Securities and Exchange Commission
Washington, D.C. 20549
Schedule 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
FIRST BANKS AMERICA, INC.
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(Name of Subject Company)
FIRST BANKS AMERICA, INC.
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(Name of Person(s) Filing Statement)
Common Stock
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(Title of Class of Securities)
31928N-10-3
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(CUSIP Number of Class of Securities)
Allen H. Blake
Vice President and Chief Financial Officer
First Banks America, Inc.
11901 Olive Boulevard
Creve Coeur, Missouri 63141
(314) 692-6317
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(Name, Address and Telephone Number
of Person Authorized to Receive Notice
and Communication on Behalf of the Person(s) Filing Statement)
Copies to:
John S. Daniels
Attorney at Law
7502 Greenville Avenue, Suite 500
Dallas, Texas 75231
(214) 890-4002
<PAGE>
Item 1. Security and Subject Company.
The name of the subject company is First Banks America, Inc.,
a Delaware corporation ("FBA"), and the address of its principal
executive office is 135 North Meramec, St. Louis, Missouri 63105. This
statement relates to common stock, $.15 par value per share, of FBA
(the "Shares").
Item 2. Tender Offer of the Bidder.
This statement relates to the tender offer made by First
Banks, Inc., a Missouri corporation (the "Offeror"), as evidenced by a
Schedule 14D-1 filed by the Offeror on January 4, 1999. The address of
the Offeror's principal executive office is 135 North Meramec, St.
Louis, Missouri 63105.
Item 3. Identity and Background.
(a) This statement is filed by FBA, which has the business
address stated in Item 1.
(b) As of December 31, 1998, the total Shares and shares of
Class B Stock of FBA owned by the Offeror, including Shares issued on
December 1, 1998 upon conversion of a convertible debenture,
constituted approximately 76.84% of the outstanding voting stock of
FBA. The Offeror exercises control over the management and policies of
FBA and the election of its officers and directors.
In 1994, FBA sold 2,500,000 shares of Class B Stock for $30
million cash in a private placement to the Offeror. As a result, the
Offeror became the owner of a controlling interest in FBA, and the
Offeror has exercised control over the management and policies of FBA
and the election of FBA's Board of Directors which, as of the date
hereof, includes a majority of directors who are also directors,
executive officers and/or employees of the Offeror.
In February 1998, FBA acquired First Commercial Bancorp, Inc.,
Sacramento, California ("FCB"). In connection with the acquisition of
FCB, FBA issued approximately 1,555,700 Shares, of which 1,266,176
Shares were issued to the Offeror in exchange for its shares of FCB
common stock and $10.0 million of FBA's note payable to the Offeror.
FBA also issued to the Offeror a convertible debenture in the principal
amount of $6.5 million in exchange for outstanding debentures of FCB;
this debenture, including the related accrued and unpaid interest
thereon, was converted in December 1998 into 629,557 Shares.
The Offeror provides management services to FBA and its
subsidiary banks (the "Subsidiary Banks"). Management services are
provided under a management fee agreement whereby FBA compensates the
Offeror on an hourly basis for its use of personnel for various
functions including internal audit, loan review, income tax preparation
and assistance, accounting, asset/liability and investment services,
<PAGE>
loan servicing and other management and administrative services. Fees
paid under this agreement were $1.5 million for the nine months ended
September 30, 1998 and $1.4 million, $1.3 million and $521,000 for the
years ended December 31, 1997, 1996 and 1995, respectively. The fees
paid for management services are at least as favorable as FBA could
have obtained from unaffiliated third parties.
Because of the affiliation with the Offeror and the geographic
proximity of certain of their offices, FBA shares the cost of certain
personnel and services used by FBA and the Offeror. This includes the
salaries and benefits of certain loan and administrative personnel. The
allocation of the shared costs are charged and/or credited under the
terms of cost sharing agreements entered into during 1996. Because this
involves distributing essentially fixed costs over a larger asset base,
it allows each bank to receive the benefit of personnel and services at
a reduced cost. Fees paid under these agreements were $811,000 for the
nine months ended September 30, 1998 and $709,000 and $412,000 for the
years ended December 31, 1997 and 1996, respectively.
