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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. ____________)
Name of the Issuer: First Independence Corporation
Name of Person(s) Filing Statement:
Title of Class of Securities:
CUSIP Number of Class of Securities:
Name, Address, & Telephone Number of
Persons Authorized to Receive Notices Gerald Van Wyke
and Communications on Behalf of Person(s) 500 Woodward, Suite 3400
Filing Statement: Detroit, MI 48226
(313) 962-5909 (Telephone)
(313) 962-3125 (Fax)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities
Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in check box (a) are preliminary copies. [X]
CALCULATION OF FILING FEE
Transaction Amount of Filing Fee
Valuation --------------------
-----------------------------
$271,862.67 based on an estimated aggregate $54.37
of 482.745 resulting fractional
shares of Common Stock to be purchased
times $563.16 book value per resulting
share based on book value of Common
Stock at December 31, 1998.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.
Amount previously paid: N/A Filing party: N/A
Form or registration no: N/A Date filed: N/A
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) Issuer: First Independence Corporation
44 Michigan Avenue
Detroit, MI 48226
Telephone: (313) 256-8400
(b) Security subject to the transaction: Common Stock, $1.00 par value.
As of April 30, 1999, there were 336,760 shares of Common Stock
outstanding, held of record by approximately 2,100 shareholders.
(c) There is no trading market for the securities and none is expected to
develop. No person has made a market in the Corporation's stock since 1991.
(d) No dividends have been paid on the Common Stock in the past 10 years. In
1991, pursuant to the exercise of supervisory authority over the Corporation by
the Federal Reserve Bank of Chicago, the Board of Directors adopted a resolution
providing that it will not declare dividends or distributions to any
shareholders without prior approval of the Federal Reserve Bank of Chicago. The
resolution remains in effect, and prior approval of the Federal Reserve Bank of
Chicago was received for making the redemption payments for fractional shares of
new Common Stock after the Reverse Stock Split. Also see preliminary Proxy
Statement filed the date of this Schedule ("Proxy Statement"), "Description of
Common Stock", page 8, which is incorporated herein by reference.
The Corporation has no separate business of its own and receives its
revenues from the Bank as dividends. The Bank is subject to regulation of the
Comptroller of the Currency pursuant to the National Bank Act. That Act limits
payment of dividends (12 USC ss.60) to the net profits of a bank remaining after
10% of the net profits of each half year of operations are transferred to
capital surplus, and the dividend paid in any calendar year may not, without the
prior approval of the Comptroller, exceed the net profits of the current year,
plus the net profits of the two preceding years (less the required transfers to
surplus). 12 USC ss.56 provides that dividends may not be paid if undivided
profits have been depleted by losses or otherwise. In other words, dividends may
be paid only from net earnings and not from the Bank's capital.
(e) Not applicable.
(f) The Corporation has not purchased any of its securities during the past
two full fiscal years. No purchase of Common Stock was made by any affiliates of
the Corporation in 1998 or 1997 except as shown below. The chart below shows the
number of shares purchased, the price ranges and the average quarterly prices
paid for Common Stock since January 1, 1997, by Don Davis, the Corporation's
largest Common Stockholder, Chairman of the Board and Chief Executive Officer of
the Corporation and the Bank; William Fuller, the Corporation's and Bank's
President, and Barry Clay, a director of the Corporation and the Bank.
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<TABLE>
<CAPTION>
DON DAVIS WILLIAM FULLER BARRY CLAY
--------- -------------- ----------
<S> <C> <C> <C>
TOTAL SHARES PURCHASED
SINCE 01/01/97 14,133 379 490
PRICE RANGE $5.00-7.00 $5.00-5.50 $5.60
1997
1st Quarter
2nd Quarter
3rd Quarter $5.00
4th Quarter $5.50
1998
1st Quarter $5.00
2nd Quarter $5.60
3rd Quarter $5.60 $5.60
4th Quarter $6.00 $5.33
1999
1st Quarter
2nd Quarter $7.00
</TABLE>
ITEM 2: IDENTITY AND BACKGROUND
(a-d) The person filing this statement is the issuer of the securities which are
subject to the Rule 13e-3 transaction. First Independence Corporation is a
Michigan corporation. It is a one-bank holding company, owning all of the
outstanding stock of First Independence National Bank of Detroit. Its executive
offices are located at 44 Michigan Avenue, Detroit, MI 48226, the same location
as the Bank.
