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: August 31, 1996
ARROW FINANCIAL CORPORATION
A New York Corporation
0-12507 22-2448962
Commission File Number I.R.S. Employer Identification No.
250 Glen Street
GLEN FALLS, NEW YORK 12801
Registrant's telephone number: (518) 745-1000
Item 2. Acquisition or Disposition of Assets
Sale of Substantially All Assets of Green Mountain Bank to
ALBANK
On September 28, 1996, the Registrant, its wholly-owned
subsidiary, Arrow Vermont Corporation ("AVC"),
and AVC's wholly-owned subsidiary, Green Mountain Bank
("GMB"), a Vermont-chartered banking corporation
headquartered in Rutland, Vermont, completed the
previously announced sale of five of the six banking offices
of GMB and substantially all of the loans and deposits of
GMB to ALBANK, FSB, Albany, New York ("ALBANK").
The transaction was effected pursuant to a Purchase and
Assumption Agreement dated as of February 26, 1996 (the
"Agreement"). At closing, ALBANK acquired
approximately $109 million in loans and certain other assets
of GMB, including GMB's real and personal property
interests in five of its six remaining banking offices,
excluding the real and personal property associated with
GMB's main office at 80 West Street, Rutland, Vermont. In
addition, at closing ALBANK assumed substantially all of
the deposit liabilities of GMB, amounting to approximately
$107 million in deposits. Under a separate agreement
between Registrant, AVC and GMB, on the one hand, and
ALBANK, on the other also dated February 26, 1996,
ALBANK purchased GMB's mortgage servicing rights for a
portfolio of loans having an aggregate principal amount of
approximately $41 million.
Pursuant to the Agreement, ALBANK paid to GMB
at closing an amount equal to (a) the book value on GMB's books
of the Loans and other assets acquired less an agreed upon allowance
for loan losses, minus (b) the dollar amount of Deposit Liabilities
assumed, plus (c) a premium equal to 7.5 percent of the
dollar amount of Deposit Liabilities assumed. Subject to
post-closing adjustments, it is anticipated that the net
amount paid by ALBANK to GMB will be approximately
$7.7 million.
Other than in connection with the transactions
contemplated by the Agreement, neither ALBANK nor its
shareholders have had any material relationship with the
Registrant or any of its affiliates, any officer or director of
the Registrant or its affiliates, or any associate of any such
officer or director.
Item 5. Other Events
Sale of Substantially All Trust Business of Green Mountain
Bank to Vermont National Bank
On August 31, 1996, the Registrant, AVC and GMB
completed the previously announced sale of substantially all
of the trust accounts and trust business of GMB to Vermont
National Bank, Brattleboro, Vermont ("VNB"). The sale to
VNB was completed by transferring the trust accounts and
trust business of GMB to a newly created trust affiliate of
GMB, and immediately thereafter transferring the stock of
this trust subsidiary to VNB for the agreed upon
consideration. Also on August 31, 1996, VNB entered into
a four-year trust servicing agreement with Registrant's other
bank subsidiaries.
The purchase price paid by VNB for the stock was $2.43 million,
subject to certain post-closing adjustments as provided in the Agreement.
Under these adjustment provisions, GMB may be entitled to
receive from VNB up to an additional $570,000 on or after
November 30, 1996, depending upon VNB's post-closing
experience in retaining the transferred trust business.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements - not applicable
(b) Pro forma financial information - It is currently
impracticable to provide any pro forma financial
information that may be required to be filed.
The required pro forma financial information will
be filed as an amendment to this form as soon as
practicable, but in no event later than
December 10, 1996.
(c) Exhibits. The following exhibits are filed
with this report:
Exhibit No. Document
2.1 Purchase and Assumption Agreement among
Arrow Financial Corporation, Arrow
Vermont Corporation, Green Mountain Bank
and ALBANK, FSB, dated February 26,
1996 (Incorporated herein by reference to
Form 8-K dated February 26, 1996).
2.2 Service Purchasing Agreement among
Arrow Financial Corporation, Arrow
Vermont Corporation, Green Mountain Bank
and ALBANK, FSB, dated February 26,
1996 (Incorporated herein by reference to
Form 8-K dated February 26, 1996).
2.3 Amendment to the Purchase and
Assumption Agreement dated
September 25, 1996.
2.4 Amendment to the Service Purchasing
Agreement dated September 25, 1996.
