SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
MARCH 19, 1998
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(Date of Earliest Event Reported)
NEW ENGLAND COMMUNITY BANCORP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 06-1116165
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(Commission File Number) (IRS Employer Identification No.)
OLD WINDSOR MALL, P.O. BOX 130, WINDSOR, CONNECTICUT 06095
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(Address of principal executive offices and zip code)
Telephone: (860) 610-3600
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(Registrant's telephone number, including area code)
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Form 8-K
New England Community Bancorp, Inc.
Commission File No. 0-14550
Item 5. Other Matters
At separate meetings on March 19, 1998, the Boards of Directors of
New England Community Bancorp, Inc. ("NECB") and Bank of South Windsor ("BSW"),
respectively, approved a definitive agreement (the "Agreement") whereby BSW will
be acquired by NECB ("the Acquisition"). Following the consummation of the
transaction, BSW will be merged with and into NECB's wholly-owned subsidiary New
England Bank and Trust Company.
Under the terms of the agreement, South Windsor shareholders will
receive a fixed exchange of 1.3204 shares of New England Common Stock for each
share of South Windsor Common Stock. Using New England's closing price on March
18, 1998 of $25.50 per share, the transaction would have a value of $33.67 per
share to South Windsor shareholders and an aggregate transaction value of
approximately $32.8 million. In the event that the average closing price of New
England Stock, for the twenty days ending on the date of final regulatory
approval, is less than $23.48, the exchange ratio will (subject to certain
qualifications) be adjusted to result in the receipt by South Windsor
shareholders of New England shares having a value of $31.00 per share of South
Windsor common stock.
The Acquisition is subject to customary conditions, including but
not limited to the approval by federal and state bank regulatory authorities and
the shareholders of both NECB and BSW. BSW operates a total of three banking
centers--one each in South Windsor, Vernon and East Hartford, Connecticut. At
December 31, 1997, BSW had assets of approximately $155 million, deposits of
approximately $133 million, loans of approximately $100 million, and
shareholders' equity of approximately $11 million.
The management of NECB and BSW anticipate that the Acquisition will
close in the middle of third quarter of 1998, and will be accounted for using
the "pooling of interests" method of accounting.
Attached hereto as Exhibit 99.1, is a joint press release
announcing the signing of the Agreement and providing certain supplemental
information about NECB and BSW.
Item 7. Exhibit No. Description
99.1 NECB and BSW Press Release dated March 19, 1998.
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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 hereto duly authorized.
Dated: March 21, 1998 NEW ENGLAND COMMUNITY BANCORP, INC.
By: /s/ Anson C. Hall
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Anson C. Hall
Exhibit 99.1--Press Release dated March 19, 1998
Page 1 of 3 pages
[LOGO OMITTED] NEW ENGLAND COMMUNITY BANK
For more information contact:
NEW ENGLAND COMMUNITY BANCORP, INC. BANK OF SOUTH WINDSOR
David A. Lentini John R. Dunn
Chairman, President & CEO President & Chief Executive Officer
860-683-4601 860-644-4412
Anson C. Hall
Vice President & CFO
860-683-4610
FOR IMMEDIATE RELEASE
NEW ENGLAND COMMUNITY BANCORP TO ACQUIRE
BANK OF SOUTH WINDSOR
Windsor CT, March 19, 1998--New England Community Bancorp, Inc. (Nasdaq: NECB)
and Bank of South Windsor (ASE: BSW) today announced a definitive agreement
pursuant to which New England will acquire South Windsor on a stock-for-stock
basis in a tax-free exchange fixed at 1.3204 shares of New England common stock
for each share of South Windsor common stock. Bank of South Windsor, a
Connecticut commercial bank with total assets of $155 million and shareholders'
equity of $10.8 million, operates offices in South Windsor, Vernon and East
Hartford. With the addition of South Windsor, and the previously announced
pending acquisition of Olde Port Bank & Trust, of Portsmouth, New Hampshire, New
England will have $808 million in assets, four community bank subsidiaries and a
total of 18 branch offices.
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Page 2 of 3
The definitive agreement, which has been approved by both institutions' boards
of directors, is subject to the approval of the shareholders of New England and
South Windsor and the appropriate regulatory agencies. New England expects the
transaction to close in the third quarter of 1998.
"The opportunity to join forces with Bank of South Windsor represents an
exciting and important stage in the growth and development of NECB as it becomes
one of the region's leading community-based multibank holding companies," said
David A. Lentini, New England chairman and Chief Executive Officer. "Our banks
have been friendly competitors in the Hartford and Tolland counties for many
years, and we look forward to continuing to move forward together; to provide
excellent service to our customers and communities."
John R. Dunn, President and Chief Executive Officer of Bank of South Windsor,
said, "Bank of South Windsor Directors are very excited about the benefits to
come from this partnership. Our Bank's commitment to enhancing shareholder
value, providing high quality customer service and supporting community
involvement will be further fulfilled as a result of this merger." Barbara
Barbour, Chairwoman of South Windsor, commented that "the Board formed South
Windsor to offer a community-based alternative to meet the banking needs of the
South Windsor and the surrounding communities. We are very confident that this
merger will continue to meet these needs."
Under the terms of the agreement, South Windsor shareholders will receive a
fixed exchange of 1.3204 shares of New England Common Stock for each share of
South Windsor Common Stock. Using New England's closing price on March 18, 1998
of $25.50 per share, the transaction would have a value of $33.67 per share to
South Windsor shareholders and an aggregate transaction value of approximately
$32.8 million. In the event that the average closing price of New England Stock,
for the twenty days ending on the date of final regulatory approval, is less
than $23.48, the exchange ratio will (subject to certain qualifications) be
adjusted to result in the receipt by South Windsor shareholders of New England
shares having a value of $31.00 per share of South Windsor common stock.
The acquisition, which New England expects will be accretive to earnings per
share within twelve months of closing, is expected to be accounted for as a
"pooling of interests." While New England expects to continue to operate all
three Bank of South Windsor offices, because of the two institutions close
proximity it expects to achieve substantial cost reductions in the combined
institution following the closing of the transaction. "We expect some staff
reductions will occur following the closing, however New England has established
an excellent reputation for retention and placement of employees following each
of its past acquisitions" Chairman Lentini said.
New England Community Bancorp, Inc. is a multibank holding company whose
subsidiaries serve communities throughout North Central Connecticut. New England
Bank is headquartered in Windsor, Connecticut. The Equity Bank is located in
Wethersfield, Connecticut. Community Bank is headquartered in Bristol,
Connecticut and Olde Port Bank is located in Portsmouth, N.H.
Bank of South Windsor is a state chartered commercial bank headquartered in
South Windsor, Connecticut with branches in Vernon and East Hartford,
Connecticut.
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SUMMARY DATA TABLE
Information is as of or for the year ended December 31, 1997
(DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
NECB (1) BSW
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Total Assets $652,829 $155,123
Total Loans 441,201 99,947
Allowance for Loan Losses 9,925 2,156
Total Deposits 562,043 132,903
Total Equity 58,149 10,837
Tangible Equity 52,911 10,837
Net Income $7,028(2) $1,221
Earnings per share(diluted) $1.24(2) $1.26
Shares Outstanding 5,727,000 958,000
Book Value Per Share $10.15 $11.31
Equity/Assets 8.91% 7.00%
(1) Includes NECB's pending acquisition of Olde Port Bank.
(2) Excluding merger related charges of $1,750.
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