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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 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) October 28, 1997
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Harris Bankcorp, Inc.
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(Exact name or registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-18179 36-2722782
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(Commission File Number) (IRS Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 312-461-2121
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not applicable
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable
ITEM 5. OTHER EVENTS.
On September 4, 1997, Harris Trust and Savings Bank, a wholly-owned
subsidiary of Harris Bankcorp, Inc., announced that it had entered into a
contract to transfer its credit card portfolio to a company to be owned by
BankBoston Corporation, First Annapolis Consulting, Inc. and Bankmont Financial
Corp., the parent corporation of Harris Bankcorp, Inc. The transaction is
expected to close during fourth quarter 1997.
At the time of this announcement, the Harris charge card portfolio balance
amounted to approximately $750 million, representing less than 5% of Harris
Bankcorp's total consolidated assets. Upon completion of the transfer, Harris
Trust and Savings Bank will receive cash and an equity interest in the newly
formed company, which it intends to immediately sell for cash to Bankmont
Financial Corp. After the sale, Harris Trust and Savings Bank will no longer
have a financial interest in the results of that business. The projected
after-tax gain from the transaction is anticipated to be less than 10% of 1997
net income for Harris Bankcorp, Inc. The impact of this transaction on Harris
Bankcorp's financial position and future results of operations is not expected
to be material. A copy of the press release dated September 4, 1997 relating
to this transaction is attached as an exhibit to this Form 8-K.
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ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Not applicable
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable
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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.
HARRIS BANKCORP, INC.
(REGISTRANT)
By Paul R. Skubic
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Paul R. Skubic
Its Chief Accounting Officer
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Date October 28, 1997
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Exhibit 99
FOR IMMEDIATE RELEASE
NEW CREDIT CARD COMPANY TO BE FORMED BY
BANK OF MONTREAL/HARRIS BANK, BANKBOSTON AND FIRST ANNAPOLIS
Chicago/Boston/Baltimore, September 4, 1997 -- A new credit card company
that will combine the strengths and expertise of industry leaders with quality
credit card portfolios was announced today by Bank of Montreal (BMO) and its
U.S. subsidiary, Chicago-based Harris Bank, BankBoston and First Annapolis.
The three institutions plan to form a new U.S. credit card company, subject to
regulatory approval. A name for the new company will be announced at a later
date.
"We are creating a formidable new credit card company," said John R.
Soderlund, who will serve as president and chief executive officer of the
company. Soderlund currently is Managing Director of First Annapolis and has
been most recently responsible for helping to build BankBoston's national
credit card business. "This will be a ground-breaking company that will
capitalize on the opportunities and restructuring taking place in the credit
card industry."
Soderlund noted that according to First Annapolis research, the credit
card business is undergoing major structural change that is driving significant
consolidation. Large, aggressive, focused credit card companies are increasing
their market share and will control the market over the next five years.
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"The alliance between Bank of Montreal/Harris, BankBoston and First
Annapolis will allow our new company to compete in a marketplace where only
those players who are industry focused and sophisticated will prosper,"
Soderlund said.
( more )
CREDIT CARD/2
"In a consolidating industry, the winning issuers will have the economies
of scale to handle rising direct servicing costs, economies of skill in using
sophisticated information management techniques, and the innovative marketing
needed to position their credit cards uniquely in the eyes of consumers,"
Soderlund continued. "Our new company will bring all of these qualities and
skills together."
The company intends to be a top 15 credit card company by the year 2000 by
growing through both traditional channels and forging creative alliances with
other banks. These alliances will be designed to help banks stay in the credit
card business in a meaningful way while leveraging the new company's
capabilities.
The new company will use First Data Resources, a leading global provider
of issuer-based services, for data processing, customer service, credit and
collections support. Most Harris credit card issuing employees will become
employees of First Data Resources.
As part of the new company's formation, Bank of Montreal/Harris Bank will
contribute Harris' consumer card portfolio, made up of 500,000 customers, and
$750 million in receivables to the new company. BMO is also investing $115
million in cash. In exchange, BMO will have a 69 percent ownership of the
company. Credit cards under the Harris name will continue to be offered by the
new company to Harris customers.
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BankBoston will contribute its national credit card portfolio, made up of
about 550,000 customers, and approximately $1.2 billion in receivables for cash
and will receive 19 percent of company ownership. Credit cards under the
BankBoston name will continue to be offered and serviced through the new
company.
