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Filed Pursuant to Rule 425
Filer: Bingham Financial Services Corporation
Subject Company: Bingham Financial Services Corporation
Commission File No.: 0-23381
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
REGARDING THE BUSINESS COMBINATION TRANSACTION REFERENCED IN THE FOLLOWING
INFORMATION, WHEN IT BECOMES AVAILABLE, WHICH WILL BE INCLUDED IN A REGISTRATION
STATEMENT ON FORM S-4 TO BE FILED BY THE ULTIMATE PARENT COMPANY IN THE BUSINESS
COMBINATION TRANSACTION WITH THE SECURITIES AND EXCHANGE COMMISSION BECAUSE IT
WILL CONTAIN IMPORTANT INFORMATION. AFTER IT IS FILED WITH THE SEC, INVESTORS
AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE PROXY STATEMENT/PROSPECTUS ON
THE SEC'S WEB SITE (WWW.SEC.GOV). THE PROXY STATEMENT/PROSPECTUS WILL ALSO BE
MADE AVAILABLE FOR FREE TO THE STOCKHOLDERS OF BINGHAM FINANCIAL SERVICES
CORPORATION AND FRANKLIN BANK, N.A.
BINGHAM AND ITS DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER MEMBERS OF
MANAGEMENT AND EMPLOYEES MAY BE SOLICITING PROXIES FROM BINGHAM STOCKHOLDERS IN
FAVOR OF THE MERGER. FRANKLIN AND ITS DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN
OTHER MEMBERS OF MANAGEMENT AND EMPLOYEES MAY BE SOLICITING PROXIES FROM
FRANKLIN STOCKHOLDERS IN FAVOR OF THE MERGER. INFORMATION CONCERNING THE
PARTICIPANTS IN THE PROXY SOLICITATION WILL BE SET FORTH IN THE PROXY STATEMENT
PROSPECTUS WHEN IT IS FILED WITH THE SEC.
MEDIA CONTACT: WALTER KRAFT
CAPONIGRO PUBLIC RELATIONS
INC., (248) 355-3200
[email protected]
FOR IMMEDIATE RELEASE
March 20, 2000
FRANKLIN BANK AND BINGHAM FINANCIAL
SERVICES ANNOUNCE STRATEGIC MERGER
AND APPOINTMENT OF NEW FRANKLIN CEO
SOUTHFIELD and BIRMINGHAM, Mich. -- Franklin Bank, N.A. (NASD: FSVB)
and Bingham Financial Services Corporation (NASD: BFSC) announced today that
they
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have signed an agreement to merge. The strategic merger creates a
multi-faceted financial organization centered on a strong niche banking presence
in Southeast Michigan with a national reach, specialty lending capability. The
combination is positioned to unlock the value of Franklin Bank's proven ability
to generate customer deposits coupled with Bingham's broad-based loan
origination platform.
Bingham will operate as the holding company. Franklin, a Southeast
Michigan-based bank with approximately $500 million in assets in 1999, will
continue to operate as the principal subsidiary of the holding company.
Bingham's current operating subsidiaries, Bloomfield Acceptance, Hartger &
Willard, Dynex and Bloomfield Servicing will continue as separate companies
either within the bank or as subsidiaries of Bingham. Bloomfield Acceptance and
Hartger & Willard currently operate a Michigan-based national commercial
mortgage lending organization with new loans of more than $350 million during
1999. Dynex, acquired in December 1999, and Bingham's Manufactured Home Finance
Corporation subsidiary, together accounted for approximately $500 million of
manufactured housing loans originated during 1999. MHFC's business and
operations recently were combined into Dynex and MHFC was sold. Bloomfield
Servicing, a primary loan servicer, currently services $2.2 billion of loans
originated by Bingham subsidiaries.
Under the merger agreement, Bingham will issue 1.525 shares of its common stock
for each outstanding share of Franklin Bank. The merger has been approved by
both Boards, is structured to be tax-free to both companies' stockholders and
will be accounted for by the purchase method of accounting. Closing is expected
sometime in the third quarter of 2000 subject to stockholder approval,
regulatory approval and satisfaction of customary closing conditions. The
combined entities will be owned 68 percent by Franklin's current stockholders
and 32 percent by Bingham's current stockholders. The Board of Directors of the
holding company will include six directors from Bingham and six directors from
Franklin -- including the bank's newly appointed CEO.
