SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 2 to Form 8-K filed on November 21, 1996)
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 15, 1996
F&M BANCORP
(Exact name of registrant as specified in its charter)
Maryland 0-12638 52-1316473
(State of incorporation) (Commission File Number) (IRS Identification No.)
110 Thomas Johnson Drive, Frederick, MD 21702
(Address of principal executive offices)(Zip Code)
(301) 694-4000
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
The Merger of Home Federal Corporation with and into F&M Bancorp became
effective as of the close of business on November 15, 1996. As a result of the
merger, Home Federal Corporation stockholders received 0.49535 shares of F&M
Bancorp Common Stock in exchange for each share of Home Federal Corporation
Common Stock. Cash in lieu of fractional shares was paid at the rate of
$23.90 per share.
Pursuant to General Instruction F to Form 8-K, the press release dated
November 15, 1996, announcing the consummation of the merger of Home Federal
Corporation with and into F&M Bancorp is attached to this Current Report as
Exhibit 99.1, and is hereby incorporated by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Audited consolidated financial statements of Home Federal Corporation are
incorporated by reference to Home Federal Corporation's Annual Report to
Stockholders for the year ended December 31, 1995 filed as Exhibit 13 to Home
Federal Corporation's Annual Report on Form 10-KSB for the year ended December
31, 1995 (File No. 0-16463).
Unaudited consolidated financial statements of Home Federal Corporation
for the nine months ended September 30, 1996 are incorporated by reference to
Home Federal Corporation's Quarterly report on Form 10-QSB for the period ended
September 30, 1996 (File No. 0-16463).
(b) Pro Forma Financial Information.
Pro forma condensed financial information for each of the periods for
which financial information is provided pursuant to Item 7(a) is included in
Exhibit 99.2 of this filing and is hereby incorporated by reference.
(c) Exhibits
23 Consent of Smith Elliott Kearns & Company, LLC
99.1 Press Release of F&M Bancorp dated November 15, 1996.
99.2 Pro forma condensed financial information related to the merger of
F&M Bancorp and Home Federal Corporation.
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.
F&M BANCORP
Date: January 30, 1997 By: /s/ Jeffrey V. Erickson
Jeffrey V. Erickson
Chief Financial Officer
Exhibit 23
Consent of Smith Elliott Kearns & Company, LLC
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
F&M Bancorp
We hereby consent to the incorporation by reference in Amendment No. 2 to
Form 8-K for F&M Bancorp dated January 30, 1997 of our report dated February 16,
1996, on the consolidated financial statements of Home Federal Corporation and
Subsidiaries included in the Annual Report on Form 10-KSB of Home Federal
Corporation for the year ended December 31, 1995.
/s/ Smith Elliott Kearns & Company, LLC
SMITH ELLIOTT KEARNS & COMPANY, LLC
Hagerstown, Maryland
January 30, 1997
Exhibit 99.1
Press Release
November 15, 1996
F&M BANCORP COMPLETES HOME FEDERAL ACQUISITION
Investor Relations: Toll-Free: (888) 694-4170
Internet: www.fmbn.com
Frederick, MD, November 15, 1996 - F&M Bancorp (NASDAQ/NMS:FMBN), parent company
of Farmers and Mechanics National Bank, today announced that following the
receipt of all required regulatory approvals and satisfaction of all other
conditions precedent to closing, it has completed its acquisition of Home
Federal Corporation, Hagerstown, MD, and its principal subsidiary Home Federal
Savings Bank, effective as of the close of business November 15, 1996. Home
Federal Savings Bank becomes the second banking subsidiary of F&M Bancorp.
Faye E. Cannon, president and chief executive officer of F&M Bancorp, said,
"Today marks the advent of a new dimension in community banking for the
customers of Farmers and Mechanics National Bank and Home Federal Savings Bank.
We welcome our new affiliate to the F&M Bancorp family and look forward to
serving Home Federal's market with a growing array of traditional and
contemporary financial products and services. With this significant new presence
in Washington County, we have enhanced our position as the leading,
customer-focused community banking institution in our marketplace."