Effective April 1, 1997, First Services L.P., a limited
partnership indirectly owned by the Offeror's Chairman and his children
through its general partners and limited partners, began providing data
processing and various related services to FBA under the terms of data
processing agreements. Previously, these services were provided by a
subsidiary of the Offeror. Fees paid under these agreements were $1.3
million for the nine months ended September 30, 1998 and $1.0 million,
$692,000 and $374,000 for the years ended December 31, 1997, 1996 and
1995, respectively. The fees paid for data processing services are at
least as favorable as FBA could have been obtained from unaffiliated
third parties.
The Subsidiary Banks participate in loans with other bank
affiliates of the Offeror; as of September 30, 1998, $84.8 million of
purchased loan participations and $141.8 million of sold loan
participations were outstanding. Loans are purchased and sold at
prevailing interest rates and terms at the time of such transactions
and in accordance with the credit standards and policies of the
purchasing entity.
FBA borrows funds from the Offeror pursuant to a promissory
note agreement which provides for revolving advances up to $20 million.
The previous balance was repaid by FBA with the proceeds of a
securities offering in July 1998, and no advances have been made since
that repayment.
The Subsidiary Banks have had in the past, and may have in the
future, loan transactions in the ordinary course of business with
directors of FBA or their affiliates. These loan transactions have been
and will be on the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with
unaffiliated persons and did not and will not involve more than the
normal risk of collectibility or present other unfavorable features.
The Subsidiary Banks do not extend credit to officers of FBA or of the
Subsidiary Banks, except extensions of credit secured by mortgages on
personal residences, loans to purchase automobiles and personal credit
card accounts.
<PAGE>
Certain of the directors and officers of FBA and their
respective affiliates have deposit accounts with the Subsidiary Banks.
It is the policy of the Subsidiary Banks not to permit any officers or
directors of the Subsidiary Banks or their affiliates to overdraw their
respective deposit accounts unless that person has been previously
approved for overdraft protection under a plan whereby a credit limit
has been established in accordance with the standard credit criteria of
the Subsidiary Banks.
Item 4. The Solicitation or Recommendation.
(a) Neither FBA nor its Board of Directors makes any
recommendation to stockholders as to whether to tender or refrain from
tendering their Shares. Each stockholder must make the decision whether
to tender Shares and, if so, how many Shares and at what price or
prices Shares should be tendered.
(b) The Board of Directors of FBA concluded that the differing
circumstances of stockholders, including individual financial and
investment objectives and tax situations, makes it inadvisable to make
a recommendation for all FBA stockholders. Furthermore, the nature of
the Offer, which allows a stockholder to tender Shares at a price or
prices which he or she deems appropriate, will enable stockholders to
consider their individual circumstances in deciding whether to tender
Shares and, if so, in what quantity and at what price(s).
Item 5. Persons Retained, Employed or To Be Compensated.
None.
Item 6. Recent Transactions and Intent With Respect to Securities.
(a) Based upon the records of the Offeror and FBA and upon
information provided to the Offeror by officers and directors of the
Offeror and FBA, neither the Offeror, FBA, nor any executive officer or
director of either company, nor any associate or subsidiary of any of
them, effected any transaction in Shares during the past 60 days.
(b) FBA has not been informed whether the person(s) referred
to in Item 6(a) presently intend to tender Shares to the Offeror, sell
or hold Shares which are owned by such persons.
<PAGE>
Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) None.
(b) None.
Item 8. Additional Information To Be Furnished.
Not applicable.
Item 9. Material to be filed as Exhibits.
(a) None.
(b) None.
(c) None.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 19, 1999 FIRST BANKS AMERICA, INC.
/s/ Allen H Blake
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Allen H. Blake
Vice President and Chief Financial
Officer
