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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
DATE OF REPORT: DECEMBER 14, 2000
PEOPLE'S BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-7449 04-3272233
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
545 PLEASANT STREET
NEW BEDFORD, MASSACHUSETTS 02740
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(Address of principal executive offices) (Zip Code)
(508) 991-2601
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Registrant's telephone number, including area code
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ITEM 5. OTHER EVENTS.
As anticipated in its Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarter ended September 30, 2000, People's
Bancshares, Inc. (the "Company") has entered into a formal written agreement
(the "Written Agreement") with the Federal Reserve Bank of Boston (the "Reserve
Bank"). The Written Agreement requires the prior approval of the Reserve Bank
and the Division of Banking Supervision and Regulation of the Board of Governors
of the Federal Reserve System for the Company's subsidiary, People's Savings
Bank of Brockton (the "Bank"), to pay dividends to the Company or for the
Company to pay dividends on its common stock or interest on the subordinated
debentures that the Company issued in 1997 and 2000. The Written Agreement also
requires the Company to obtain prior Reserve Bank approval before repurchasing
or redeeming its stock. In addition, the Written Agreement states that it is the
common goal of the Company and the Reserve Bank to restore and maintain the
financial soundness of the Company and the Written Agreement precludes the
Company from increasing its borrowings, incurring debt or renewing existing debt
without the prior approval of the Reserve Bank. Furthermore, under the terms of
the Written Agreement, the Company has agreed to file a written capital plan
with the Reserve Bank no later than February 2, 2001. The Company is also
required, under the Written Agreement, to maintain a minimum consolidated Tier 1
Leverage Capital ratio of not less than 5.0%. At September 30, 2000, the
Company's consolidated Tier 1 Leverage Capital ratio was 5.50%. The Company also
has agreed, among other matters, to provide quarterly progress reports to the
Reserve Bank concerning actions taken by the Company to achieve and maintain
compliance with the Written Agreement.
With respect to the payment of dividends and interest, while the Company
intends to seek approval for such payments from the Reserve Bank, (and has
already submitted requests to the Reserve Bank for approvals to pay the
scheduled interest payments payable on December 30, 2000 and January 19, 2001),
as previously disclosed, there is no assurance that approval to pay all or any
portion of such dividends and/or interest will be received. In the event that
the required approvals are not received, the Company, to the extent applicable,
will reduce or eliminate dividends on its common stock and defer the payment of
interest on the debentures (to the extent required) to the relevant trusts
(pursuant to the terms of the instruments under which they were organized), and
the trusts will defer (to the extent required) paying dividends on the trust
preferred shares issued by them. During the term of any such deferral,
distributions to which holders are entitled will continue to accrue interest or
dividends at the stated annual rate, plus additional interest of 2% compounded
quarterly, on any unpaid distributions in accordance with the terms of the
underlying securities.
In a separate, but related matter that was previously disclosed, the Bank
is a party to an informal agreement designated a Memorandum of Understanding
(the "Memorandum") with the Massachusetts Commissioner of Banks and the Federal
Deposit Insurance Corporation. The Memorandum provides that the Bank will
develop plans to reduce its holdings in trust preferred securities and achieve
and subsequently maintain a Tier 1 Leverage Capital ratio of 6.5%. The Bank's
Total Tier 1 Leverage Capital at September 30, 2000 was 6.24%. Additional
provisions of the Memorandum require the Bank to develop revised strategic and
capital plans, improve the quality of the investment portfolio and investment
administration, improve liquidity and develop a plan for reducing interest rate
risk exposure.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits
10.1 Written Agreement, dated December 5, 2000, between People's
Bancshares, Inc. and The Federal Reserve Bank of Boston.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PEOPLE'S BANCSHARES, INC.
/s/ James K. Hunt
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James K. Hunt
Executive Vice President/Finance &
Administration and Chief Financial Officer
Dated: December 14, 2000
LIBC\1064103.2
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Written Agreement, dated December 5, 2000, between People's
Bancshares, Inc. and The Federal Reserve Bank of Boston.