The Board of Directors and executive officers of the Corporation and Bank
are listed below, along with their present businesses or employment.
Barry Clay, President
The Barclay Mortgage Funding Group
22190 W. Nine Mile Road
Southfield, MI 48034
Donald Davis, Chairman of the Board of the
Corporation and First Independence National Bank
of Detroit
44 Michigan Avenue
Detroit, MI 48226
William L. Fuller, President of the Corporation and
First Independence National Bank of Detroit
44 Michigan Avenue
Detroit, MI 48226
Georgis Garmo
Garmo & Co.,P.C.
31275 Northwestern Hwy., #133
Farmington Hills, MI 48334
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Dr. Charles Morton (Retired)
19520 Stratford
Detroit, MI 48221
Jamal Shallal
Lincorp Research
24175 Northwestern Hwy., #5
Southfield, MI 48075
Geneva Williams, Chief Operating Officer
United Way Community Services
1212 Griswold
Detroit, MI 48226
Alan C. Young, Principal
Alan C. Young & Assoc.
2990 W. Grand Blvd., #310
Detroit, MI 48202
Additional information about the employment of the Directors and the Executive
Officers of the Bank for the past five years is set forth in the Proxy
Statement, "Nominees for Board of Directors", pages 4, 5 (For Directors) and
"Executive Officers", page 6 (for Executive Officers), which information is
incorporated herein by reference.
(e-f) Neither the Corporation, the Bank, nor any of their directors, executive
officers or affiliates, during the last five years, have been convicted in any
criminal proceeding (excluding traffic violations or similar misdemeanors), nor
have they been a party to a civil proceeding in which any judgment, decree or
final order was issued enjoining violations of, or prohibiting, activities
subject to federal or state securities laws or finding any violation of such
laws.
(g) All of the directors and executive officers of the Corporation and the
Bank are United States citizens.
ITEM 3: PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
(a) (1-2) Not applicable.
(b) Not applicable.
ITEM 4: TERMS OF THE TRANSACTION
(a) Under the proposed Reverse Stock Split, each sixty shares of existing
Common Stock of the Corporation will be converted into one share of $1.00 par
value Common Stock. There will be no fractional shares or scrip issued. Thus,
the fractional shares of Common Stock remaining after the reclassification of
the Common Stock pursuant to the proposed transaction, (resulting from fewer
than sixty shares, will be redeemed by the Corporation at a price based on
$10.00 per old share of Common Stock, or $600.00.00 per new share of Common
Stock.
The transaction will be effected by an amendment to the Articles of
Incorporation reclassifying the Common Stock so that one share of new Common
Stock, par value $1.00 per share, will be issued for each sixty shares of old
Common Stock, $1.00 per share par value. Additional amendments to the Articles
of Incorporation will be adopted in order to adjust the conversion rights of
Class C Preferred Stock, Series MI-1 and Series 1994-1 so that they will be
equivalent to those rights which they possessed before the reclassification of
the Common Stock.
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In order to effect the terms of the reclassification, the Board of
Directors of the Bank have decided to declare and pay a cash dividend to the
Corporation, its sole shareholder, to provide the Corporation with sufficient
cash to pay for the fractional shares of new Common Stock.
See also the Proxy Statement for additional information regarding the
proposed transaction at "Proposal 2 Reverse Stock Split--1 Share for 60 Shares,
General", at page 8, and "Liquidation and Price of Fractional Shares", page 9,
which is incorporated herein by reference.
(b) Not applicable.
ITEM 5: PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE
(a-e) The Issuer and its affiliates do not have any plans or proposals for any
transactions or activities to occur after the proposed reclassification
transaction with respect to the Corporation or its subsidiary, the Bank,
involving extraordinary transactions such as mergers, reorganizations or
liquidations; a sale or transfer of a material amount of assets; any change in
the board of directors' or management; any material change in the present
dividend rate or policy or indebtedness or capitalization; or any other material
change in the corporate structure or business.
