<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
(Amendment No. 1)
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 1, 1998
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FIRST EMPIRE STATE CORPORATION
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(Exact name of registrant as specified in its charter)
New York
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(State or other jurisdiction of incorporation)
1-9861 16-0968385
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(Commission File Number) (I.R.S. Employer Identification No.)
One M&T Plaza, Buffalo, New York 14240
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 842-5445
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(NOT APPLICABLE)
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(Former name or former address, if changed since last report)
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First Empire State Corporation ("First Empire") hereby amends the following
item of its Current Report on Form 8-K dated April 1, 1998, filed on April 10,
1998, as set forth below. The purpose of that Report was to disclose, pursuant
to Item 2, First Empire's acquisition of ONBANCorp, Inc. As permitted by
Sections (a)(4) and (b)(2) of the Instructions to Item 7, the Report omitted the
PRO FORMA financial information required by Item 7(b). The purpose of this
amendment is to file such PRO FORMA information.
Item 7. Financial Statements and Exhibits.
(a) The audited consolidated financial statements of ONBANCorp and its
subsidiaries as of December 31, 1997 and 1996 and for each of the years ended
December 31, 1997, 1996 and 1995, included in ONBANCorp's Annual Report on Form
10-K for the year ended December 31, 1997, are hereby incorporated by reference,
together with the report of KPMG Peat Marwick LLP, independent auditors, on such
financial statements.*
(b) An unaudited PRO FORMA Condensed Combined Balance Sheet of First
Empire as of December 31, 1997 and an unaudited PRO FORMA Condensed Combined
Statement of Income of First Empire for the year ended December 31, 1997 are
filed herewith as Exhibit 99.3. The unaudited PRO FORMA Condensed Combined
Balance Sheet assumes that the Merger was consummated on December 31, 1997.
Certain amounts in ONBANCorp's historical balance sheet as shown have been
reclassified to conform to First Empire's presentation. The unaudited PRO
FORMA Condensed Combined Statement of Income assumes that the Merger was
consummated on January 1, 1997 and reflects the consolidation of the results
of operations of First Empire and ONBANCorp for the year ended December 31,
1997. The cash portion of the consideration for the Merger is assumed to
have been funded by the liquidation of investment securities. As a result of
the Merger, First Empire expects to achieve substantial benefits, primarily
in the area of operating cost savings. Assuming that all cost savings
measures are implemented (which are expected to require a 12-month phase-in
period), First Empire estimates annual net operating cost savings of
approximately $31 million. First Empire's management estimates that savings
achieved during the first 12 months following the Merger would represent
approximately two-thirds of the fully phased-in savings. Management also
estimates that operating cost savings that may be realized during the first
12 months following the Merger will be largely offset by various one-time
expenses associated with systems conversions and other costs of integrating
and conforming the acquired operations with First Empire. The unaudited PRO
FORMA earnings, do not reflect any direct costs or potential savings which
are expected to result from the Merger and are not indicative of the results
of future operations. No assurances can be given with respect to the
ultimate level of cost savings to be realized or one-time expenses to be
incurred.
The unaudited PRO FORMA condensed financial information is not
necessarily indicative of the future financial position or future results of
operations of First Empire or of the financial position or the results of
operations of First Empire that would actually have occurred had the Merger
been in effect as of the date or for the period presented. In addition, this
Current Report on Form 8-K includes forward-looking statements that are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions ("Future Factors"). Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements. Future Factors include: expected cost savings
from the Merger that cannot be fully realized or that cannot be realized
within the expected time frame; revenues following the Merger that are lower
than expected; significant increases in competitive pressure among depository
institutions; greater than expected costs or difficulties related to the
integration of the business of First Empire and ONBANCorp; general economic
conditions, either nationally or in the markets in which First Empire will be
doing business, that are less favorable than expected; and legislative or
regulatory requirements or changes that adversely affect the business in
which First Empire is engaged. Future Factors also include changes in
interest rates, spreads on earning assets and interest-bearing liabilities,
and interest rate sensitivity; credit losses; sources of liquidity;
regulatory supervision and oversight, including required capital levels;
increasing price and product/service competition by competitors, including
new entrants; rapid technological developments and changes; the ability to
continue to introduce competitive new products and services on a timely,
cost-effective basis; the mix of products/services; containing costs and
expenses; governmental and public policy changes, including environmental
regulations; protection and validity of intellectual property rights;
reliance on large customers; technological, implementation and cost/financial
risks in large, multi-year contracts; the outcome of pending and future
litigation and governmental proceedings; continued availability of financing;
and financial resources in the amounts, at the times and on the terms
required to support the Company's future businesses. These are representative
of the Future Factors that could affect the outcome of the forward-looking
statements. First Empire's forward-looking statements speak only as of the
date on which such statements are made. By making any forward-looking
statements, First Empire assumes no duty to update them to reflect new,
changing or unanticipated events or circumstances.