<PAGE>
SIGNATURE
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: October 11, 1996
ARROW FINANCIAL CORPORATION
By: /s/John J. Murphy
John J. Murphy
Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number
Description
2.1
Purchase and Assumption Agreement among Arrow Financial
Corporation, Arrow Vermont Corporation, Green Mountain Bank
and ALBANK, fsb, dated February 26, 1996 (Incorporated herein
by reference to Form 8-K dated February 26, 1996).
2.2
Service Purchasing Agreement among Arrow Financial
Corporation, Arrow Vermont Corporation, Green Mountain Bank
and ALBANK, fsb, dated February 26, 1996 (Incorporated herein
by reference to Form 8-K dated February 26, 1996).
2.3
Amendment to the Purchase and Assumption Agreement dated
September 25, 1996.
2.4
Amendment to the Service Purchasing Agreement dated
September 25, 1996.
AMENDMENT TO
THE PURCHASE AND ASSUMPTION AGREEMENT
This AMENDMENT, dated as of September 25,
1996 (this "Amendment"), between Arrow Financial
Corporation ("AFC"), Arrow Vermont Corporation
("AVC"), and Green Mountain Bank ("GMB") (collectively,
the "Company"), and ALBANK, fsb ("ALBANK"),
WITNESSETH:
THAT WHEREAS, AFC, AVC, GMB and
ALBANK are parties to the Purchase and Assumption
Agreement, dated as of February 26, 1996 (the "Branch
Purchase Agreement");
WHEREAS, Section 22(g) of the Branch Purchase
Agreement provides that no supplement or modification to
the Branch Purchase Agreement shall be binding unless
executed in writing by the Company and ALBANK; and
WHEREAS, capitalized terms used but not defined
herein have the meanings ascribed to them in the Branch
Purchase Agreement;
NOW, THEREFORE, in consideration of their
mutual promises and obligations hereunder and other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and
ALBANK hereby agree as follows:
1. Pursuant to Section 22(g) of the Branch
Purchase Agreement, each of the Company and ALBANK
hereby agrees to modify the first sentence of Section 4(a)(ii)
of the Branch Purchase Agreement to read as follows:
On the Closing Date, GMB shall resign as trustee or
custodian, as applicable, under the Transferable
Custodial Accounts and appoint ALBANK as
successor trustee or custodian, as applicable,
thereunder, and ALBANK agrees to accept each
such appointment and to assume all fiduciary
obligations with respect thereto as of 12:01 a.m. on
the Closing Date.
2. Pursuant to Section 22(g) of the Branch
Purchase Agreement, each of the Company and ALBANK
hereby agrees to modify Section 5(b)(ii) of the Branch
Purchase Agreement to read as follows:
(ii) On the Closing Date, or if the
Closing Date is not a Business Day, on the first
Business Day following the Closing Date, ALBANK
shall transfer to an account of AVC or GMB, as
AVC may designate, in accordance with wire
transfer instructions provided to ALBANK an
amount (the "Estimated Amount") equal to the sum
of the Account Loan Amount, the Overdraft Lines
of Credit Amount, the Other Loan Amount, the
Personal Property Amount, the Real Property
Amount, the Premium Amount, the Prepaid Expense
Amount and the Cash on Hand Amount, in each
case as estimated by ALBANK and the Company
pursuant to Section 5(b)(i) above, the OREO
Amount as set forth in Section 5(a)(i)(I) above, the
Servicing Business Amount as set forth in Section
5(a)(i)(J) above and the Late Fee Amount as set
forth in Section 5(a)(i)(K) above, less the Deposit
Liabilities Amount estimated by ALBANK and the
Company pursuant to Section 5(b)(i) above,
provided, however, that if the Estimated Amount as
calculated in accordance with the preceding clauses
of this Section 5(b)(ii) shall be a negative number,
AVC or GMB shall transfer to an account of
ALBANK, in accordance with wire transfer
instructions provided by ALBANK, an amount equal
to the Estimated Amount multiplied by negative one
(-1.0) and provided further, that if the wire
transfer of the Estimated Amount is made on a day
after the Closing Date, the party making such
transfer shall include interest on the Estimated
Amount to be transferred at the Overnight
(uncollateralized) Federal Funds Rate from the
Closing Date to the date of payment.