(f-g) The Corporation expects the transaction to result in a termination of the
registration of the Corporation's Common Stock under Section 12(g) of the
Securities Exchange Act and, therefore, a suspension of the Corporation's
obligation to file reports pursuant to Section 15(d) of that Act. This would
result from a reduction in the number of shareholders below 300 after the
Reverse Stock Split. Also see the Proxy Statement, "Reasons for the Proposed
Reverse Stock Split", page 8; "Results of the Proposed Reverse Stock Split",
page 8, which is incorporated herein by reference.
ITEM 6: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The Corporation will obtain all funds necessary to pay for fractional
shares of new Common Stock resulting from the reclassification from a dividend
to be received from First Independence National Bank, the Corporation's wholly
owned subsidiary. The amount of the dividend is expected to be approximately
$350,000 and the actual cost of redeeming fractional shares is expected to be
approximately $290,000. In addition, the dividend will be sufficient to cover
the expenses incurred in connection with the transaction. See the Proxy
Statement, "Funding the Reverse Stock Split", page 11, which is incorporated by
reference.
(b) A summary of expenses anticipated for the proposed reclassification is set
forth below.
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ESTIMATED EXPENSES OF REVERSE STOCK SPLIT
-----------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Filing fees $ 55
Attorney fees 10,000
Accounting fees 5,000
Appraisal fees 35,000
Printing and postage* 5,000
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Total $55,055
======
</TABLE>
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*Printing and postage costs due to the transaction are considered only for
printing and mailing new stock certificates. The incremental cost of printing
and mailing the proxy statement is negligible because these costs will be
incurred for the annual meeting in any case.
(c-d) There will not be any borrowing to cover the costs of the transaction.
ITEM 7: PURPOSES, ALTERNATIVES, REASONS AND EFFECTS
(a) The Board of Directors has approved the one-for-sixty share Reverse Stock
Split for two reasons: (1) There is no trading market for the Common Stock and
one is not expected to develop. The transaction will provide a large number of
small shareholders a means of obtaining cash for their investment in the
Corporation (over 85% of the shareholders own fewer than 60 shares of Common
Stock having an estimated fair value of $10.00 per share); (2) The transaction
will result in fewer than 300 continuing shareholders thereby eliminating
substantial reporting, accounting, legal, printing and mailing costs saving an
estimated $70,000 of costs per year. These savings will directly impact the
Corporation's consolidated earnings. See Proxy Statement, "Reasons for the
Proposed Reverse Stock Split", at page 8, and "Results of the Proposed Reverse
Stock Split", at page 8, which are incorporated herein by reference.
(b) The Corporation did not consider alternative means to accomplish its
purposes described in (a) above. It is attempting to identify all areas of
operations and its business for reducing costs. In addition, the relatively few
shares outstanding which could trade, in the Board's opinion, would not provide
the basis for a viable trading market for the Corporation's stock.
(c) The proposed reclassification of the Common Stock structure for the
transaction was adopted by the Board because it is an efficient, low cost means
of providing cash to small shareholders for their stock. It also provides a
predictable means by which the number of shareholders can be reduced to those
who own a reasonable amount of stock in the Corporation and will result in
substantial cost savings by reducing printing and mailing expenses as well as
accounting and legal fees required for periodic reporting pursuant to Section
15(d) of the Securities Exchange Act. See the Proxy Statement, at page 8,
"Reasons for the Proposed
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Reverse Stock Split", and "Results of the Proposed Reverse Stock Split", which
are incorporated herein by reference.
(d) The effects of the proposed transaction are described in the Proxy
Statement at "Reasons for the Proposed Reverse Stock Split", at page 8, "Results
of the Proposed Reverse Stock Split", at page 8, "Financial Information", at
page 10, and "Federal Income Tax Consequences", at page 14. Those sections of
the Proxy Statement are incorporated herein by reference pursuant to General
Instruction D for Schedule 13E-3.
ITEM 8: FAIRNESS OF THE TRANSACTION
(a) The Board of Directors of the Corporation believes that the proposed
one-for-sixty Reverse Stock Split is fair to all Common Stockholders of the
Corporation. The proposal was adopted unanimously by the Board of Directors. See
the Proxy Statement, "Proposal 2. Reverse Stock Split-1 for 60 Shares",
"General", at page 8, which is incorporated herein by reference.
(b) In evaluating the proposal, the Directors considered the expected annual
cost savings from having significantly fewer shareholders, the lack an existing
trading market for the Corporation's stock, the large number of holders of only
a few shares (fewer than 60 shares) of the Corporation's stock and the value to
small shareholders of receiving cash for their shares.