(c) The following exhibits are filed herewith or incorporated by reference
herein as a part of this report:
EXHIBIT NO.
2.1 Agreement and Plan of Reorganization dated as of
October 28, 1997 by and among First Empire State
Corporation, Olympia
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<PAGE>
Financial Corp. and ONBANCorp, Inc. Incorporated by
reference to Exhibit No. 2 to the Current Report on
Form 8-K dated October 28, 1997 of First Empire State
Corporation (File No. 1-9861).*
2.2 Agreement and Plan of Merger, dated as of October 28,
1997, by and among First Empire State Corporation,
Olympia Financial Corp. and ONBANCorp, Inc.
Incorporated by reference to Exhibit No. 2 to the
Current Report on Form 8-K dated January 9, 1998 of
First Empire State Corporation (File No. 1-9861).*
23 Consent of KPMG Peat Marwick LLP, independent auditors
to ONBANCorp, Inc. Filed herewith.*
99.1 Press Release, dated April 1, 1998. Filed herewith.*
99.2 ONBANCorp, Inc. 1997 audited Financial Statements,
together with the Report of the Independent Auditors
thereon. Incorporated by reference to the Annual
Report on Form 10-K of ONBANCorp, Inc. for the year
ended December 31, 1997 (File No. 0-18011).*
99.3 First Empire State Corporation PRO FORMA Condensed
Combined Balance Sheet as of December 31, 1997
(unaudited) and First Empire State Corporation PRO
FORMA Condensed Combined Statement of Income for the
year ended December 31, 1997 (unaudited). Filed
herewith.
__________________________
*Previously incorporated by reference into or filed with the initial filing
of the Current Report on Form 8-K dated April 1, 1998 and filed on April 10,
1998.
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 EMPIRE STATE CORPORATION
Date: May 13, 1998 By: /s/ Michael P. Pinto
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Michael P. Pinto
Executive Vice President
and Chief Financial Officer
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<PAGE>
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Report Dated: April 1, 1998 Commission File Number: 1-9861
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FIRST EMPIRE STATE CORPORATION
(Exact name of registrant as specified in its charter)
EXHIBITS
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<PAGE>
EXHIBIT INDEX
Exhibit No. Page No.
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2.1 Agreement and Plan of Reorganization dated as of *
October 28, 1997 by and among First Empire State
Corporation, Olympia Financial Corp. and ONBANCorp,
Inc. Incorporated by reference to Exhibit No. 2 to the
Current Report on Form 8-K dated October 28, 1997
of First Empire State Corporation (File No. 1-9861).
2.2 Agreement and Plan of Merger, dated as of October 28, 1997, *
by and among First Empire State Corporation, Olympia
Financial Corp. and ONBANCorp, Inc. Incorporated by
reference to Exhibit No. 2 to the Current Report on Form
8-K dated January 9, 1998 of First Empire State Corporation
(File No. 1-9861).
23 Consent of KPMG Peat Marwick LLP, independent auditors to *
ONBANCorp, Inc. Filed herewith.
99.1 Press Release, dated April 1, 1998. Filed herewith. *
99.2 ONBANCorp, Inc. 1997 audited Financial Statements, together *
with the Report of the Independent Auditors thereon.
Incorporated by reference to the Annual Report on Form
10-K of ONBANCorp, Inc. for the year ended December 31,
1997 (File No. 0-18011).
99.3 First Empire State Corporation PRO FORMA Condensed Combined 7
Balance Sheet as of December 31, 1997 (unaudited) and
First Empire State Corporation PRO FORMA Condensed Combined
Statement of Income for the year ended December 31, 1997
(unaudited). Filed herewith.
______________________
*Previously incorporated by reference into or filed with the initial filing
of the Current Report on Form 8-K dated April 1, 1998 and filed on April 10,
1998.
