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): January 21, 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 South 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
(a) Merger Agreement
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"). Under the Merger Agreement, (i) Dauphin will merge with
and into First Maryland (the "Merger") and (ii) shareholders of Dauphin will
receive either (A) $43.00 per share of Dauphin Common Stock in cash or (B)
that number (the "Exchange Ratio") of AIB American Depository Shares ("AIB
ADSs") having a Closing Market Price (as defined below) of $43.00, at each
holder's election, but subject to certain limitations described below.
If the Closing Market Price of an AIB ADS shortly before the Effective Time
is below $37.00, then the Exchange Ratio will equal 1.1620, and if the Closing
Market Price is more than $43.00, then the Exchange Ratio will be 1.0000. If
the market price of an AIB ADS as measured during a period shortly before the
Effective Time is below $32.00, then Dauphin has the right to terminate the
Merger Agreement unless AIB adjusts the Exchange Ratio such that the value of
the AIB ADSs to be received by holders of Dauphin Common Stock is not less
than $37.19. "Closing Market Price" means the average closing price of the
AIB ADSs on the New York Stock Exchange for the ten New York Stock Exchange
trading days ending on the fifth business day prior to the closing date of the
Merger.
At least 51% of the outstanding shares of Dauphin Common Stock must be
converted into AIB ADSs. If an insufficient number of Dauphin shareholders
elect to receive AIB ADSs, then a shareholder who elects to receive all cash
may have some or all of his shares converted in to AIB ADSs. A shareholder
who makes no election may receive cash or AIB ADSs, in the discretion of AIB.
In connection with the Merger Agreement, Dauphin and AIB entered into a
Stock Option Agreement, dated January 21, 1997, pursuant to which Dauphin
granted to AIB an option to acquire up to 6,112,088 shares of Dauphin Common
Stock at an exercise price of $33.1875 per share.
Consummation of the Merger is subject to, among other things, the receipt
of approval of the Merger by the shareholders of Dauphin and of AIB and the
receipt of certain U.S. and Irish regulatory approvals. It is anticipated
that the Merger will be consummated in the third quarter of 1997.
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(b) Press Release
Set forth below is the text of the press release issued by the Company on
January 21, 1997, announcing the Merger.
NEWS from First Maryland Bancorp
for release:
January 21, 1997
$1.36 BILLION U.S. ACQUISITION BY ALLIED IRISH BANKS P.L.C.
BALTIMORE-Allied Irish Banks p.l.c. ("AIB") today announced that it has
reached a definitive agreement under which its subsidiary, First Maryland
Bancorp ("First Maryland") will acquire Dauphin Deposit Corporation ("Dauphin
Deposit") at $43 per share. Dauphin Deposit is a Pennsylvania bank holding
company with total assets of $6.0 billion and shareholders' equity of $570
million. Its Board of Directors has agreed to recommend the offer to its
shareholders. The total consideration of $1.36 billion results in a price-to-
earnings multiple of 19.1 times 1996 earnings or 2.36 times book value of
Dauphin Deposit as of December 31, 1996.
Under the terms of the agreement, each share of Dauphin Deposit may, at the
election of shareholders, be exchanged for either $43.00 in cash or an
equivalent value based on the current trading range for Allied Irish American
Depository Receipts ("ADRs"). Each ADR represents six ordinary shares of
Allied Irish. AIB's ordinary shares trade on the Dublin and London Exchanges,
while the ADRs trade on the New York Stock Exchange. In order to preserve the
tax-free nature of the transaction, no more than 49% of Dauphin Deposit shares
will be converted into cash. The ADR component of the offer price of $43 per
Dauphin Deposit ordinary share is fixed within an ADR price range of $37 to
$43.
The purchase of Dauphin Deposit is conditional on Irish and U.S. regulatory
approvals and the approval of the Dauphin Deposit shareholders. It is
conditional on the approval of AIB's shareholders which will be sought at an
Extraordinary General Meeting of the Bank. An explanatory circular describing
the transaction will be sent to shareholders in advance of the meeting. The
acquisition is expected to close during the third quarter of 1997.
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In conjunction with the acquisition, Allied Irish will seek approval from
its shareholders to purchase up to 50 million of its ordinary shares in the
open market.
Dauphin Deposit is a Pennsylvania bank holding company headquartered in
Harrisburg. It provides a full line of retail, commercial, trust and other
financial services in 12 counties in south-central Pennsylvania. It operates
98 branches and 92 ATMS, with 2,700 employees. The bank has strong
profitability and for the year ended December 31, 1996, reported profit before
tax of $96 million and after tax of $71 million, an 8% increase over 1995
earnings.