Market prices for the Corporation's Common Stock are difficult to
determine because there is not, and has not been, a trading market for the
Corporation's Common Stock for approximately 10 years. Few transactions are made
in the course of a year and they are privately negotiated between the parties
involved. Transactions known to management over the past 27 months have ranged
between $5.00 and $7.00 per share of old Common Stock. The net book value per
old share of the Corporation's Common Stock was approximately $9.39 as of
December 31, 1998. While liquidation value of the Corporation is not determined,
it is perceived by the Board to be lower than book value because the fair value
of the Bank's real estate owned is believed to be less than the book value
amount. In addition, used computer equipment, software, and furniture are
believed to have a value less than their book value. The Board also obtained an
opinion regarding the fairness of the cash price for the fractional shares of
Common Stock, resulting from the proposed transaction. See also Item 9, below,
"Reports, Opinions, Appraisals and Certain Negotiations." Until 1997, the
Corporation and its subsidiary Bank generally were unprofitable since 1990.
There have been no firm offers made by any unaffiliated person during the two
years preceding the date of this Schedule for any merger or consolidation of the
Corporation into or with another entity, the sale or transfer of substantially
all the assets of the Corporation or for a change in control of the Corporation.
See also the Proxy Statement, "Reasons for the Proposed Reverse Stock Split" at
page 8, "Payment for Resulting Fractional Shares", at page 10, and "Financial
Information", at page 11, which are incorporated herein by reference pursuant to
Instruction D of the General Instructions for Schedule 13E-3.
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(c) The transaction is not structured to require approval of a majority of
unaffiliated security holders.
(d) The Directors who are not employees of the Corporation have not retained
an unaffiliated representative to act in behalf of unaffiliated security holders
for the purposes of negotiating the terms of the proposed transaction or
preparing a report concerning the fairness of the transaction. However, the
Board of Directors did obtain a report concerning the fairness of the
transaction and approved the transaction unanimously after considering the
factors referenced in paragraph (b) above and the report described in Item 9
below. See the Proxy Statement, at page 10, "Payment for Resulting Fractional
Shares", second paragraph, which is incorporated herein by reference.
(e) The proposed Reverse Stock Split was approved by all of the Directors of
the Corporation. Six of the eight Directors of the Corporation are not employees
of the Corporation or of any of its affiliates.
(f) Not applicable.
ITEM 9: REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(a) The Board of Directors obtained a fairness opinion from Roney Capital
Markets with respect to the amount of consideration to be paid for fractional
shares resulting from the Reverse Stock Split. See Proxy Statement to
shareholders of the Corporation, "Payment for Resulting Fractional Shares",
paragraphs 2 and 3, at page 10, which are incorporated herein by reference.
(b) (1) Roney Capital Markets, a division of Roney & Co., a regional
investment banking firm headquartered in Detroit, Michigan issued the fairness
opinion. Roney is not affiliated with or interested in any manner, with the
Corporation or the Bank.
(2) Roney is a well established investment banking firm in the mid-west
and, particularly, in Michigan. It has been engaged by scores of banks and bank
holding companies in connection with stock valuations, mergers and combinations,
acquisitions and divestitures, and financing of all kinds. See the Proxy
Statement at page 10, "Payment for Resulting Fractional Shares", second
paragraph, which is incorporated herein by reference.
(3) In selecting Roney Capital Markets, the Board of Directors
solicited proposals from three unaffiliated investment banking firms doing
business in Michigan. They considered price, expertise, understanding of
community banking and experience in the banking industry. See the Proxy
Statement at page 10, "Payment for Resulting Fractional Shares", second
paragraph, which is incorporated herein by reference.
(4) There has been no relationship in the past two years between the
Corporation or its affiliates and Roney Capital Markets or Roney & Co. other
than the opinion requested in connection with this transaction. There also have
been no material relationships between Roney
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and affiliates with the Corporation or its affiliates during the past two years,
and none is contemplated.
