,832 12,687 120,519
-------- --------- ---------
Total noninterest income 214,341 28,731 243,072
-------- --------- ---------
Noninterest expense
Personnel expense 247,801 42,822 290,623
Occupancy expense, net 35,845 11,377 47,222
Equipment expense 23,422 5,563 28,985
Other noninterest expense 143,499 23,561 167,060
-------- --------- ---------
Total noninterest expense 450,567 83,323 533,890
-------- --------- ---------
Net income
Income before income taxes 235,531 43,148 278,679
Income tax expense 82,031 16,321 98,352
-------- --------- ---------
Net income $153,500 $26,827 $180,327
========== =========== ===========
Per common share data (1)
Net income per share:
Primary $1.76 $1.79 $1.60
========== =========== ===========
Fully diluted $1.75 $1.79 $1.60
========== =========== ===========
Weighted average shares outstanding:
Primary 87,405,000 14,992,000 112,441,000
========== =========== ===========
Fully diluted 87,611,000 14,992,000 112,648,000
========== =========== ===========
</TABLE>
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
Pro Forma Condensed Statement of Operations
For the year ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Crestar &
(Dollars in thousands, except per share data) Citizens
pro forma
Crestar Citizens combined (4)
----------- --------- ------------
<S> <C>
Interest Income
Interest and fees on loans $1,013,613 $171,594 $1,185,207
Interest and dividends on securities 174,155 88,378 262,533
Other interest income 48,347 - 48,347
-------- -------- ---------
Total interest income 1,236,115 259,972 1,496,087
-------- -------- ---------
Interest Expense
Interest on deposits 403,018 90,393 493,411
Interest on short-term borrowings 100,365 33,464 133,829
Interest on long-term debt 49,916 - 49,916
-------- -------- ---------
Total interest expense 553,299 123,857 677,156
-------- -------- ---------
Net interest income
Net interest income 682,816 136,115 818,931
Provision for loan losses 59,570 6,695 66,265
-------- -------- ---------
Net interest income after provision
for loan losses 623,246 129,420 752,666
-------- -------- ---------
Noninterest income
Service charges on deposit accounts 89,379 20,226 109,605
Trust and investment advisory income 60,645 1,152 61,797
Securities gains (losses) (2,213) 146 (2,067)
Other noninterest income 140,731 18,925 159,656
-------- -------- ---------
Total noninterest income 288,542 40,449 328,991
-------- -------- ---------
Noninterest expense
Personnel expense 340,440 57,149 397,589
Occupancy expense, net 48,650 14,199 62,849
Equipment expense 31,301 7,534 38,835
Other noninterest expense 199,043 32,882 231,925
-------- -------- ---------
Total noninterest expense 619,434 111,764 731,198
-------- -------- ---------
Net income
Income before income taxes 292,354 58,105 350,459
Income tax expense 112,557 22,015 134,572
-------- -------- ---------
Net income $179,797 $36,090 $215,887
========== ========== ===========
Per common share data (1)
Net income per share:
Primary $2.06 $2.40 $1.92
========== ========== ===========
Fully diluted $2.05 $2.40 $1.92
========== ========== ===========
Weighted average shares outstanding:
Primary 87,370,000 15,007,000 112,432,000
========== ========== ===========
Fully diluted 87,561,000 15,007,000 112,623,000
========== ========== ===========
</TABLE>
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
NOTES TO PRO FORMA CONDENSED FINANCIAL INFORMATION
(Unaudited)
(1) Effective January 24, 1997, Crestar's common stock was split on a
two-for-one basis, through distribution of a 100% stock dividend. All common
share outstanding and per common share data for Crestar have been retroactively
adjusted to reflect the Crestar common stock split.
(2) Certain material, non-recurring expenses totaling $32.5 million, on an
after-tax basis, were recorded in conjunction with the Merger on December 31,
1996. Pre-tax adjustments included $11.3 million for the settlement of
obligations under existing employment contracts, severance pay for involuntary
terminations, early retirement and related employee benefits; $18.2 million
associated with branch closings and related equipment disposals; professional
fees of $5.4 million; and $15.1 million of other expenses related to effecting
the merger. Other non-recurring adjustments included an increase in the reserve
for foreclosed properties of $4.0 million, reflecting Crestar's accelerated
disposition strategy with respect to specific foreclosed properties. The income
tax benefit associated with the above non-recurring expenses totaled $17.5
million. The impact of each of the adjustments has been reflected in the Pro
Forma Condensed Statement of Financial Condition as of September 30, 1996.
(3) Based on an exchange ratio of 1.67 (post-split basis) for conversion of
Citizens common stock into Crestar common stock (the actual exchange ratio for
the December 31, 1996 merger, on a post-split basis). At September 30, 1996,
Crestar had 84,699,026 shares outstanding (on a post-split basis), and Citizens
had 15,132,599 common shares outstanding.
(4) No pro forma adjustments are necessary in the Pro Forma Condensed Statement
of Operations.
Exhibit 99.2
Consent of Independent Auditors
The Board of Directors
Crestar Financial Corporation
We consent to incorporation by reference in the Form 8-K/A amendment of
current report of Crestar Financial Corporation of our report dated January 19,
1996, relating to the consolidated statements of financial condition of Citizens
Bancorp and Subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 1995. Our report refers to
changes in accounting for postretirement benefits, income taxes and investment
securities.
/s/ Deloitte & Touche LLP
Richmond, Virginia
March 14, 1997
