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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 28, 1998
Date of Report (Date of earliest event reported)
REPUBLIC SECURITY FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Florida
(State or Other Jurisdiction of Incorporation)
0-14671 59-2335075
(Commission File Number) (IRS Employer Identification No.)
4400 Congress Avenue
West Palm Beach, Florida 33407
(Address of principal executive offices) (Zip Code)
(561) 840-1200
Registrant's Telephone Number, Including Area Code
<PAGE>
Item 5. Other Events
On May 27, 1998, Republic Security Financial Corporation (the
"Company") entered into a definitive agreement whereby First Palm Beach Bancorp,
Inc., parent company of First Bank of Florida ("First Bank"), headquartered in
West Palm Beach, Florida, would merge into the Company and First Bank will merge
into the Company's wholly owned subsidiary Republic Security Bank, a Florida
commercial bank, in a stock-for-stock transaction accounted for as
pooling-of-interests. The Company has assets of $1.0 billion, loans of $670
million and deposits of $753 million. First Bank has assets of $1.8 billion,
loans of $1.0 billion and deposits of $1.3 billion.
Under the terms of the agreement, shareholders of First Bank will
receive 4.194 shares of the Company's common stock for each share of First Bank
common stock. The Company will issue approximately 21.3 million shares of its
common stock for all of the outstanding shares of First Bank. The Company
currently has 24.3 million shares of common stock outstanding. The transaction
is subject to shareholder approval of both the Company and First Bank, receipt
of state and federal regulatory approvals and other customary closing
conditions. The merger is expected to close in the fourth quarter of 1998.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
20.1 Press Release dated May 28, 1998, announcing acquisition
20.2 Republic Security Financial Corporation acquisition of First Palm
Bancorp, Inc. May 28, 1998, Investors Conference call
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[GRAPHIC OMITTED]
For Further Information call:
Rudy E. Schupp (561) 840-7838
Richard J. Haskins (561) 840-7840
Carla H. Pollard (561) 863-2554
News Release
For: Republic Security Financial Corporation
West Palm Beach, Florida, 33407
REPUBLIC SECURITY FINANCIAL CORPORATION
and
FIRST PALM BEACH BANCORP, INC.
Announce the acquisition of First Palm Beach Bancorp, Inc. by Republic
Security Financial Corporation
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West Palm Beach, FL. May 28, 1998 - Republic Security Financial
Corporation (NASDAQ:RSFC), a West Palm Beach, Florida-based bank holding company
and parent to Republic Security Bank announced today the execution of a
definitive agreement for Republic to acquire First Palm Beach Bancorp, Inc.
("First Bank"), West Palm Beach, Florida, parent company of First Bank of
Florida. First Bank is a $1.8 billion thrift holding company whose subsidiary
bank operates 51 branch offices in Palm Beach, Martin, Broward, Dade and Lee
counties.
First Bank has total assets of approximately $1.8 billion, loans of
$1.0 billion, deposits of $1.3 billion and stockholders' equity of $117 million.
Republic Security Financial Corporation will issue approximately 21.3 million
shares of its common stock for all outstanding shares of First Bank in a tax
free exchange accounted for as a pooling-of-interests. The definitive agreement
provides for a fixed exchange ratio whereby shareholders of First Bank will
receive 4.194 shares of Republic stock for each share of First Bank, subject to
adjustment under certain circumstances. Based on Republic's closing price of
$13.125 per share on May 27, 1998, the consideration represents approximately
$55.05 per First Bank share for an aggregate transaction value of approximately
$279.3 million.
In connection with the execution of the definitive agreement, First
Bank has granted to RSFC an option to purchase 19.9% of First Bank's outstanding
common stock. The transaction is subject to approval by shareholders of each
company, the State of Florida Banking Department and the Federal Reserve. The
transaction is expected to close in the fourth quarter of 1998. On a pro forma
basis as of March 31, 1998, Republic Security Financial Corporation has total
assets of approximately $2.8 billion, total stockholders' equity of
approximately $205 million and more than 45.3 million shares of common stock
outstanding. The holding company will do business through 83 branch offices in
Palm Beach, Martin, Broward, Dade and Lee counties, Florida.