Richard W. Phoebus, Sr., president and chief executive officer of Home Federal
Savings Bank, added, "We believe this affiliation is good for Home Federal's
former stockholders and has great potential for our customers and the community.
F&M Bancorp's reputation for providing services to meet community needs has been
the basis for their impressive growth and development. We, too, have the
customer at the center of our business. With this important shared philosophy
and the considerable resources of our new parent company, Home Federal Savings
Bank is well positioned to efficiently expand its products, services and
delivery systems, creating even greater value for our customers."
Terms of the Plan and Agreement to Merge result in an exchange of 0.49535 shares
of F&M Common Stock for each share of Home Federal Common Stock, with fractional
shares paid in cash at the rate of $23.90 per share. The exchange ratio requires
the issuance of 1,247,791 new shares of F&M Bancorp Common Stock in exchange for
all 2,519,010 shares of Home Federal. The transaction has a value of $29.0
million based upon F&M's closing stock price of $23.25 per share on November 14,
1996.
Following the closing, Home Federal Corporation's stockholders will be advised
by letter as to the procedure for exchanging their shares.
The merger transaction will be accounted for as a "pooling of interests" whereby
the financial condition and results of operations of F&M Bancorp and Home
Federal Corporation will be combined for all prior periods in financial
statements published after November 15, 1996.
Based on the pro forma combined assets of F&M Bancorp and Home Federal
Corporation as if they had merged on September 30, 1996, F&M Bancorp would rank
as the fourth largest independent bank holding company headquartered in Maryland
with total assets of $989 million. It operates 24 branch offices and 32 ATMs of
Farmers and Mechanics National Bank in Frederick, Carroll and Montgomery
Counties, and delivers banking services throughout its market with the region's
first full-service mobile unit, Express Bank. Home Federal Savings Bank operates
seven offices and 17 ATMs primarily in Hagerstown, Washington County.
Exhibit 99.2
Unaudited Pro Forma Combined Financial Information
The unaudited pro forma combined balance sheets and the unaudited pro forma
combined statements of income of F&M Bancorp set forth below give effect, using
the pooling of interests method of accounting, to the merger of Home Federal
Corporation with and into F&M Bancorp based upon the conversion ratio of 0.49535
shares of F&M Bancorp Common Stock for each share of Home Federal Common Stock
outstanding as of each respective period end. The unaudited pro forma combined
balance sheets are presented as though the merger had occurred on September 30,
1996. The unaudited pro forma combined income statements are presented as though
the merger had occurred on January 1, 1993.
The unaudited pro forma financial information set forth below is for
illustrative purposes only, and therefore is not necessarily indicative of the
financial condition or results of operations of F&M Bancorp as they would have
been had the merger occurred during the periods presented or as they may be in
the future.
<TABLE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEETS
September 30, 1996
<CAPTION>
F&M Home Pro Forma
(Dollars in thousands) Bancorp Federal Adjustments Combined
------- ------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 32,009 $ 5,045 $ -- $ 37,054
Interest-bearing deposits
with banks -- 2,921 -- 2,921
Investment securities:
Held-to-maturity 66,117 49,790 -- 115,907
Available-for-sale,
at fair value 114,225 8,649 -- 122,874
-------- -------- ------- --------
Total investment
securities 180,342 58,439 -- 238,781
-------- -------- ------- --------
Loans, net of unearned income 508,263 152,116 -- 660,379
Less:
Allowance for credit losses (6,020) (3,680) -- (9,700)
-------- -------- ------- --------
Net Loans 502,243 148,436 -- 650,679
Bank premises and