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PRO FORMA CONDENSED COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
The following pro forma condensed combined unaudited balance sheet gives
effect to the acquisition by First Empire State Corporation ("First Empire")
of ONBANCorp, Inc. and subsidiaries ("ONBANCorp") using the purchase method
of accounting assuming the acquisition was consummated on December 31, 1997.
ONBANCorp was acquired by First Empire on April 1, 1998.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
PRO FORMA
FIRST EMPIRE ONBANCORP ADJUSTMENTS PRO FORMA
------------ --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 333,805 128,647 $ 462,452
Money-market assets 111,046 11,222 122,268
Investment securities 1,725,218 2,016,633 (266,307) (1) 3,497,101
21,557 (2)
Loans and leases 11,765,533 3,015,437 35,004 (3) 14,815,974
Unearned discount (268,965) (17,769) (7,249) (3) (293,983)
Allowance for possible credit losses (274,656) (39,064) (313,720)
----------- --------- -------- -----------
Loans and leases, net 11,221,912 2,958,604 27,755 14,208,271
----------- --------- -------- -----------
Premises and equipment 121,984 65,450 (13,255) (4) 174,179
Goodwill and deposit premium 17,288 13,892 547,331 (10) 578,511
Accrued interest and other assets 471,682 125,122 16,460 (5) 589,656
(23,608) (6)
----------- --------- -------- -----------
Total assets $14,002,935 5,319,570 309,933 $19,632,438
=========== ========= ======== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits $ 9,704,917 3,643,007 6,686 (7) $13,354,610
Short-term borrowings 1,050,918 599,902 571 (8) 1,651,391
Long-term borrowings 427,819 283,148 10,941 (8) 721,908
----------- --------- -------- -----------
Interest-bearing liabilities 11,183,654 4,526,057 18,198 15,727,909
----------- --------- -------- -----------
Noninterest-bearing deposits 1,458,241 380,099 1,838,340
Other liabilities 330,774 78,217 19,689 (6) 428,680
----------- --------- -------- -----------
Total liabilities 12,972,669 4,984,373 37,887 17,994,929
----------- --------- -------- -----------
Common equity 1,030,266 335,197 272,046 (9) 1,637,509
----------- --------- -------- -----------
Total stockholders' equity 1,030,266 335,197 272,046 1,637,509
----------- --------- -------- -----------
Total liabilities & stockholders' equity $14,002,935 5,319,570 309,933 $19,632,438
=========== ========= ======== ===========
</TABLE>
See notes to pro forma condensed combined financial information.
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PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
The following pro forma condensed combined statement of income for the year
ended December 31, 1997 gives effect to First Empire's acquisition of
ONBANCorp using the purchase method of accounting assuming the acquisition
was consummated on January 1, 1997. ONBANCorp was acquired by First
Empire on April 1, 1998.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
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PRO FORMA
FIRST EMPIRE ONBANCORP ADJUSTMENTS PRO FORMA
------------ --------- ----------- ---------
<S> <C> <C> <C> <C>
Interest income
Loans and leases, including fees $ 952,436 224,900 (5,990) (11) $1,171,346
Money-market assets 7,245 1,864 9,109
Investment securities 105,280 158,926 (17,443) (12) 238,151
(8,612) (13)
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Total interest income 1,064,961 385,690 (32,045) 1,418,606
---------- ------- ------- ----------
Interest expense
Deposits 434,133 170,837 (6,432) (14) 598,538
Short-term borrowings 44,341 38,303 (497) (15) 82,147
Long-term borrowings 29,619 25,535 (880) (16) 54,274
---------- ------- -------- ----------
Total interest expense 508,093 234,675 (7,809) 734,959
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Net interest income 556,868 151,015 (24,236) 683,647
Provision for possible credit losses 46,000 7,168 53,168
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Net interest income after provision for
possible credit losses 510,868 143,847 (24,236) 630,479
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Other income
Mortgage banking revenues 51,547 5,016 56,563
Service charges on deposit accounts 43,377 11,283 54,660
Trust income 30,688 3,617 34,305
Merchant discount and other credit card
fees 19,395 2,804 22,199
Gain (loss) on sales of bank investment
securities (280) 10,360 10,080
Other revenues from operations 48,340 9,199 57,539
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Total other income 193,067 42,279 235,346
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Other expense
Salaries and employee benefits 220,017 41,027 261,044
Equipment and net occupancy 53,299 18,440 (428) (17) 71,311
Printing, postage and supplies 13,747 3,666 17,413
Deposit insurance 1,935 1,058 2,993
Outside data processing 7,153 11,285 18,438
Amortization of goodwill and deposit
premium 7,291 4,287 31,869 (18) 43,447
Other costs of operations 118,334 26,143 4,246 (19) 148,723
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Total other expense 421,776 105,906 35,687 563,369
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Income before income taxes 282,159 80,220 (59,923) 302,456
Income taxes 105,918 29,042 (15,998) (20) 118,962
---------- ------- -------- ----------
Net income $ 176,241 51,178 (43,925) $ 183,494
========== ======= ======== ==========
Net income per common share (21)
Basic $26.60 3.93 $22.78
Diluted $25.26 3.88 $21.77
Average common shares outstanding (21)
Basic 6,625 13,024 8,055
Diluted 6,977 13,181 8,429
</TABLE>
See notes to pro forma condensed combined financial information.