(5) The determination of the amount of consideration to be paid for
fractional shares was made by the Board of Directors after evaluating the
Corporation's historic earnings records, its book value, the quality of its
assets and deposits, the limited trading market for its stock, stock prices in
the few transactions that have occurred, and performance and stock price of
other community banks and holding companies considered comparable to the
Corporation and its subsidiary bank. The report obtained from Roney is to the
effect that the price of $10.00 per share of old Common Stock ($600.00 per share
of new Common Stock) is fair to the shareholders of the Corporation from a
financial point of view. See the Proxy Statement, at page 10, "Payment for
Resulting Fractional Shares", which is incorporated herein by reference.
(6) In arriving at its opinion, Roney reviewed annual reports for four
fiscal years of operation of the Corporation and its subsidiary, financial
characteristics of the Corporation compared to other publicly held companies in
the banking industry, current industry conditions and trends concerning
valuation of recent mergers and acquisitions, discussions with senior management
of the Corporation and discounted cash flows of the Corporation. Roney was not
requested to make any independent investigation of information provided in
financial statements of the Corporation, including public filings with the
Securities and Exchange Commission. In addition to discounted cash flow
analysis, comparable acquisition analyses and comparable company analyses, Roney
made numerous assumptions about the Corporation's prospects with respect to
asset growth, return on assets, balance sheet mix of assets and liabilities,
interest rates and general economic conditions. Roney also considered special
factors relating to the Bank's business such as its customer mix, core deposits,
opportunities and status as a minority bank. No limitations were imposed by the
Corporation upon Roney in connection with its investigation and evaluation of
the price to be paid for fractional shares of Common Stock.
(c) The report and opinion of Roney will be available for inspection and
copying at the Bank's principal executive offices during its regular business
hours by any interested equity security holder of the Corporation or his
representative who has been so designated in writing. See the Proxy Statement,
at page 10, "Payment for Resulting Fractional Shares", second paragraph, which
is incorporated herein by reference.
ITEM 10: INTEREST AND SECURITIES OF THE ISSUER
(a) The shares of Common Stock owned beneficially by Directors of the
Corporation and Bank, including the percentage of such securities owned is set
forth in Proposal 1. "Election of Directors" of the preliminary Proxy Statement,
"Nominees for Board of Directors". The chart showing the Directors and shares
and percentage of Common Stock owned is incorporated herein by reference
pursuant to Instruction D for Schedule 13E-3.
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In addition, Rose Ann Lacy, Senior Vice President and Chief Financial
Officer of the Corporation and the Bank, owns 1,717 shares of the Corporation's
Common Stock beneficially. This amounts to less than 1% of the outstanding
Common Stock.
(b) In February, 1999 an unaffiliated shareholder notified Don Davis that he
wanted to sell 2,433 shares of Common Stock to him. Although the possibility of
an $10.00 per share price for the stock was disclosed to the shareholder in
connection with a possible Reverse Stock Split, a price of $7.00 was negotiated
for all of the shares for sale. The transaction was effected on April 26, 1999.
There have been no other transactions in the Common Stock effected during the
past 60 days by the Corporation, the Bank or any of the Officers, Directors or
affiliates of the Corporation and Bank.
ITEM 11: CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES
There are no contracts, arrangements, understandings or relationships in
connection with the Rule 13e-3 transaction between the Corporation (or its
Directors, Officers, or affiliates) and any other person with respect to any
securities of the Corporation.
ITEM 12: PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION
(a) All of the Directors will vote their shares of Common Stock in favor of
the proposed Reverse Stock Split. Their shares total 217,615 shares (64.6% of
the total Common Stock outstanding). Also see the Proxy Statement, "Voting on
the Reverse Stock Split", at page 14, which is incorporated herein by reference
pursuant to General Instruction D of Schedule 13E-3.
(b) The Board of Directors has recommended a vote in favor of the Reverse
Stock Split. See the Proxy Statement, "Voting on the Reverse Stock Split", which
is incorporated herein by reference pursuant to General Instruction D of
Schedule 13E-3.
ITEM 13: OTHER PROVISIONS OF THE TRANSACTION
(a) There are no appraisal rights provided under applicable Michigan law or
the Articles of Incorporation of the Corporation. There are no other rights
specifically provided by law for shareholders who may object to the transaction.
See the Proxy Statement, "No Dissenters Rights", at page 15, which is
incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
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Item 14: FINANCIAL INFORMATION
(a) (1) The audited financial statements for the past two fiscal years filed
with the Corporation's most recent Annual Report are included in Form 10-KSB for
1998 at pages 21-43 and are incorporated herein by reference pursuant to General
Instruction D for Schedule 13E-3.