3. Pursuant to Section 22(g) of the Branch
Purchase Agreement, each of the Company and ALBANK
hereby agrees to modify the first sentence of Section 11 of
the Branch Purchase Agreement to read as follows:
The consummation of the transactions provided for
herein (the "Closing") shall take place as of 12:01
A.M. on a date (the "Closing Date") to be
determined by agreement of the Company and
ALBANK, provided that, unless the parties agree
otherwise in writing, such date shall be not more
than ten (10) days after the first date (the
"Satisfaction Date") on which all required regulatory
approvals of the transactions contemplated hereby
have been received and all applicable waiting periods
with respect thereto have expired.
4. Pursuant to Section 22(g) of the Branch
Purchase Agreement, each of the Company and ALBANK
hereby agrees to supplement the Branch Purchase
Agreement by adding a new Section 22(i), which shall
provide as follows:
(i) Endorsements of Promissory Notes.
The use of the terms "without recourse" in any
endorsement by GMB of any promissory note
relating to any Loan transferred hereunder is not
intended to have and shall not have any effect on the
enforceability, validity or interpretation of any
provision hereof, the respective rights of the parties
provided herein or the performance of the parties of
their respective duties and obligations hereunder.
5. Pursuant to Section 22(g) of the Branch
Purchase Agreement, each of the Company and ALBANK
hereby agrees to supplement the Branch Purchase
Agreement by adding a new Section 22(j), which shall
provide as follows:
(j) Overdrawn Deposits.
(i) Notwithstanding any provision in this
Agreement to the contrary, specifically including subsection
(iv) of the definition of "Deposit Liabilities" contained in
Section I of the Agreement, the Deposit Liabilities as of the
Closing shall be understood to include the dollar amounts of
all deposit accounts of GMB that have negative balances as of
the Pre-closing Close of Business ("Overdrawn Deposits"),
subject to the other terms and conditions set forth herein
below.
(ii) The aggregate amount of such
Overdrawn Deposits as of the Pre-closing Close of Business
shall be offset against the aggregate amount of all other
Deposit Liabilities for purposes of calculating the Premium
Amount as defined in Section 5(a)(i)(F) of the Agreement and
for purposes of calculating the Deposit Liabilities Amount as
defined in Section 5(a)(ii) of the Agreement.
(iii) All representations, warranties, covenants and
agreements of the Company contained in this Agreement shall
remain in full force and effect to the extent that the same may
relate to the Overdrawn Deposits or to the books and records
maintained by the Company with respect thereto, except
insofar as any such representations, warranties, covenants and
agreements may indicate, by express terms or by implication,
that such Overdrawn Deposits will not be permitted to exist,
do not exist, or should not exist, as of any time before, on or
after the Closing Date, consistent with the laws, rules,
regulations or internal policies to which the Company may be
subject.
(iv) The Company and ALBANK agree
that, insofar as any portion of the aggregate amount of
Overdrawn Deposits as of the Pre-closing Close of Business
shall remain outstanding and shall not have been repaid or
reimbursed to ALBANK, as conclusively demonstrated by the
books and records of ALBANK, as of the close of business on
the fifth Business Day following the Closing Date, the
Company shall thereon or as soon as possible thereafter pay to
ALBANK an amount equal to such unpaid or unreimbursed
amount (the "Overdrawn Deposits Refund"), plus interest on
such amount at the Overnight (uncollateralized) Federal Funds
Rate from the Closing Date to the date of payment, in
immediately available funds; provided, however, that in the
event of any such payment by the Company to ALBANK of
the Overdrawn Deposits Refund as hereinabove provided,
ALBANK agrees that any portion of such amount as may
thereafter be received by it from the respective accountholders
on such Overdrawn Deposits prior to the 90th day after the
date of payment by the Company to ALBANK of the
Overdrawn Deposits Refund shall in turn be remitted by
ALBANK to the Company in a timely fashion.
6. The execution, delivery and effectiveness of
this Amendment shall not operate as an amendment to or
modification of any provision of the Branch Purchase
Agreement except as expressly provided herein.
7. This Amendment may be executed in one or
more counterparts, all of which taken together shall constitute
one instrument.
8. This Amendment is made and entered into in
the State of New York, and to the extent that federal law does
not control, the laws of that state shall govern the validity and
interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have
duly executed and delivered this Amendment as of the day and
year first above written.
