SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 8-K
Amendment No. 1 to Original Form 8-K
Filed on December 30, 1998
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-----------------------
Date of Report
(Date of earliest
event reported): December 31, 1996
STATE FINANCIAL SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 0-18166 39-1489983
-------------------- --------------------- --------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
10708 West Janesville Road
Hales Corners, Wisconsin 53130
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(Address of principal executive offices including zip code)
(414) 425-1600
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(Registrant's telephone number)
page 1 of 6 Pages
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 15, 1998, State Financial Services Corporation ("SFSC")
completed its acquisition of Home Bancorp of Elgin, Inc. ("HBE") and its two
wholly-owned subsidiary.
Details of the HBE acquisition were set forth in SFSC's original Form
8-K filed in regards to this transaction on December 30, 1998.
ITEM 5. OTHER EVENT
The following unaudited Pro Forma Financial Information is presented to
show the impact on the historical financial position and results of operations
of SFSC from its merger with HBE which was consummated on December 15, 1998.
As a result of the merger, HBE shareholders received 0.914 shares of
SFSC Common Stock in exchange for each share of HBE Common Stock. Applying the
0.914 exchange ratio, SFSC issued 6,067,862 additional shares in exchange for
the 6,638,799 shares of HBE outstanding as of December 15, 1998. Post
consummation, SFSC had 10,076,017 shares outstanding as of December 31, 1998.
SFSC's merger with HBE was accounted for using the pooling of interests
method of accounting. Application of the pooling method retroactively restates
the financial information of SFSC and HBE as if the merger had been effective as
of the earliest period presented. Accordingly, the unaudited Pro Forma
Consolidated Balance Sheet reflects the combined financial position of SFSC and
HBE at December 31, 1998 and 1997. The unaudited Pro Forma Consolidated
Statements of Income for the years ended December 31, 1998, 1997, and 1996
includes the combined operating results of SFSC and HBE for each applicable
period as if the two companies had been combined in each of the years presented.
The combined company expects to achieve substantial merger benefits.
However, the unaudited pro forma earnings do not reflect any potential earnings
enhancements or cost reductions which are expected to result from the
consolidation of SFSC's and HBE's operation and are not necessarily indicative
of the results expected of the future combined operations. No assurances can be
given with respect to the ultimate level of earnings enhancements or reductions
to be realized.
The unaudited Pro Forma Financial Information is intended for
informational purposes and is not necessarily indicative of the future financial
position or future operating results of the combined company that would have
actually occurred had the merger been in effect as of the date or for the
periods presented.
Page 2 of 6 Pages
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATIONAND EXHIBITS.
(a) Pro Forma Financial information.
Unaudited Condensed Consolidated Balance Sheets of State Financial
Services Corporation and Subsidiaries as of December 31, 1998 and 1997.
Unaudited Condensed Consolidated Statements of Income of State Financial
Services Corporation and Subsidiaries for the twelve months ended
December 31, 1998, 1997 and 1996.
Other information related to this transaction which would otherwise be
required to be reported under Item 7(a) is not provided herein pursuant
to General Instruction B.3 of Form 8-K as substantially the same
information required by Item 7(a) has been "previously reported" (as
defined in Rule 12b-2) by the Registrant in connection with the
Registrant's Registration Statement on Form S-4 (Reg. No. 333-64375).
(b) The exhibits furnished with this Current Report on Form 8-K are listed
on the attached Exhibit Index.
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned thereunto duly authorized.