The transaction is expected to be immediately accretive to tangible
book value and earnings accretive during fiscal year 1999, the first full year
of combined operations. Cost savings are expected to be approximately 24% of
projected First Bank non-interest expense in 1999 or $9.1 million. No revenue
enhancements are assumed in the projections. A one-time charge of approximately
$33.0 million is expected due to merger related charges and restructuring costs.
<PAGE>
"We are delighted with this merger for customers, shareholders and
employees as it will combine two strong companies serving Florida's top three
banking markets and more", said Rudy Schupp, Chairman of Republic Security
Financial Corporation. "First Bank and Republic Security Bank have each
developed franchises in near identical markets offering opportunities for
efficiencies and future performance that suggest a powerful banking franchise
when combined. Each bank brings to the table expertise and value, including
First Bank's innovative supermarket banking platform in Albertsons and Winn
Dixie stores. This supermarket banking effort is very complimentary to Republic
Security Bank's PC Banking and other electronic banking delivery systems and
complimentary to the combined bank's large branch network", said Schupp.
"The acquisition of First Bank expands Republic's already strong
franchise in Palm Beach, Broward and Dade counties while expanding Republic's
franchise into Martin and Lee counties. This acquisition produces a unique
franchise in the lucrative Southeast Florida banking market. The pro forma
company will be the largest independent commercial bank headquartered in Florida
" said Schupp.
"Our affiliation represents an excellent opportunity to enhance our
shareholders' value, deliver more services to our customers and join a strong
local bank that shares our operating philosophy ", said, Louis O.
Davis, Jr., Chief Executive Officer, President and Director of First Bank.
Republic Security Financial Corporation, with total assets of $1.0
billion, deposits of $753 million and stockholders' equity of $88 million at
March 31, 1998, is the holding company for Republic Security Bank, operating 32
full service banking offices headquartered in Palm Beach County, Florida. The
proposed acquisition of First Bank represents Republic's eighth acquisition
since 1992.
First Palm Beach Bancorp, Inc. is the parent of First Bank of Florida
and is the largest locally based thrift institution in Palm Beach County,
Florida. With assets of approximately $1.8 billion, First Palm Beach Bancorp,
Inc. serves the communities of Palm Beach, Martin, Broward, Dade and Lee
counties through the bank's 51 full service branches and 3 loan production
offices.
Republic Security Financial Corporation's Common Stock is traded on the
over-the- counter market and quoted on the NASDAQ National Market System under
the symbol RSFC. The stock of First Palm Beach Bancorp, Inc., is listed on
NASDAQ under the symbol FFPB.
An investors conference call is scheduled for today at 10:00 a.m.EST.
To participate in the call, dial (800) 553-0288. For a copy of the investor
package, please call John Taylor, Investor Relations Manager at (561) 881-5333
extension 309.
Statements made in this release that state the Company's or management's
intentions, hopes, beliefs, expectations or predictions of the future are
forward-looking statements. It is important to note that the Company's actual
results could differ materially from those projected in such forward-looking
statements. Factors that could cause future results to vary materially from
current expectations include, but are not limited to, changes in interest rates,
competition by larger financial institutions, legislation and regulatory changes
and changes in the economy generally and in business conditions in the South
Florida market and management's ability to timely integrate the Companies.
<PAGE>
REPUBLIC SECURITY FINANCIAL CORPORATION
Acquisition of
FIRST PALM BEACH BANCORP, INC.
May 28, 1998
Investors conference call:
TODAY, THURSDAY, MAY 28, 1998
10:00 am EST
(800) 553-0288
(800) 475-6701 - Replay
Beginning 12:00 p.m. EDT on May 28, 1998 running through 11:59 a.m.
on May 29, 1998
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FORWARD-LOOKING INFORMATION
This presentation contains estimates of future operating results for 1999 and
2000 for both Republic Security Financial Corporation and First Palm Beach
Bancorp, Inc. on a stand-alone and pro forma combined basis, as well as
estimates of financial condition, operating efficiencies and revenue creation on
a combined basis. These estimates constitute forward-looking statements (within
the meaning of the Private Securities Litigation Reform Act of 1995), which
involve significant risks and uncertainties. Actual results may differ
materially from the results discussed in these forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
general economic conditions, change in interest rates, deposit flows, loan
demand, real estate values, and competition; changes in accounting principles,
policies, or guidelines; changes in legislation or regulation; and other
economic, competitive, governmental, regulatory, and technological factors
affecting each Company's operations, pricing, product and services.