(2) The Corporation's latest financial statements required to be
included in a quarterly report pursuant to the Act is Form 10-KSB referenced in
(1) above. The earnings per share for 1998 and 1997 were $2.71 and $2.20
respectively as shown in the Income Statement at page 25 of the Form 10-KSB,
which is incorporated herein by reference.
(3) The ratio of earnings to fixed charges of the Corporation for 1998
were 1.37 including all deposit interest and 2.43 excluding all deposit
interest.
(4) The pro forma book value per share as of the close of the most
recent fiscal year, December 31, 1998, was $9.39 per share based on the balance
sheet shown in the 1998 Form 10-KSB at page 24, which is incorporated herein by
reference.
(b) (1) and (3) The Corporation's pro forma balance sheet and pro forma book
value per share showing the effect of the proposed Reverse Stock Split on the
Corporation's balance sheet as of December 31, 1998 are set forth in the Proxy
Statement, "Financial Information", pages 11 and 12, and are incorporated herein
by reference pursuant to General Instruction D to Schedule 13E-3.
(2) The Corporation's pro forma statement of income, earnings per share
amounts, and ratio of earnings to fixed charges for 1998 are set forth in the
Proxy Statement, "Financial Information", pages 11 and 12, which are
incorporated herein by reference pursuant to General Instruction D to Schedule
13E-3.
ITEM 15: PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The cost of the solicitation of proxies for the meeting at which the
Shareholders will vote on the proposed Reverse Stock Split will be borne by the
Corporation. In addition to solicitation by the use of mail, the Directors, and
Officers of the Corporation, without additional compensation, may solicit
proxies personally or by telephone or mail. At the present time there is no
intention to engage in a concerted proxy solicitation effort. See the Proxy
Statement, page 1, "General Information", which is incorporated herein by
reference. Assets of the Corporation, as summarized in Item 6(b), above, in an
aggregate amount of approximately $55,000 have been or will be used in
connection with the administrative costs of the proposed Reverse Stock Split to
cover such matters as accounting fees, legal fees, independent fairness opinion,
mailing costs and printing costs.
(b) No persons have been employed or retained to solicit or make
recommendations in connection with the proposed transaction.
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ITEM 16: ADDITIONAL INFORMATION
Not applicable.
ITEM 17: MATERIAL TO BE FILED AS EXHIBITS
(a) Not applicable.
(b) 1. Opinion from Roney Capital Markets.
2. Consent of Roney Capital Markets.
(c) Not applicable.
(d) Preliminary proxy statement dated , 1999, filed with Commission
May 14, 1999 which is incorporated herein by reference pursuant to General
Instruction D for Schedule 13E-3.
(e) Not applicable.
(f) Not applicable.
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
FIRST INDEPENDENCE CORPORATION
s/ Don Davis
----------------------
DON DAVIS, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
DATED: May 14, 1999
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RONEY
CAPITAL One Griswold
MARKETS Detroit, Michigan 48226
Telephone: (313) 963-6700
Fax: (313) 963-2303
May 12, 1999
EXHIBIT B-1
Board of Directors
First Independence Corporation
44 Michigan Avenue
Detroit, MI 48226
Attn: Mr. Donald Davis
PRIVATE & CONFIDENTIAL
Gentlemen:
First Independence Corporation (the "Company") has engaged Roney Capital
Markets, a division of Banc One Capital Markets, Inc. ("Roney") to present an
opinion with respect to the amount per share (the "Value") to be paid to holders
of fractional shares of the Company's Common Stock following the Company's
proposed one-for-60 reverse stock split. The Value to be paid to holders of
fractional shares following the Company's proposed one-for-60 reverse stock
split will be based on $10.00 per share of Common Stock owned prior to the
reverse stock split.
Roney Capital Markets is a regional investment banking firm of recognized
standing. As part of our investment banking services, we are regularly engaged
in the valuation of corporate entities in connection with public offerings and
merger and acquisition transactions. No limitations were imposed by the Company
upon Roney with respect to the investigations made or procedures followed by
Roney in rendering its opinion.
