SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities
Act of 1934
Date of Report (Date of earliest event reported) November 21, 2000
USBANCORP, Inc.
(exact name of registrant as specified in its charter)
Pennsylvania 0-12204 25-1424278
(State or other (commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of Incorporation)
Main and Franklin Streets, Johnstown, Pa. 15901
(address or principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 814-533-5300
N/A
(Former name or former address, if changed since last report.)
Form 8-K
Item 5. Other Events.
USBANCORP, Inc. (the "Registrant") announced that its
Chairman, Chief Executive Officer and President, Orlando B.
Hanselman, announced that he is voluntarily freezing his base salary
for four years through January 1, 2005. For a more detailed
description of the announcement see the press release attached as
Exhibit #99.1.
Exhibits
--------
Exhibit 99.1 Press release dated November 21, 2000, announcing
the voluntary freezing of the Chairman, Chief
Executive Officer and President, Orlando B.
Hanselman's salary for four years through January
1, 2005.
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.
USBANCORP, Inc.
By /s/Jeffrey A. Stopko
Jeffrey A. Stopko
Senior Vice President
& CFO
Date: November 21, 2000
Exhibit 99.1
CEO VOLUNTARY SALARY FREEZE
JOHNSTOWN, PA.-(NASDAQ:UBAN). Orlando B. Hanselman, USBANCORP Inc.'s
Chairman, Chief Executive Officer and President, announced today that
he is voluntarily freezing his base salary for four years through
January 1, 2005.
Hanselman's base salary will be frozen at the current level of
$236,000. An independent Arthur Andersen market study dated November
2000, stated that the 50th percentile base salary for a position
comparable to Hanselman's in similarly sized institutions is $315,000,
and the 25th percentile is $242,000.
"The banking industry is facing significant challenges today,"
Hanselman explained. "These challenges include cyclical rising
interest rates that are compressing banks' net interest margins,
reducing loan demand, and squeezing profits from investment leverage
and mortgage banking. More profound and unprecedented challenges
include expanded competition from non-banks such as Wal-Mart, State
Farm, and the large brokerage houses, as well as adaptation to a 24-
hour, seven day-a-week e-commerce economy.
"USBANCORP is addressing these challenges head-on with
progressive strategies and new technology. During this period,
however, our earnings and stock price are down. Like our industry, we
need to see a turn in the economic cycle back to lower and falling
interest rates and must have time for our adaptation to the e-commerce
economy to show earnings, not just costs. I want our stakeholders to
know that I am committed to USBANCORP for the long-term and I continue
to be bullish on our future."
USBANCORP's primary core businesses - retail banking, commercial
lending and leasing, and trust and financial services - each have
achieved increasing returns on equity during 2000 as compared to 1999.
Cyclical rate pressures during 2000 have caused average monthly
revenue from USBANCORP's leverage program to decline to $170,000 from
the 1999 monthly average of $558,000, and USBANCORP's wholesale
mortgage business to lose $630,000 through September 30, 2000.
"Our business is cyclical and the rate environment is not
currently favorable," Hanselman said. "But the rate cycle will again
turn favorable. Until that time, my bullishness comes from our well
defined strategies and the improving returns from our core businesses."
USBANCORP, Inc.'s Board of Directors carefully considered
Hanselman's offer of a voluntary base salary freeze and the Arthur
Andersen study. In accepting Hanselman's freeze, the Board unanimously
approved a non-recurring signing bonus for Hanselman in recognition of
his promotion to Chairman and Chief Executive Officer earlier this
year. The unanimously approved bonus consists of 30,000 shares of
USBANCORP common stock, with an associated cash gross-up for taxes, to
be provided by December 31, 2000.
By using common stock to compensate Hanselman for the next four
years, the Board is championing the interests of USBANCORP, Inc.'s
shareholders by more closely aligning the executive's interests to
share price appreciation. The Board also wants to continue to
emphasize a philosophy of "shareholder friendliness" in compensation
policy by placing more executive compensation "at risk" based upon
performance.
These actions by the Board and Hanselman demonstrate their mutual
commitment to USBANCORP, Inc. shareholders and their shared belief in
the strength of the Company today as well as the expected prosperity of
the future.
At September 30, 2000, USBANCORP had total assets of $1.27
billion and shareholders' equity of $73 million or $5.47 per common
share. USBANCORP's common stock currently trades at a market price
approximating 71% of book value and 9 times expected 2000 operating
earnings and 6.6 times expected 2000 cash operating earnings. At
current price levels the annual common dividend of $0.36 per share
approximates a 9% dividend yield.
USBANCORP, a financial holding company (pursuant to the
Gramm-Leach-Bliley Act), is the parent of U.S. Bank and USBANCORP
Trust and Financial Services Company in Johnstown; Standard
Mortgage Company in Atlanta, Georgia; UBAN Associates of State
College; and United Bancorp Life Insurance Company in Arizona.
The Company's U.S. Bank subsidiary also has mortgage companies
based in both Greensburg and State College. USBANCORP's customer
reach is extensive beyond its primary dominant market of Cambria
and Somerset counties. Standard Mortgage Company has mortgage
origination operations in 14 states predominantly in the
Southeast. U.S. Bank Leasing has clients in ten states including
Alabama, California, Florida, Mississippi, New Mexico, Ohio,
Oklahoma, Pennsylvania, Wisconsin and Texas. UBAN Associates, the
consulting subsidiary, has banking clients in Pennsylvania, Ohio,
Texas, Florida, and West Virginia. USBANCORP Trust and Financial
Services, with $1.4 billion of client assets under management, has
union investor clients in Pennsylvania, Ohio, Michigan, West
Virginia, and Indiana.