SUMMARY OF TRANSACTION
Consideration: Common Stock
Fixed Exchange Ratio: 4.194
Transaction Value per Share: $55.05
Indicated Deal Value: $279 Million
Price/Book Value: 237.87%
Price/Tangible Book Value: 243.13%
Price to LTM Earnings: 30.75x
Accounting Treatment: Pooling-of-Interests
Shares Issued: 21.3 Million
Drop Dead Date: March 31, 1999
Anticipated Closing Date: Q4 1998
Stock Option Agreement: 19.9% Option to Acquire
Common Stock of First Palm Beach
Note: Due diligence completed. Transaction subject to shareholder and
regulatory approval. Pricing data as of March 31, 1998
<TABLE>
<CAPTION>
PRO FORMA BALANCE SHEET DATA
At March 31, 1998
($in millions, except per share data)
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RSFC FFPB Pro Forma*
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<S> <C> <C> <C>
Loans, Net $669,828 $1,034,024 $1,703,852
Securities 143,018 514,176 657,194
Intangibles 6,970 2,534 9,504
Total Assets 1,016,106 1,791,370 2,807,476
Deposits 752,751 1,281,229 2,033,980
Borrowings 149,771 354,756 504,527
Common Equity 79,724 117,044 196,768
Tangible Book Value/Share $3.42 $22.64 $4.29
Tangible Equity/Tangible Assets 8.07% 6.40% 7.00%
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<FN>
* Before acquisition adjustments
</FN>
</TABLE>
<PAGE>
RATIONALE for FIRST PALM BEACH ACQUISITION
Creates largest commercial bank headquartered in Florida with 83 full-service
branches (16 supermarket branches)
Creation of Florida's Preeminent Southeast Banking Franchise:
$2.8 billion in assets
$1.7 billion in loans
$2.0 billion in deposits
$205 million in total equity
First Palm Beach Bancorp shareholders experience significant earnings
enhancement with the potential to compound future earnings at an accelerated
rate as a commercial bank
Republic Security has proven ability to transform a savings institutions into a
competitive commercial banking franchise
Pro forma company has a combined market capitalization of over $590 Million
Immediately accretive to earnings per share and book value per share
COST SAVINGS OPPORTUNITIES
The combination of Republic Security Financial and First Palm Beach Bancorp will
present an opportunity to further leverage the fixed cost base and is expected
to result in savings of $9 Million or 24% of First Palm Beach's operating
expenses in 1999 and results in savings of $11.9 Million or 32% in 2000
Savings will be realized primarily in the areas of:
Branch consolidations
Human resources
Data Processing
Corporate overhead (Outside services/ professionals)
<PAGE>
PRO FORMA INCOME STATEMENT Mean of I/B/E/S Analyst Projections ($ in millions,
except per share data)
Pro Forma Shares 1999 Earnings
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RSFC EPS $ 0.65
RSFC Estimated Core Net Income 24.02M 15.7M
FFPB Estimated Net Income 21.28M 9.7M
Cost Savings after tax (a) 5.6M
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Total 45.3M 31.0M
Pro Forma EPS $ .68
Accretion - $ $ .03
Accretion - % 4.62%
(a) Before acquisition adjustments
FIRST PALM BEACH BANCORP ACQUISITION SUMMARY
Enhances Republic Security's overall franchise value and creates a dominant
Southeast Florida banking network
RSFC's tangible book value accretion will be 6.4%
Attractive economies due to favorable cost savings and sound fundamentals
The combined entity's ROA and ROE and efficiencies will be attractive with an
opportunity for enhancement as Republic Security effects a "commercial bank
conversion" of the tradition savings institution, FFPB
Expands Republic Security's franchise in Florida's most affluent banking market
Consistent with Republic Security's in-market and contiguous and market
expansion strategy
Creates exciting leverage and growth opportunities
Creates high-powered independent commercial bank
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REPUBLIC SECURITY FINANCIAL CORPORATION
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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.
Republic Security Financial Corporation
(Registrant)
Date: May 28, 1998 /s/ Carla H. Pollard
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Carla H. Pollard
Vice President/Controller
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
20.1 Press Release dated May 28, 1998, announcing acquisition
20.2 Republic Security Financial Corporation acquisition of First
Palm Bancorp, Inc. May 28, 1998, Investors Conference call