Gary A. Shiffman, Chairman, and Ronald A. Klein, CEO and President, of Bingham,
will retain these titles in the holding company. David F. Simon will continue to
serve as Chairman of Franklin Bank and will become an Executive Vice President
of the holding company. Simultaneous with the transaction, the companies
announced the appointment of Joseph G. Horonzy as the new CEO of Franklin,
effective upon the consummation of the strategic merger. The Franklin Bank board
will be reconstituted with the addition of directors to be named by Bingham.
Gary Shiffman, Bingham Financial Chairman stated, "The incentive for this merger
is found in our companies' complementary business strategies and corporate
philosophies. Today Bingham, through its operating subsidiaries, is one of the
leading commercial mortgage banking operations in Michigan and plays a large
role in affordable housing, one of the fastest growing areas of the real estate
industry. Bingham has been successful in integrating its acquisitions, managing
its rapid growth, generating quality assets, and accessing the capital markets.
Now, with the integration
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of Franklin's stable source of deposits, the combined entities will be
positioned to maximize profitability. We view our new banking services company
as a leading example of where bank organizations need to migrate in today's
economy."
David Simon, Chairman of Franklin Bank, said, "We see this new business
combination as a means to provide an opportunity for Franklin to add to its
management depth, increase its capital base, grow and diversify its revenue mix,
expand its loan origination capabilities, create new branches and, most
importantly, enhance shareholder value. This strategic merger enables us to
build upon the existing leadership of the Bank's President Rebecca David and
other senior management team members. It also allows us to continue our
tradition of service oriented customer focus that has fueled Franklin's historic
success meeting the needs of small and medium sized businesses who have become
disenfranchised by Southeastern Michigan's mega-banks."
Joe Horonzy, the new CEO of Franklin, has 31 years experience in finance and
banking. Horonzy said, "I am excited by this opportunity and enthusiastic about
this new company's potential." Horonzy previously held top-level positions at
Comerica Bank, where he was Executive Vice President of Corporate Banking and
Retail Banking and a key member of that bank's senior management committee. He
is now at Plante & Moran, LLP, as a consultant advising local businesses in the
development of strategic plans and methods to optimize their financing
arrangements. "Franklin has successfully carved out a position as the bank for
local business. Bingham, with its strategic focus on creating a national
commercial and residential real estate lending platform and its successful
integration of its operating subsidiaries has developed a powerful asset
generation capability. Successfully harnessing Franklin's strong deposit base
and Bingham's loan portfolio and nationwide origination form the foundation for
a significant emerging banking organization."
This release contains certain forward-looking statements which are based on
management's current expectations. These forward-looking statements include
information concerning possible or assumed future results of operations and
business plans, including those relating to earnings growth (on both a GAAP and
cash basis); revenue growth; origination volume in both The Companies' mortgage
and manufactured housing finance businesses; tangible capital generation; market
share; expense levels; and other business operations and strategies. For these
statements, The Companies' claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995 to the extent provided by applicable law. Forward-looking statements
involve inherent risks and uncertainties. We caution you that a number of
important factors could cause actual results to differ materially from those
contained in any forward-looking statement. Such factors include, but are not
limited to: risks and uncertainties related to acquisitions and related
integration activities; prevailing economic conditions; changes in interest
rates, loan demand, real estate values, and competition, which can materially
affect origination levels in The Companies' mortgage and manufactured housing
finance businesses; the level of defaults and prepayments on loans made by The
Companies and each of its affiliates; changes in accounting principles,
policies, and guidelines; adverse changes or
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conditions in capital or financial markets which could adversely affect the
ability of The Companies to sell or securitize mortgage and manufactured housing
originations on a timely basis or at prices which are acceptable to The
Companies; changes in applicable law, rule, regulation or practice with respect
to tax or legal issues; and other economic, competitive, governmental,
regulatory, and technological factors affecting The Companies' operations,
pricing, products, and services. The forward-looking statements are made as of
the date of this release, and The Companies assume no obligation to update the
forward-looking statements or to update the reasons why actual results could
differ from those projected in the forward-looking statements.