equipment, net 19,741 4,401 -- 24,142
Other assets 25,737 9,404 -- 35,141
-------- -------- ------- --------
Total assets $760,072 $228,646 -- $988,718
======== ======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 99,554 $ 10,219 -- $109,773
Interest-bearing 528,168 152,399 -- 680,567
-------- -------- ------- --------
Total deposits 627,722 162,618 -- 790,340
Federal funds purchased and
securities sold under
agreeements to repurchase 35,509 -- -- 35,509
Other short-term borrowings 1,601 -- -- 1,601
Advances from the Federal Home
Loan Bank (FHLB) of Atlanta 15,143 43,636 -- 58,779
Accrued interest and
other liabilities 7,049 3,344 -- 10,393
-------- -------- ------- --------
Total liabilities 687,024 209,598 -- 896,622
SHAREHOLDERS' EQUITY
Common stock 22,135 2,519 3,717 28,371
Surplus 24,874 7,903 (3,717) 29,060
Retained earnings 26,675 8,749 -- 35,424
Net unrealized loss on
securities available for sale (636) (123) -- (759)
-------- -------- ------- --------
Total shareholders' equity 73,048 19,048 -- 92,096
-------- -------- ------- --------
Total liabilities and
shareholders' equity $760,072 $228,646 -- $988,718
======== ======== ======= ========
</TABLE>
<TABLE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
Nine months ended September 30, 1996
<CAPTION>
(Dollars in thousands except F&M Home Pro Forma
for per share amount) Bancorp Federal Combined
------- ------- ---------
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans $32,060 $ 9,699 $41,759
Interest and dividends on investment
securities
Taxable 5,028 2,544 7,572
Tax-exempt 2,737 -- 2,737
Interest on deposits with banks -- 186 186
Interest on federal funds sold 425 1 426
------- ------- -------
Total interest income 40,250 12,430 52,680
------- ------- -------
Interest expense:
Interest on deposits 15,932 5,058 20,990
Interest on federal funds purchased
and securities sold under agreements
to repurchase 1,339 -- 1,339
Interest on advances from the
FHLB of Atlanta 87 1,442 1,529
Interest on other borrowings 53 -- 53
------- ------- -------
Total interest expense 17,411 6,500 23,911
------- ------- -------
Net interest income 22,839 5,930 28,769
Provision for credit losses 900 -- 900
------- ------- -------
Net interest income after provision
for credit losses 21,939 5,930 27,869
------- ------- -------
Noninterest income:
Trust income 1,304 -- 1,304
Service charges on deposit accounts 2,473 941 3,414
Net losses on sales of securities (25) (30) (55)
Net gains on sales of loans 145 86 231
Net gains on sales of property 58 -- 58
Other operating income 2,247 894 3,141
------- ------- -------
Total noninterest income 6,202 1,891 8,093
------- ------- -------
Noninterest expense:
Salaries and employee benefits 10,194 2,719 12,913
Occupancy and equipment expense 2,703 1,256 3,959
Other operating expense 6,838 2,923 9,761
------- ------- -------
Total noninterest expense 19,735 6,898 26,633
------- ------- -------
Income before provision for income taxes 8,406 923 9,329
Provision for income taxes 2,130 209 2,339
------- ------- -------
Net income $ 6,276 $ 714 $ 6,990
======= ======= =======
Earnings per Common Share:
Net income $1.42 $0.28 $1.23
Weighted average number of shares 4,422,912 2,519,010 5,670,191
</TABLE>
<TABLE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
Nine months ended September 30, 1995
<CAPTION>
(Dollars in thousands except F&M Home Pro Forma
for per share amount) Bancorp Federal Combined
------- ------- ---------
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans $33,335 $ 9,487 $42,822
Interest and dividends on investment
securities
Taxable 4,210 2,138 6,348
Tax-exempt 2,670 -- 2,670
Interest on deposits with banks 1 103 104
Interest on federal funds sold 139 65 204
------- ------- -------
Total interest income 40,355 11,793 52,148
------- ------- -------
Interest expense:
Interest on deposits 15,724 4,891 20,615
Interest on federal funds purchased
and securities sold under agreements
to repurchase 1,683 -- 1,683
Interest on advances from the
FHLB of Atlanta 97 1,584 1,681
