<PAGE> 1
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): March 5, 1997
FIRST MARYLAND BANCORP
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction of incorporation or organization)
1-7273 52-0981378
(Commission File Number) (I.R.S. Employer Identification No.)
25 S. CHARLES STREET
BALTIMORE, MARYLAND 21201
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:(410) 244-4000
NOT APPLICABLE
(Former name or former address, if changed since last report)
------------------------------
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ITEM 5. OTHER EVENTS
As set forth in its Current Reports on Form 8-K dated January 21, 1997,
and February 3, 1997, on January 21, 1997, First Maryland Bancorp (the
"Company"), its parent, Allied Irish Banks, p.l.c. ("AIB"), and Dauphin Deposit
Corporation ("Dauphin") entered into a definitive Agreement and Plan of Merger
(the "Merger Agreement") pursuant to which, among other things, Dauphin will
merge with and into the Company. Filed as a part of this Current Report on Form
8-K are certain unaudited proforma consolidated, condensed financial statements
to reflect the merger of Dauphin into the Company on a purchase accounting
basis, which financial statements are incorporated herein by reference. Dauphin
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended (Commission file no. 0-8415)
ITEM 7. EXHIBITS
(c) Exhibits
99.1 Unaudited proforma consolidated statement of condition as of
September 30, 1996, and unaudited proforma consolidated
statements of income for the year ended December 31, 1995
and the nine months ended September 30, 1996; and notes to
unaudited consolidated proforma financial statements.
<PAGE> 3
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 thereunto duly authorized.
Date: March 5, 1997 FIRST MARYLAND BANCORP
By: JEROME W. EVANS
----------------------------------------
Jerome W. Evans, Executive
Vice President
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EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
99.1 Unaudited proforma consolidated
statement of condition as of
September 30, 1996, and unaudited
proforma consolidated statements of
income for the year ended
December 31, 1995 and the nine
months ended September 30, 1996;
and notes to unaudited consolidated
proforma financial statements.
<PAGE> 1
EXH. 99.1
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
The following unaudited pro forma consolidated, condensed financial
statements have been prepared to reflect the merger of Dauphin Deposit
Corporation ("Dauphin") into First Maryland Bancorp (the "Company") on a
purchase accounting basis. Under purchase accounting, the assets and liabilities
of Dauphin are adjusted to their estimated fair value at the date of
consummation of the merger.
The unaudited pro forma consolidated, condensed financial statements
give effect to the merger of Dauphin into the Company at the beginning of each
period presented, but do not reflect anticipated expenses and nonrecurring
charges as a result of, or estimated expense savings and revenue enhancements
anticipated to result from, the merger. The unaudited pro forma consolidated,
condensed financial statements reflect only the effect of the payment of the
merger consideration and estimates relating to the fair value of certain
assets, liabilities and other items as more fully described in the notes to the
pro forma financial statements, and do not reflect any other purchase accounting
adjustments. The actual adjustments to Dauphin's accounts will be made as of
the consummation date of the merger and may be materially different from the
amounts presented in the following pro forma financial statements.
The unaudited pro forma consolidated, condensed financial statements
are provided for informational purposes, and are not necessarily indicative of
the financial condition and results of future operations that would have been
achieved had the merger been consummated at the dates indicated. The unaudited
pro forma consolidated, condensed financial information should be read in
conjunction with the consolidated historical financial statements (and notes
thereto) of the Company, and with the consolidated historical financial
statements (and notes thereto) of Dauphin.