ARROW FINANCIAL CORPORATION
ATTEST: By: /s/ Michael F. Massiano
Chairman
/s/ Gerard R. Bilodeau
Senior Vice President
& Secretary
ARROW VERMONT CORPORATION
ATTEST: By: /s/ Michael F. Massiano
Chairman
/s/ Gerard R. Bilodeau
Senior Vice President
& Secretary
GREEN MOUNTAIN BANK
ATTEST: By: /s/ John J. Murphy
Treasurer
/s/ Gerard R. Bilodeau
Senior Vice President
& Secretary
ALBANK, FSB,
ATTEST: By: /s/ Herbert G. Chorbajian
Chairman, President &
Chief Executive Officer
/s/ Freling H. Smith
Senior Vice President/
General Counsel
AMENDMENT TO
THE SERVICING PURCHASE AGREEMENT
This AMENDMENT, dated as of September 25,
1996 (this "Amendment"), between Arrow Financial
Corporation ("AFC"), Arrow Vermont Corporation
("AVC"), and Green Mountain Bank ("GMB") (collectively,
the "Company"), and ALBANK, FSB ("ALBANK"),
WITNESSETH:
THAT WHEREAS, AFC, AVC, GMB and
ALBANK are parties to the Servicing Purchase Agreement,
dated February 26, 1996 (the "Servicing Purchase
Agreement");
WHEREAS, Section 7.9 of the Servicing Purchase
Agreement provides that no supplement or modification to
the Servicing Purchase Agreement shall be binding unless
executed in writing by the Company and ALBANK; and
WHEREAS, capitalized terms used but not defined
herein have the meanings ascribed to them in the Servicing
Purchase Agreement;
NOW, THEREFORE, in consideration of their
mutual promises and obligations hereunder and other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and
ALBANK hereby agree as follows:
1 . Pursuant to Section 7.9 of the Servicing
Purchase Agreement, each of the Company and ALBANK
hereby agrees to modify Section 2.2 of the Servicing
Purchase Agreement to read as follows:
Section 2.2 Conveyance of Servicing
Business; Delivery of Servicing Files; Payment of
Serviced Loan Suspense Amount: Payment of
Purchase Price
On the Closing Date (i) GMB shall sell,
transfer, assign, set over and convey to ALBANK all
of its right, title and interest in, under and to the
Servicing Agreements and ALBANK shall assume
the duties and obligations of GMB thereunder; and
(ii) GMB shall transfer to ALBANK the Servicing
Files in its possession and the originals of the
Servicing Agreements. On the Closing Date, or if
the Closing Date is not a Business Day, on the first
Business Day following the Closing Date, (x) GMB
shall transfer to ALBANK in immediately available
funds by wire transfer, the Serviced Loan Suspense
Amount as of the Pre-Closing Close of Business,
together with interest thereon at the Overnight
(uncollateralized) Federal Funds Rate from the
Closing Date to the date of payment; and (y)
ALBANK shall transfer to GMB or its designee, by
wire transfer in immediately available funds, the
Purchase Price in accordance with the Purchase and
Assumption Agreement. On the Closing Date,
GMB shall discontinue its servicing activities under
the Servicing Agreements, and ALBANK shall begin
servicing the Serviced Loans.
2. The execution, delivery and effectiveness of
this Amendment shall not operate as an amendment to or
modification of any provision of the Servicing Purchase
Agreement except as expressly provided herein.
3. This Amendment shall become effective
when executed by each of the parties hereto, and may be
executed in one or more counterparts, all of which taken
together shall constitute one instrument.
4. This Amendment is made and entered into in
the State of New York, and to the extent that federal law
does not control, the laws of that state shall govern the
validity and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have
duly executed and delivered this Amendment as of the day
and year first above written.
ARROW FINANCIAL CORPORATION
ATTEST: By: /s/ Michael F. Massiano
Chairman
/s/ Gerard R. Bilodeau
Senior Vice President
& Secretary
ARROW VERMONT CORPORATION
ATTEST: By: /s/ Michael F. Massiano
Chairman
/s/ Gerard R. Bilodeau
Senior Vice President
& Secretary
GREEN MOUNTAIN BANK
ATTEST: By: /s/ John J. Murphy
Treasurer
/s/ Gerard R. Bilodeau
Senior Vice President
& Secretary
ALBANK, FSB,
ATTEST: By: /s/ Herbert G. Chorbajian
Chairman, President &
Chief Executive Officer
/s/ Freling H. Smith
Senior Vice President/
General Counsel