( more )
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CREDIT CARD/3
Together the banks will bring the new company quality portfolios, marquee
names, international footprints and capital strength.
First Annapolis, a leading U.S. consulting firm specializing in credit
cards and other retail financial services, will contribute to the new company
First Annapolis Marketing Information Services, Inc. (FAMIS), a comprehensive
credit card portfolio management company which brings specialized skills and
innovative marketing to the new company. FAMIS, under the direction of
Soderlund, has established a reputation for sophisticated data mining and
analytic capabilities. First Annapolis will have a 12 percent ownership.
Executives from each of the partnering companies made the following
comments about the alliance:
JEFFREY S. CHISHOLM, VICE CHAIR, BANK OF MONTREAL, ELECTRONIC FINANCIAL
SERVICES (which includes the credit card operations of BMO and Harris Bank):
"This new company will secure the strategic footing for Bank of Montreal and
Harris Bank to compete in the critical U.S. card issuing industry. The new
company will bring together three institutions with unique strengths and
experience. Bank of Montreal has worked closely with First Annapolis during
the past two years, benefiting from their expertise, and we look forward to new
successes with BankBoston. We are committed to becoming a leader in this
business so we can continue to offer our personal and small business customers
enhanced quality credit card products and services throughout North America."
( more )
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CREDIT CARD/4
CHAD GIFFORD, CHIEF EXECUTIVE OFFICER, BANKBOSTON: "We look forward to a
successful venture with Bank of Montreal, and John Soderlund and his management
team as they work to become a leader in the credit card industry. Over the
past two years, we have entered into two other joint ventures where it was
clear that scale and industry-specific expertise and focus would be necessary
for long-term success -- as is the case in the credit card industry. Both of
those ventures are recognized as major players in their markets and each
investment has clearly increased value for our shareholders. We believe this
will do the same. This transaction successfully completes the strategic review
of BankBoston's national consumer businesses."
FREDERICK A. WHITE, PRESIDENT AND COFOUNDER, FIRST ANNAPOLIS: "First
Annapolis Marketing Information Services was founded to help banks compete in
the credit card business by providing access to economies of scale and skill,
and innovative marketing techniques. This new venture represents an extension
of that strategy. We believe that partnerships like this company represent the
future of retail financial services."
Bank of Montreal (NYSE:BMO) is the only bank with a retail and commercial
presence in all three NAFTA countries. With assets of approximately US$147
billion, it is one of the 10 largest financial institutions in North America.
The Bank of Montreal group of companies includes Chicago-based Harris Bank, a
major financial institution in the Midwest, and Nesbitt Burns, one of Canada's
largest full-service investment firms rapidly expanding its presence in the
U.S. Bank of Montreal also holds a 16 percent equity and 20 percent voting
stake in Bancomer, a leading Mexican financial institution.
( more )
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CREDIT CARD/5
Harris Bank, with $22 billion in assets, is one of the largest community
bank networks in Illinois, a nationally recognized provider of personal trust
and private banking services, and a major Midwest corporate bank.
BankBoston (NYSE:BKB), with assets of $66.1 billion as of June 30, 1997,
was founded in 1784 and is the 15th-largest bank holding company in the United
States. BankBoston is engaged in: consumer banking in southern New England;
financing to selected corporations regionally, nationally and internationally;
and full-service banking in key Latin American markets. The corporation and
its subsidiaries operate through a network of offices in the United States and
through more than 100 offices in 23 countries in Latin America, Europe and
Asia, the third-largest network of any U.S. bank. The corporation's common and
preferred stocks are listed on the New York and Boston stock exchanges.
First Annapolis offers a family of specialized services - consulting and
investment banking - to the financial services industry. The firm's major
practice areas include credit, commercial and private label card issuance,
merchant card processing, electronic banking, and mortgage origination and
servicing. First Annapolis offers a variety of services including strategic
and business planning, financial diagnostics, marketing strategy and research,
risk analysis, vendor selection and negotiation, operations redesign, and
general management advisory services. The company also offers merger and
acquisition advisory services, business/ formation, business valuation and
transaction review, and due diligence support.
# # #
Contacts: Pam Kassner, Bank of Montreal/Harris Bank, 312/461-6625; Joe Barbera,
Bank of Montreal (Toronto), 416/927-2740; Karen Schwartzman, BankBoston,
617/434-7594; Frances Bakewell, First Annapolis, 410/855-8526.