<PAGE> 2
PRO FORMA CONSOLIDATED STATEMENT OF CONDITION
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
HISTORICAL
---------------------
($ in thousands) FIRST MD DAUPHIN PRO FORMA
BANCORP DEPOSIT PRO FORMA ADJUSTMENTS COMBINED
-----------------------------
9/30/96 9/30/96 (DEBIT) (CREDIT) 9/30/96
------- ------- ----------------------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $826,569 $178,669 $147,113 (b) $937,000 (a) $1,005,238
148,317 (c)
190,000 (d)
451,570 (e)
Money market investments 47,106 30,180 77,286
Investment securities available-for-sale 2,801,694 2,168,620 451,570 (e) 4,518,744
Assets held-for-sale 159,885 210,858 370,743
Loans, net of unearned income 6,615,161 3,236,742 14,678 (h) 9,866,581
Allowance for credit losses (170,529) (43,449) (213,978)
----------- ---------- ---------- ---------- -----------
Loans, net 6,444,632 3,193,293 14,678 0 9,652,603
----------- ---------- ---------- ---------- -----------
Premises and equipment 106,254 74,346 180,600
Due from customers on acceptances 9,878 9,878
Goodwill 86,437 14,137 802,919 (a) 2,375 (f) 860,686
32,463 (i) 11,919 (g)
7,276 (k) 14,678 (h)
28,007 (l) 81,581 (j)
Other assets 359,442 101,174 2,375 (f) 556,491
11,919 (g)
81,581 (j)
----------- ---------- ---------- ---------- -----------
TOTAL ASSETS $10,841,897 $5,971,277 $1,918,218 $1,499,123 $17,232,269
=========== ========== ========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Domestic deposits:
Non-interest bearing deposits $2,224,720 $499,399 $2,724,119
Interest bearing deposits 5,130,774 3,579,645 32,463 (i) 8,742,882
Interest bearing deposits in foreign
banking office 142,896 142,896
----------- ---------- ---------- ---------- -----------
Total deposits 7,498,390 4,079,044 0 $32,463 11,609,897
----------- ---------- ---------- ---------- -----------
Funds purchased, securities sold under
repurchase agreements and other borrowed
funds, short-term 1,257,216 1,208,815 2,466,031
Bank acceptances outstanding 9,878 9,878
Accrued taxes and other liabilities 309,501 93,722 7,276 (k) 438,506
28,007 (l)
Long-term debt 554,729 40,035 4,420 (a) 190,000 (d) 780,344
----------- ---------- ---------- ---------- -----------
Total Liabilities 9,629,714 5,421,616 4,420 257,746 15,304,656
----------- ---------- ---------- ---------- -----------
Guaranteed preferred beneficial interests in
junior subordinated debentures 147,113 (b) 295,430
148,317 (c)
Redeemable preferred stock 9,000 9,000
Stockholders' equity 1,203,183 549,661 549,661 (a) 420,000 (a) 1,623,183
TOTAL LIABILITIES, GUARANTEED PREFERRED
BENEFICIAL INTERESTS, REDEEMABLE ----------- ---------- ---------- ---------- -----------
PREFERRED STOCK AND STOCKHOLDERS' EQUITY $10,841,897 $5,971,277 $554,081 $973,176 $17,232,269
=========== ========== ========== ========== ===========
</TABLE>
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Notes to Pro Forma Consolidated Statement of Condition
(a) Purchase of outstanding shares, settlement of stock options and conversion
of $4.4 million of convertible subordinated debentures of Dauphin
for $43.00 per share. Of the total merger consideration of $1.36 billion,
$937 million will be paid to Dauphin shareholders who elect to receive
cash and to Allied Irish Banks, p.l.c. (""AIB'') for use of AIB American
Depository Shares. The remaining merger consideration of $420 million
will be in the form of Company common stock issued to AIB for use of AIB
American Depository Shares.
(b) Issuance of $147.1 million in guaranteed preferred beneficial interests in
junior subordinated debentures in December 1996.
(c) Issuance of $148.3 million in guaranteed preferred beneficial interests in
junior subordinated debentures in February 1997.
(d) Issuance of $190 million in subordinated notes to fund the acquisition.
(e) Sale of $451.6 million in short-term investment securities to fund the
acquisition.
(f) Adjustment of purchased and originated mortgage servicing to fair value.
(g) Recordation of the value of pension plan assets in excess of the projected
benefit obligation.
(h) Adjustment of loans receivable to fair value.
(i) Adjustment of deposits to fair value.
(j) Recordation of a core deposit intangible. An estimate of 2% of total
deposits was used.
(k) Adjustment of the liability for post retirement benefits to the actuarial
present value of the postretirement benefit obligation.
(l) Adjustment of the estimated tax liability associated with adjustments to
the carrying value of loans, pension assets, deposits, mortgage servicing
rights, and certain identifiable intangible assets.