STATE FINANCIAL SERVICES
CORPORATION
By:/s/Michael A. Reindl
Michael A. Reindl,
Senior Vice President, Controller
and Chief Financial Officer
Page 3 of 6 Pages
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<TABLE>
<CAPTION>
STATE FINANCIAL SERVICES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets Dec. 31 December 31,
1998 1997
(Unaudited)
--------------------------------------------
ASSETS
<S> <C> <C>
Cash and due from banks 31,028,203 34,358,642
Federal funds sold 8,508,387 11,273,835
Other short-term investments 12,900,000 0
Interest-earning deposits 29,793,241 34,952,407
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Cash and cash equivalents 82,229,831 80,584,884
Investment securities - held-to-maturity 10,290,241 21,088,641
Investment securities - available-for-sale 94,704,827 76,616,660
Loans 612,433,404 567,544,244
Less allowance for loan losses 4,484,504 4,370,209
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NET LOANS 607,948,900 563,174,035
Premises and equipment 13,333,369 14,027,570
Accrued interest receivable 4,485,332 4,380,576
Other assets 15,376,023 14,000,545
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$828,368,523 $773,872,911
============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand 81,540,940 75,205,534
Savings 199,266,311 189,641,548
Money market 120,297,093 106,531,817
Other time 251,800,542 246,615,670
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TOTAL DEPOSITS 652,904,886 617,994,569
Notes payable 6,750,000 5,300,000
Securities sold under agreement to repurchase 4,116,677 4,850,160
Federal funds purchased 0 0
Federal Home Loan Bank Advances 25,000,000 5,000,000
Accrued expenses and other liabilities 3,270,762 4,934,465
Guaranteed ESOP obligation 0 0
Accrued interest payable 1,688,920 2,030,367
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TOTAL LIABILITIES 693,731,245 640,109,561
Stockholders' equity:
Preferred stock, $1 par value: authorized--
100,000 shares; issued and outstanding--
None
Common stock, $0.10 par value; authorized
25,000,000 shares; issued and
outstanding--10,076,017 shares in 1998
and 10,279,009 in 1997 1,007,601 1,027,901
Capital surplus 94,153,564 96,718,054
Net unrealized holding gain/(loss) on
securities available for sale 1,080,549 888,649
Retained earnings 43,748,273 47,882,792
Less: Guaranteed ESOP obligation (5,352,709) (6,385,962)
Recognition and retention program 0 (3,898,481)
Treasury Stock (140,254 shares in 0 (2,469,602)
1997)
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134,637,278 133,763,351
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$828,368,523 $773,872,911
============================================
See notes to condensed consolidated financial statements.
</TABLE>
Page 4 of 6 Pages
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<TABLE>
<CAPTION>
STATE FINANCIAL SERVICES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Twelve months ended Dec. 31,
1998 1997 1996
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Interest income:
<S> <C> <C> <C>
Loans, including fees 48,705,672 41,599,154 39,138,477
Investment securities
Taxable 6,902,230 6,644,283 5,338,766
Tax-exempt 1,346,350 839,358 758,689
Federal funds sold 632,586 148,152 246,412
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TOTAL INTEREST INCOME 57,586,838 49,230,947 45,482,344
Interest expense:
Deposits 24,795,930 19,453,399 19,203,627
Notes payable and borrowed funds 1,126,660 618,079 429,593
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TOTAL INTEREST EXPENSE 25,922,590 20,071,478 19,633,220
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NET INTEREST INCOME 31,664,248 29,159,469 25,849,124
Provision for loan losses 690,000 450,000 330,000
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES 30,974,248 28,709,469 25,519,124
Other income:
Service charges on deposit accounts 1,955,905 1,670,515 1,827,563
Merchant services 1,270,240 1,160,692 1,032,587
Building Rent 278,418 310,014 284,456
ATM 760,362 490,708 432,984
Security transaction commissions 534,462 122,382 150,611
Gains on mortgage origination sales 961,517 225,108 76,314
Investment security gains (losses) 420,817 (649) 0
Other 783,007 685,489 476,265
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6,964,728 4,664,259 4,280,780
Other expenses:
Salaries and employee benefits 12,907,315 10,194,853 9,402,692
Net occupancy expense 1,216,761 1,213,368 1,052,363
Equipment rentals, depreciation, and
Maintenance 2,786,845 2,500,073 2,563,398
Data processing 1,977,794 1,698,200 1,599,132
Legal and professional 1,140,723 993,799 543,428
Merchant services 948,651 917,216 871,237
ATM 630,449 620,345 618,792
Advertising 900,604 806,037 745,690
Goodwill amortization 632,837 151,426 64,148
One-time charge 7,917,613 0 0
Other 3,741,876 3,100,526 5,272,021
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34,801,468 22,195,843 22,732,901
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Income before income taxes 3,137,508 11,177,885 7,067,003
Income taxes 1,980,595 3,961,080 2,419,712
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NET INCOME $1,156,913 $7,216,805 $4,647,291
================================================================
Basic earnings per share $0.12 $0.75 $0.48
Diluted earnings per share $0.12 $0.74 $0.48
Weighted average shares - basic 9,581,734 9,616,909 9,663,788
Weighted average shares - diluted 9,655,822 9,706,740 9,703,114
</TABLE>
Page 5 of 6 Pages
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EXHIBIT INDEX
Exhibit Number Exhibit Description
2.1 Agreement and Plan of Merger, dated as of June 1, 1998, by
and between State Financial Services Corporation and Home
Bancorp of Elgin, Inc. (incorporated by reference to Exhibit
2.1 to State Financial Services Corporation's Registration
Statement on Form S-4 (Reg. No. 333-64375)).
page 6 of 6 Pages