Interest on other borrowings 68 -- 68
------- ------- -------
Total interest expense 17,572 6,475 24,047
------- ------- -------
Net interest income 22,783 5,318 28,101
Provision for credit losses 950 -- 950
------- ------- -------
Net interest income after provision
for credit losses 21,833 5,318 27,151
------- ------- -------
Noninterest income:
Trust income 1,134 -- 1,134
Service charges on deposit accounts 2,169 853 3,022
Net gains on sales of loans 69 26 95
Net gains on sales of securities 8 -- 8
Net gains on sales of property 13 -- 13
Other operating income 2,097 559 2,656
------- ------- -------
Total noninterest income 5,490 1,438 6,928
------- ------- -------
Noninterest expense:
Salaries and employee benefits 9,929 2,334 12,263
Occupancy and equipment expense 2,292 1,161 3,453
Other operating expense 7,384 1,850 9,234
------- ------- -------
Total noninterest expense 19,605 5,345 24,950
------- ------- -------
Income before provision for (benefit from)
income taxes 7,718 1,411 9,129
Provision for (benefit from) income taxes 1,963 (808) 1,155
------- ------- -------
Net income $ 5,755 $ 2,219 $ 7,974
======= ======= =======
Earnings per Common Share:
Net income $1.31 $0.88 $1.41
Weighted average number of shares 4,407,840 2,519,010 5,655,119
</TABLE>
<TABLE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
Year ended December 31, 1995
<CAPTION>
(Dollars in thousands except F&M Home Pro Forma
for per share amount) Bancorp Federal Combined
------- ------- ---------
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans $44,566 $12,925 $57,491
Interest and dividends on investment
securities
Taxable 5,698 2,804 8,502
Tax-exempt 3,569 -- 3,569
Interest on deposits with banks 1 164 165
Interest on federal funds sold 286 95 381
------- ------- -------
Total interest income 54,120 15,988 70,108
------- ------- -------
Interest expense:
Interest on deposits 21,218 6,652 27,870
Interest on federal funds purchased
and securities sold under agreements
to repurchase 2,215 -- 2,215
Interest on advances from the
FHLB of Atlanta 96 2,066 2,162
Interest on other borrowings 89 -- 89
------- ------- -------
Total interest expense 23,618 8,718 32,336
------- ------- -------
Net interest income 30,502 7,270 37,772
Provision for credit losses 2,000 (349) 1,651
------- ------- -------
Net interest income after provision
for credit losses 28,502 7,619 36,121
------- ------- -------
Noninterest income:
Trust income 1,560 -- 1,560
Service charges on deposit accounts 2,943 1,154 4,097
Net gains on sales of loans 3,013 48 3,061
Net losses on sales of securities (256) -- (256)
Net gains on sales of property 20 -- 20
Other operating income 2,903 777 3,680
------- ------- -------
Total noninterest income 10,183 1,979 12,162
------- ------- -------
Noninterest expense:
Salaries and employee benefits 13,240 3,204 16,444
Occupancy and equipment expense 3,288 1,579 4,867
Other operating expense 11,025 2,840 13,865
------- ------- -------
Total noninterest expense 27,553 7,623 35,176
------- ------- -------
Income before provision for (benefit from)
income taxes 11,132 1,975 13,107
Provision for (benefit from) income taxes 2,933 (553) 2,380
------- ------- -------
Net income $ 8,199 $ 2,528 $10,727
======= ======= =======
Earnings per Common Share:
Net income $1.86 $1.00 $1.90
Weighted average number of shares 4,409,089 2,519,010 5,656,368
</TABLE>
<TABLE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
Year ended December 31, 1994
<CAPTION>
(Dollars in thousands except F&M Home Pro Forma
for per share amount) Bancorp Federal Combined
------- ------- ---------
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans $37,679 $11,561 $49,240
Interest and dividends on investment
securities
Taxable 5,513 2,675 8,188
Tax-exempt 3,603 -- 3,603
Interest on deposits with banks 20 173 193
Interest on federal funds sold 290 78 368
------- ------- -------
Total interest income 47,105 14,487 61,592
------- ------- -------
Interest expense:
Interest on deposits 16,568 5,203 21,771
