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): April 9, 2000
FIRST SECURITY CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-6906 87-6118148
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
79 South Main, P.O. Box 30006 84130-0006
Salt Lake City, Utah (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (801) 246-5976
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
First Security Corporation, a Delaware corporation ("FSCO"), and
Wells Fargo & Company, a Delaware corporation ("WFC"), have entered into an
Agreement and Plan of Reorganization, dated as of April 9, 2000 (including all
exhibits attached thereto, the "Merger Agreement"). The Merger Agreement
provides for the merger of FSCO with and into a wholly-owned subsidiary of WFC
(the "Merger"). A copy of a press release released jointly by FSCO and WFC
describing the Merger is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
The exhibit to this current report on Form 8-K contains forward-looking
statements about the financial condition, results of operations and business of
WFC and FSCO and, assuming the consummation of the Merger, on the combined
company. These include statements about: (a) the anticipated closing date of the
Merger; (b) the cost savings and accretion to reported earnings that will be
realized from the Merger; (c) the restructuring charges expected to be incurred
in connection with the Merger; (d) the accounting method WFC expects to use to
account for the Merger; (e) the business opportunities and strategies expected
for WFC and FSCO after the Merger; and (f) other statements that include the
words "believes," "expects," "anticipates," "intends," "estimates," "should" or
similar expressions.
These forward-looking statements involve risks and uncertainties. Factors
that could cause actual conditions, events or results to differ significantly
from those described in the forward-looking statements include, among other
things: (a) expected cost savings from the Merger cannot be fully realized or
realized within the expected time; (b) revenues following the Merger are lower
than expected; (c) costs or difficulties, including divestitures, related to the
integration of the businesses of WFC and FSCO are greater than expected; and (d)
the Merger is accounted for as a purchase instead of a pooling of interests.
Such forward-looking statements speak only as of the date on which such
statements were made, and neither FSCO nor WFC undertakes any obligation to
update any forward-looking statement to reflect events or circumstances after
the date on which any statement is made to reflect the occurrence of
unanticipated events.
Item 7. Financial Statement and Exhibits
(c) Exhibits
99.1 Joint Press Release issued by FSCO and WFC, dated
April 10, 2000
-2-
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SIGNATURES
Pursuant to 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.
FIRST SECURITY CORPORATION
By: /s/ Brad D. Hardy
------------------------------------------
Name: Brad D. Hardy
Title: Executive Vice President Corporate
Services, General Counsel, Chief Financial
Officer and Secretary
Dated: April 10, 2000
Wells Fargo & Company and First Security Corporation Agree to Merge
SAN FRANCISCO and Salt Lake City, April 10 /PRNewswire/ -- Wells Fargo &
Company (NYSE: WFC) and First Security Corporation (Nasdaq: FSCO) said today
they have signed a definitive agreement for the merger of Wells Fargo and First
Security. The combined company will be the largest banking franchise in deposits
in Utah, Nevada, New Mexico, and Idaho, which comprise the nation's fastest
growing regional economy.
First Security, based in Salt Lake City, at year-end 1999 had $23 billion
in assets, 333 banking locations (including 45 in-store locations), 535 ATMs,
and 9,600 employees. The company owns Utah's largest bank, is the second largest
independent bank holding company in the western United States and the nation's
oldest multi-state bank holding company, founded in June 1928. Among its
subsidiaries are CrossLand Mortgage, which has 135 offices in 28 states and
originated $14.5 billion in mortgages last year, and FS Van Kasper, a full
service investment banking and brokerage business with 12 regional offices.
Under terms of the agreement, approved by the boards of both companies,
First Security stockholders will receive 0.355 of a share of Wells Fargo common
stock in exchange for each share of First Security common stock.
The transaction is expected to be completed in the second half of this
year. It is expected to be accounted for as a pooling of interests and requires
approval from banking regulators and First Security shareholders. The
transaction is expected to be tax-free for First Security stockholders.
In addition, First Security has granted to Wells Fargo an option
exercisable, in whole or in part, under certain circumstances to purchase
authorized but unissued shares of First Security common stock equal to 19.9
percent of First Security's shares currently outstanding.
The transaction, based on Wells Fargo's closing stock price of $43.6875 on
April 3, 2000, values each First Security share at $15.50 for a total
transaction value of approximately $3.2 billion. First Security has
approximately 206 million diluted shares. The transaction exceeds Wells Fargo's
internal rate of return goals and is expected to add to Wells Fargo's earnings
per share in the second year of operations. For the integration of the two
companies, Wells Fargo expects to incur merger and integration charges of
approximately $375 million.
"After careful consideration of our alternatives, we believe it's in the
long-term best interests of our employees, customers, communities and
stockholders that First Security partner with an outstanding organization whose
vision, values and history are very similar to ours," said Spencer F. Eccles,
First Security's chairman and CEO. "Like First Security, Wells Fargo is
committed to its employees, has a reputation for outstanding customer service
and local decision-making, and is committed to being an outstanding corporate
citizen.
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"This combination will provide our customers with more convenience than
ever before across virtually all of the midwestern and western United States. It
also will provide our stockholders with an investment in a highly-regarded
company with significant growth potential." Eccles is expected to be elected to
the Wells Fargo board of directors.
"First Security and its outstanding team of people have earned a
reputation as one of the best banking franchises in the western United States
because they put customers and communities first," said Dick Kovacevich, Wells
Fargo's president and CEO. "The customers and cultures of our two companies are
remarkably similar. Both companies compete not just in banking but in the far
larger, faster growing industry called financial services. First Security and
Wells Fargo also share a commitment to people as a competitive advantage,
outstanding customer service, local decision-making and community involvement.