In arriving at our opinion, we have:
I. Reviewed each of the annual reports of the Company filed on Form 10-KSB
for each of the years ended December 31, 1996, 1997 and 1998;
II. Compared certain financial characteristics of the Company to other
publicly held companies we deemed relevant;
<PAGE> 14
First Independence Corporation
May 12, 1999
Page 2
III. Researched current industry conditions and trends concerning the
valuation of recent mergers and acquisitions;
IV. Conducted discussions with the senior management of the Company
concerning the business and future prospects of the Company;
V. Reviewed the discounted cash flow of the Company as set forth in the
projections of management of the Company; and
VI. Reviewed such other financial and industry data and performed such
other analyses and taken into account such other matters as we deemed
necessary or appropriate.
In preparing our opinion, we have relied upon the accuracy and completeness of
all of the above information and all other financial and other information
supplied or otherwise made available to us by the Company and we have not
independently verified such information or undertaken an independent evaluation
or appraisal of the assets or liabilities of the Company, nor have we been
furnished any such evaluation or appraisal. We have also reviewed certain other
information provided to us by the Company, and have met with senior management
to discuss the business, assets and prospects of the Company. We have also made
certain assumptions as to the reasonableness of the Company's financial and
operating forecasts and relied upon the senior management of the Company as to
the ability of the Company to achieve the financial and operating forecasts (and
the assumptions therein) provided to us. In that regard, we have assumed with
your consent that such forecasts reflect the best currently available estimates
and judgments of management of the Company as to the future financial
performance of the company. Further, in connection with our review, we have not
assumed any responsibility for independent verification of any of the foregoing
information and have relied on its being complete and accurate in all material
respects.
In our analyses, we have made numerous assumptions with respect to industry
performance, business and economic conditions, and other matters, many of which
are beyond the control of the Company. Any estimates contained in our analyses
are not necessarily indicative of future results or value, which may be
significantly more or less favorable than such estimates. The estimated value of
the company does not purport to be an appraisal or necessarily reflect the price
at which companies or their securities actually may be sold. No company or
transaction utilized in our analyses was identical to the Company. Accordingly,
such analyses are not based solely on arithmetic calculations; rather, they
involve complex considerations and judgments concerning differences in financial
and operating characteristics of the relevant companies, the timing of the
relevant transactions and prospective buyer interests, as well as other factors
that could affect the public trading markets of companies to which the Company
is being compared. None of the analyses performed by us was assigned a greater
significance than any other.
It should be noted that this opinion is based on economic and market conditions
and other circumstances existing on, and information made available as of, the
date hereof.
Our opinion is directed to the Board of Directors of the Company and does not
constitute a recommendation to the Board of Directors of the Company and has
been prepared for the
<PAGE> 15
First Independence Corporation
May 12, 1999
Page 3
confidential use of the Board of Directors and senior management of the Company
and may not be reproduced, summarized, described or referred to or given to any
other person without our prior written consent. Our opinion is limited solely to
the fairness of the Value to holders of fractional shares of the Company's
Common Stock following the Company's proposed one-for-60 reverse stock split,
and does not address the fairness of such Value to holders of whole shares
following the reverse stock split.
On the basis of, and subject to, the foregoing, we are of the opinion that, as
of the date hereof, the Value to be paid to holders of fractional shares of the
Company's Common Stock is fair to such holders, from a financial point of view.
Sincerely,
/s/
Roney Capital Markets,
a division of Banc One Capital
Markets, Inc.
<PAGE> 16
EXHIBIT B-2
CONSENT OF RONEY CAPITAL MARKETS,
A DIVISION OF BANC ONE CAPITAL MARKETS, INC.
We hereby consent to the inclusion of our opinion letter dated May 12,
1999, to the Board of Directors of First Independence Corporation as Exhibit B-1
to the Proxy Statement and Schedule 13E-3 relating to the proposed one-for-60
reverse stock split of First Independence Corporation Common Stock and to the
references to our firm and such opinion in such Proxy Statement and Schedule
13E-3. In giving such consent, we do not admit that we come within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933, as amended (the "Act"), or the rules and regulations of the Securities and
Exchange Commission thereunder, nor do we admit that we are experts with respect
to any part of such Registration Statement within the meaning of the term
"experts" as used in the Act or the rules and regulations of the Securities and
Exchange Commission thereunder.
/s/
Roney Capital Markets,
a division of Banc One
Capital Markets, Inc.
May 14, 1999