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PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
SEPTEMBER 30, 1996
($ in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
-----------------------------------------------------------------
HISTORICAL PRO FORMA
----------------------
FIRST MD DAUPHIN PRO FORMA ADJUSTMENTS COMBINED
-----------------------
BANCORP DEPOSIT (DEBIT) (CREDIT) 9/30/96
--------- --------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $384,869 $186,952 $2,200 (a) $569,621
Interest and dividends on investment
securities 130,885 97,739 18,600 (b) 210,024
Interest on assets held-for-sale 6,571 7,639 14,210
Interest on money market investments 11,334 538 11,872
--------- --------- -------- ------- ---------
Total interest and dividend income 533,659 292,868 20,800 $0 805,727
--------- --------- -------- ------- ---------
INTEREST EXPENSE
Interest on deposits 152,706 118,831 8,100 (c) 263,437
Interest on Federal funds purchased and
other short-term borrowings 54,710 36,251 90,961
Interest on long-term debt 27,782 2,648 8,700 (d) 39,130
--------- --------- -------- ------- ---------
Total interest expense 235,198 157,730 8,700 8,100 393,528
--------- --------- -------- ------- ---------
Net interest income 298,461 135,138 29,500 8,100 412,199
Provision for credit losses 6,000 4,800 10,800
--------- --------- -------- ------- ---------
Net interest income after provision for credit
losses 292,461 130,338 29,500 8,100 401,399
--------- --------- -------- ------- ---------
Noninterest income 160,059 67,620 227,679
Noninterest expenses 301,503 127,781 22,800 (e) 472,884
6,100 (f)
7,400 (g)
7,300 (h)
--------- --------- -------- ------- ---------
Income before income taxes 151,017 70,177 73,100 8,100 156,194
Income tax expense 54,712 18,524 16,600 (i) 56,636
--------- --------- -------- ------- ---------
Net Income $ 96,305 $ 51,653 $ 73,100 $24,700 $ 99,558
========= ========= ======== ======= =========
</TABLE>
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PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
DECEMBER 31, 1995
($ in thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------------------
HISTORICAL PRO FORMA
---------------------
FIRST MD DAUPHIN PRO FORMA ADJUSTMENTS COMBINED
----------------------
BANCORP DEPOSIT (DEBIT) (CREDIT) 12/31/95
-------- -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $510,874 $245,440 $2,900 (a) $753,414
Interest and dividends on investment
securities 168,274 111,495 24,800 (b) 254,969
Interest on assets held-for-sale 7,305 5,589 12,894
Interest on money market investments 21,088 1,120 22,208
-------- -------- ------- ------- -----------
Total interest and dividend income 707,541 363,644 27,700 $ 0 1,043,485
-------- -------- ------- ------- -----------
INTEREST EXPENSE
Interest on deposits 205,566 147,502 10,800 (c) 342,268
Interest on Federal funds purchased and
other short-term borrowings 86,858 35,880 122,738
Interest on long-term debt 22,124 4,549 11,600 (d) 38,273
-------- -------- ------- ------- -----------
Total interest expense 314,548 187,931 11,600 10,800 503,279
-------- -------- ------- ------- -----------
Net interest income 392,993 175,713 39,300 10,800 540,206
Provision for credit losses 16,000 5,608 21,608
-------- -------- ------- ------- -----------
Net interest income after provision for credit
losses 376,993 170,105 39,300 10,800 518,598
-------- -------- ------- ------- -----------
Noninterest income 195,910 71,789 267,699
Noninterest expenses 388,724 153,119 30,400 (e) 600,043
8,200 (f)
9,900 (g)
9,700 (h)
-------- -------- ------- ------- -----------
Income before income taxes 184,179 88,775 97,500 10,800 186,254
Income tax expense 63,992 23,210 22,100 (i) 65,102
-------- -------- ------- ------- -----------
Net Income $120,187 $ 65,565 $97,500 $32,900 $ 121,152
======== ======== ======= ======= ===========
</TABLE>
<PAGE> 6
Notes to
Pro Forma Consolidated Statements of Income
(a) Amortization of the $14.7 million fair value premium on loans associated
with the acquisition assuming an amortization period of 5 years.
(b) Reduction in interest income due to the sale of $451.6 million in
short-term investment securities to fund the acquisition.
(c) Amortization of the $32.5 million fair value premium on deposits
associated with the acquisition assuming an amortization period of 3
years.
(d) Increase in interest expense resulting from $190 million in new
subordinated debt which will be used to fund the acquisition.
(e) Amortization of $760.1 million in goodwill associated with the acquisition
assuming an amortization period of 25 years.
(f) Amortization of the $81.6 million core deposit intangible associated with
the acquisition assuming an amortization period of 10 years.
(g) Minority interest expense resulting from the issuance of $147.1 million in
guaranteed preferred beneficial interests in junior subordinated
debentures in December 1996.
(h) Minority interest expense resulting from the issuance of $148.3 million in
guaranteed preferred beneficial interests in junior subordinated
debentures in February 1997 assumed to fund the acquisition.
(i) Reduction in income tax expense related to certain other pro forma
adjustments assuming an effective income tax rate of 39.55%.