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<PAGE>
NOTES TO PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION (Unaudited)
(1) The unaudited pro forma condensed combined financial information
assumes the cash portion of the purchase price of $266,307 is
provided by liquidation of investment securities.
(2) Adjustment to record acquired investment securities at estimated
market value.
(3) Adjustments to record acquired loans and leases at estimated
market value.
(4) Adjustment to record acquired premises and equipment at estimated
market value. The adjustment includes writedowns associated with
duplicate owned property and leasehold interests of ONBANCorp to be
disposed of.
(5) Adjustments of $9,221 to record acquired mortgage servicing rights at
estimated market value and $7,239 to record pension plan assets of
ONBANCorp in excess of projected benefit obligation.
(6) Adjustments to other assets and other liabilities of $23,608 and
$19,689, respectively, to record fees for investment bankers and
other professional services associated with the transaction,
severance benefits associated with the elimination of employment
positions at ONBANCorp, estimated net deferred income tax credits
associated with adjustments to fair value of net assets acquired, and
other miscellaneous adjustments.
(7) Adjustment to record interest-bearing deposits of ONBANCorp at
estimated market value.
(8) Adjustments to record borrowings (including trust preferred capital
securities) of ONBANCorp at estimated market value.
(9) Reflects issuance of First Empire common stock of $587,819, estimated
market value of ONBANCorp stock options converted to First Empire
stock options of $19,424 and reduction for elimination of ONBANCorp's
December 31, 1997 equity of $335,197.
(10) Represents core deposit premium of $61,371 and additional goodwill
of $485,960.
<PAGE>
NOTES TO PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION (Unaudited)
(Continued)
(11) Amortization of premium related to loans and leases using
accelerated methods based on the estimated weighted-average
maturities of the loans and leases.
(12) Reduction in interest income from investment securities assumed to
be liquidated to fund the cash component of the merger consideration
assuming an interest rate of 6.55%.
(13) Amortization of premium related to investment securities assumed to
be retained using an accelerated method over the estimated
weighted-average remaining term to maturity of the securities.
(14) Amortization of mark-to-market adjustment to deposits using an
effective yield method over the remaining terms to maturity of the
deposits.
(15) Amortization of mark-to-market adjustment to short-term borrowings
on a straight-line basis over the remaining terms to maturity of the
borrowings.
(16) Amortization of mark-to-market adjustment to long-term borrowings
on a straight-line basis over the remaining terms to maturity of the
borrowings.
(17) Amortization of mark-to-market adjustment on premises and
equipment on a straight-line basis over the estimated useful lives
of the assets.
(18) Amortization on an accelerated basis of the core deposit premium and
on a straight-line basis for goodwill:
<TABLE>
<CAPTION>
ESTIMATED LIFE AMOUNT
-------------- ------
(In years) (In thousands)
<S> <C> <C>
Core deposit premium 10 11,158
Goodwill 20 20,715
------
Total amortization 31,869
</TABLE>
(19) Amortization on an accelerated basis of the mark-to-market adjustment
on mortgage servicing rights and other miscellaneous adjustments.
(20) Income tax expense on pro forma adjustments is reflected using an
expected tax rate of 40.8%.
(21) The pro forma earnings per share include the effect of the
adjustments described above and the issuance 1,429,998 shares of
First Empire common stock. The calculation of pro forma diluted
earnings per share also includes the dilutive effect of ONBANCorp
stock options converted to First Empire stock options by application
of the "treasury stock method" of accounting.