Interest on federal funds purchased
and securities sold under agreements
to repurchase 1,208 -- 1,208
Interest on advances from the
FHLB of Atlanta 22 1,780 1,802
Interest on other borrowings 60 -- 60
------- ------- -------
Total interest expense 17,858 6,983 24,841
------- ------- -------
Net interest income 29,247 7,504 36,751
Provision for credit losses 910 278 1,188
------- ------- -------
Net interest income after provision
for credit losses 28,337 7,226 35,563
------- ------- -------
Noninterest income:
Trust income 1,144 -- 1,144
Service charges on deposit accounts 2,276 1,047 3,323
Net gains on sales of loans 52 83 135
Net gains on sales of property 725 -- 725
Other operating income 2,793 863 3,656
------- ------- -------
Total noninterest income 6,990 1,993 8,983
------- ------- -------
Noninterest expense:
Salaries and employee benefits 12,259 3,138 15,397
Occupancy and equipment expense 2,709 1,507 4,216
Other operating expense 9,217 2,771 11,988
------- ------- -------
Total noninterest expense 24,185 7,416 31,601
------- ------- -------
Income before provision for income taxes 11,142 1,803 12,945
Provision for income taxes 2,991 306 3,297
------- ------- -------
Net income $ 8,151 $ 1,497 $ 9,648
======= ======= =======
Earnings per Common Share:
Net income $1.86 $0.59 $1.71
Weighted average number of shares 4,393,312 2,519,010 5,640,591
</TABLE>
<TABLE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
Year ended December 31, 1993
<CAPTION>
(Dollars in thousands except F&M Home Pro Forma
for per share amount) Bancorp Federal Combined
------- ------- ---------
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans $36,581 $12,578 $49,159
Interest and dividends on investment
securities
Taxable 5,542 2,031 7,573
Tax-exempt 3,320 -- 3,320
Interest on deposits with banks 28 257 285
Interest on federal funds sold 386 65 451
------- ------- -------
Total interest income 45,857 14,931 60,788
------- ------- -------
Interest expense:
Interest on deposits 16,489 5,600 22,089
Interest on federal funds purchased
and securities sold under agreements
to repurchase 854 -- 854
Interest on advances from the
FHLB of Atlanta -- 2,069 2,069
Interest on other borrowings 48 27 75
------- ------- -------
Total interest expense 17,391 7,696 25,087
------- ------- -------
Net interest income 28,466 7,235 35,701
Provision for credit losses 1,530 1,687 3,217
------- ------- -------
Net interest income after provision
for credit losses 26,936 5,548 32,484
------- ------- -------
Noninterest income:
Trust income 1,091 -- 1,091
Service charges on deposit accounts 1,936 1,036 2,972
Net gains on sales of loans 633 370 1,003
Net losses on sales of securities 2 199 201
Net gains on sales of property 92 -- 92
Other operating income 2,422 1,258 3,680
------- ------- -------
Total noninterest income 6,176 2,863 9,039
------- ------- -------
Noninterest expense:
Salaries and employee benefits 11,206 3,031 14,237
Occupancy and equipment expense 2,631 1,410 4,041
Other operating expense 8,309 3,350 11,659
------- ------- -------
Total noninterest expense 22,146 7,791 29,937
------- ------- -------
Income before provision for (benefit from)
income taxes, loss from discontinued
operation, and cumulative effect of an
accounting change 10,966 620 11,586
Provision for (benefit from) income taxes 3,203 (154) 3,049
------- ------- -------
Income before loss from discontinued
operation and cumulative effect of
an accounting change 7,763 774 8,537
Loss from discontinued operation -- (72) (72)
Cumulative effect of a change in
accounting for income taxes -- 245 245
------- ------- -------
Net Income $ 7,763 $ 947 $ 8,710
======= ======= =======
Earnings (loss) per Common Share:
Before discontinued operation and
cumulative effect of an
accounting change $1.77 $0.40 $1.60
Discontinued operation -- (0.04) (0.02)
Cumulative effect of an accounting change -- 0.13 0.05
----- ----- -----
Earnings per Common Share $1.77 $0.49 $1.63
Weighted average number of shares 4,378,445 1,931,138 5,334,641
</TABLE>