Within two years of completion, cost savings of up to $48 million per annum
are expected to be achieved. On this basis, the acquisition is expected to be
neutral for AIB's earnings per share before restructuring charges of $60
million ($39 million net of tax) in 1997, moderately accretive in 1998 and
significantly accretive in 1999 and beyond.
Upon completion of the acquisition, Christopher R. Jennings, Chairman and
Chief Executive Officer of Dauphin Deposit will become Vice Chairman of First
Maryland Bancorp. He will join First Maryland Bancorp's Board of Directors
and head the retail and commercial operations of the Pennsylvania franchise.
In addition, he will become Vice Chairman of the Executive Steering Committee
which will be responsible for setting the strategic direction for this merger,
and monitoring its progress. Mr. Jennings will report to Frank P. Bramble,
First Maryland Bancorp President and Chief Executive Officer.
Robert L. Fryer, President and Chief Operating Officer of Dauphin Deposit
Corporation and Chief Executive of its wholly owned broker subsidiary, Hopper
Soliday & Co. Inc., will now become Chairman of that subsidiary. He will
participate as a member of the Executive Steering Committee and work directly
with Frank P. Bramble to further develop First Maryland's non-traditional
banking strategy.
As part of this transaction, First Maryland will expand its Board of
Directors from 16 to 21 seats. These new positions will be filled by four
non-executive directors of Dauphin Deposit and Mr. Jennings.
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Commenting on the acquisition, Thomas P. Mulcahy, Allied Irish Group Chief
Executive, said, "This acquisition represents a major strategic move by AIB
Group which will enhance and enlarge our successful U.S. franchise. Dauphin
Deposit is a high-quality bank with a consistent record of strong
profitability. It is a major bank in south-central Pennsylvania with a
leading market share in the region. On completion of the transaction, our
U.S. subsidiary will have total assets of $17 billion and will be among the
top 50 banks in the United States. The acquisition is the largest to date by
an Irish company."
Jeremiah E. Casey, Chairman of the Board of First Maryland, said, "First
Maryland's stated strategy of expanding in south-central Pennsylvania is
fulfilled in a comprehensive way through this merger. Pennsylvania has been a
critical part of First Maryland's success story. The acquisition of The York
Bank gave us a strong market position in York County. Today's announcement
will expand our presence in a meaningful way and build for the future."
Christopher R. Jennings, Chairman and Chief Executive of Dauphin Deposit,
said, "Our board found in the Allied Irish Banks the best possible
affiliation. Of all the options we considered, the AIB combination presented
the best alternative for continued growth for shareholders, access to the
resources which will enable us to grow our business, and the most favorable
long-term career opportunities for our employees. The combining of our
companies certainly produces a very positive outcome for our constituencies."
Mr. Jennings added that Dauphin Deposit and First National Bank of Maryland
"will capture the fast-growing Interstate 83 corridor (I-83) and be the
dominant financial services provider in this vibrant region."
Merrill Lynch and AIB Capital Markets served as financial advisor to Allied
Irish and First Maryland while Morgan Stanley served as financial advisor to
Dauphin Deposit.
Also today, First Maryland reported earnings of $36 million for the quarter
ended December 31, 1996, up 14% compared with $31.5 million for the fourth
quarter of 1995. For the year ended December 31, 1996, First Maryland
reported earnings of $132.3 million, representing an increase of 10% over
1995.
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Frank P. Bramble, President and Chief Executive Officer, attributed the
earnings growth to core activities and the momentum created when an
organization stays focused on building customer relationships. As a result,
he said, "Loans were up 11%, the company's managed bankcard portfolio reached
$ 1.0 billion, and trust revenue grew by 29%."
First Maryland Bancorp is a wholly owned subsidiary of Allied Irish Banks
p.l.c., a financial services company with assets of $41 billion headquartered
in Dublin, Ireland.
First Maryland Bancorp is the holding company for First National Bank of
Maryland, The York Bank and Trust Company, and First Omni Bank, N.A.
Headquartered in Baltimore, Md., First Maryland operates 195 branches and 273
ATMs in Maryland, Pennsylvania, Washington, D.C., and northern Virginia. As
of December 31, 1996, First Maryland had assets of $10.8 billion.
-END-
For Additional Information:
Joan M. Gillespie, SVP
410-244-3944
or
Rudi J. Ruckmann, AVP
410-545-2080
First National Bank of Maryland
P.O. Box 1596
Baltimore, Maryland 21203
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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 thereunto duly authorized.
Date: January 29, 1997 FIRST MARYLAND BANCORP
By: /s/ Frank P. Bramble
_________________________
Frank P. Bramble
President and Chief Executive
Officer
By: /s/ Jerome W. Evans
________________________
Jerome W. Evans
Executive Vice President and
Chief Financial Officer