We look forward to combining our resources so we can satisfy all the financial
needs of First Security's customers -- individuals, small businesses, middle
market businesses, farmers and ranchers, and large corporate customers -- and
help them succeed financially. Together, we want to be known as the premier
provider of financial services in every single one of our communities across our
combined banking franchise, soon to be 23 states."
To receive federal regulatory approval and comply with government
anti-trust guidelines, Wells Fargo and First Security expect to sell about $1.2
billion of deposits and associated loans. First Security expects to release its
first quarter 2000 earnings on April 19, 2000. First Security's earnings will
reflect special charges incurred for its termination of the merger agreement
with Zions Bancorporation.
First Security has banking operations in seven states: Utah (138
locations), Idaho (87), New Mexico (45), Nevada (23), California (15), Oregon
(14), and Wyoming (8).
Wells Fargo has banking operations in 22 states: Arizona (312 banking
stores), California (1,006), Colorado (116), Idaho (17), Illinois (8), Indiana
(43), Iowa (43), Michigan (34), Minnesota (163), Montana (41), Nebraska (30),
Nevada (116), New Mexico (93), North Dakota (26), Ohio (1), Oregon (126), South
Dakota (51), Texas (430), Utah (24), Washington (136), Wisconsin (60), and
Wyoming (9). By the end of this quarter, Wells Fargo is scheduled to enter its
23rd banking state with the acquisition of National Bancorp of Alaska which has
$3 billion in assets and 54 banking locations.
Wells Fargo is a $218 billion diversified financial services company
providing banking, insurance, investments, mortgage and consumer finance from
more than 5,300 financial services stores and the Internet (wellsfargo.com)
across North America and elsewhere internationally.
This news release has forward-looking statements about the financial
condition, results of operations and business of Wells Fargo on a pro forma
basis assuming completion of the proposed merger transaction with First
Security. These include statements about: (a) the anticipated closing date of
the merger; (b) the expected effect of the merger on Wells Fargo's future
earnings per share; (c) the expenses expected to be incurred by Wells Fargo to
integrate the two companies; (d) the accounting method Wells Fargo is expected
to use to account for
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the merger; (e) the business opportunities and strategies expected for Wells
Fargo and First Security after the merger; and (f) other statements that include
the words "believes," "expects," "anticipates," "intends," "estimates," "should"
or similar expressions.
These forward-looking statements involve risks and uncertainties. Factors
that could cause actual conditions, events or results to differ significantly
from those described in the forward-looking statements include, among other
things: (a) expected cost savings from the merger cannot be fully realized or
realized within the expected time; (b) revenues following the merger are lower
than expected; (c) costs or difficulties related to the integration of the
businesses of Wells Fargo and First Security are greater than expected; and (d)
the merger is accounted for as a purchase instead of a pooling of interests.
Wells Fargo's reports filed with the SEC, including Wells Fargo's Form
10-K for the year ended December 31, 1999, describe more factors that could
cause actual conditions, events or results to differ significantly from those
described in the forward-looking statements, including certain credit, market,
operational, liquidity and interest rate risks associated with Wells Fargo's
business and operations. Other factors described in Wells Fargo's December 31,
1999 Form 10-K include changes in business and economic conditions, competition,
fiscal and monetary policies, customers choosing not to use banks for
transactions, legislation, the combination of the former Norwest Corporation and
the former Wells Fargo & Company, and other acquisitions by Wells Fargo.
This news release may be deemed to be solicitation material in respect of
the proposed acquisition of First Security by Wells Fargo through the merger of
a wholly-owned subsidiary of Wells Fargo with and into First Security, pursuant
to an Agreement and Plan of Reorganization, dated as of April 9, 2000, by and
between First Security and Wells Fargo (including all exhibits attached thereto,
the "Agreement"). This filing is being made in connection with Regulation of
Takeovers and Security Holder Communications (Release No. 33-7760, 34-42055)
promulgated by the Securities and Exchange Commission (SEC). First Security and
its directors and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the transactions contemplated by the
Agreement. These directors and executive officers include the following:
Spencer F. Eccles, Morgan J. Evans, L. Scott Nelson, J. Pat McMurray, Brad D.
Hardy, Scott C. Ulbrich, Michael P. Caughlin, Mark D. Howell and David R.
Golden.
Of these directors and executive officers, Spencer F. Eccles may be deemed
a beneficial owner of approximately 6,999,381 million shares of First Security's
common stock (constituting approximately 3.3% of the outstanding common stock).
None of the other persons listed above owns more than 1% of the outstanding
shares of First Security's common stock. The ownership information is as of
December 31, 1999. In addition, in connection with the merger, each of Spencer
F. Eccles, Morgan J. Evans, L. Scott Nelson, J. Pat McMurray, Brad D. Hardy,
Scott C. Ulbrich, Michael P. Caughlin, Mark D. Howell and David R. Golden has
entered into an employment agreement that provides for payments in connection
with continued employment after certain business combinations, including the
merger.
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In connection with the proposed merger, Wells Fargo will file a
registration statement on Form S-4 with the SEC. Stockholders of First Security
are encouraged to read the registration statement, including the proxy
statement-prospectus that will be part of the registration statement, because it
will contain important information about the merger. After the registration
statement is filed with the SEC, it will be available for free, both on the
SEC's web site (www.sec.gov) and from First Security's and Wells Fargo's
corporate secretaries.
SOURCE Wells Fargo & Company; First Security Corporation
CONTACT: media, Larry Haeg, 415-396-3070, or investors, Robert S. Strickland,
415-396-0523, both of Wells Fargo & Company; or investors, Brad Hardy,
801-246-5976, or Scott Ulbrich, 801-246-5706, both of First Security
Corporation.
