SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 6, 1997
WACHOVIA CORPORATION
-----------------------------------------
(Exact Name of Registrant as specified in its charter)
NORTH CAROLINA No. 1-9021 No. 56-1473727
- --------------------------------- --------------- --------------------------
(State or other jurisdiction of (Commission (IRS employer
incorporation) File Number) Identification No.)
100 NORTH MAIN STREET, WINSTON-SALEM, NC 27101
191 PEACHSTREET STREET NE, ATLANTA, GA 30303
- ---------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
WINSTON-SALEM 910-770-5000
ATLANTA 404-332-5000
Not applicable
(Registrant's former address of principal executive offices)
<PAGE>
Item 5. Other Events.
On August 6, 1997, Wachovia Corporation, a North Carolina corporation
(the "Registrant"), entered into an Agreement and Plan of Merger by and between
the Registrant and 1st United Bancorp, a Florida corporation ("1st United"), for
a tax-free merger of the two companies pursuant to which each outstanding share
of common stock, par value $0.01 per share, of 1st United would be converted
into an amount between 0.3 and 0.366 of a share of common stock, par value $5.00
per share, of the Registrant (the "Proposed Merger").
This current report on Form 8-K, including the investor materials,
contains certain forward looking statements with respect to the financial
condition, results of operations and business of Wachovia and the combined
company, including statements relating to: (a) the cost savings and accretion to
cash earnings and reported earnings that will be realized from the Proposed
Merger; (b) the impact on revenues of the Proposed Merger; and (c) the
restructuring charges expected to be incurred in connection with the Proposed
Merger. These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated by such forward looking statements include, among others, the
following possibilities: (1) expected costs savings from the Proposed Merger
cannot be fully realized or realized within the expected time frame; (2) costs
or difficulties related to the integration of the businesses of Wachovia and 1st
United are greater than expected; (3) revenues following the Proposed Merger are
lower than expected; (4) competitive pressure among depository institutions
increases significantly; (5) changes in the interest rate environment reduce
interest margins; (6) general economic conditions, either nationally or in the
states in which the combined company will be doing business, are less favorable
than expected; or (7) legislation or regulatory changes adversely affect the
businesses in which the combined company would be engaged.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99.1 Press release dated August 7, 1997 announcing the
Proposed Merger.
99.2 Investor presentation materials used by the Registrant on
August 7, 1997 relating to the Proposed Merger.
-2-
<PAGE>
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 hereunto duly authorized.
Date August 7, 1997
WACHOVIA CORPORATION
By: /s/ Kenneth W. McAllister
Name: Kenneth W. McAllister
Title: Executive Vice President
-3-
<PAGE>
Exhibit Index
99.1 Press release dated August 7, 1997 announcing the Proposed Merger.
99.2 Investor presentation materials used by the Registrant on August 7,
1997 relating to the Proposed Merger.
-4-
Wachovia
- -------------------------------------------------------------------------------
News Announcement
For Additional Information: Wachovia Corporation
Lisa Park, 1st United Bancorp, 561-832-7766 Atlanta, GA 30383
Paul E. Mason, Wachovia, 910-732-6387 Winston-Salem, N.C. 27150
August 7, 1997
FOR RELEASE: Immediately
WACHOVIA, 1ST UNITED BANCORP ANNOUNCE MERGER
Wachovia Corporation today announced that it is has reached a
definitive agreement to acquire 1st United Bancorp, an $820 million-asset
commercial banking company headquartered in Boca Raton, Fla. The agreement has
been approved by the boards of directors of both companies and is subject to the
approval of 1st United's shareholders and appropriate regulatory agencies. The
merger is expected to close by year-end.
1st United Bancorp is the parent of 1st United Bank, a state-chartered
bank that operates 33 full service banking centers in Palm Beach, Martin,
Broward and Brevard counties. It is the largest commercial bank headquartered in
Palm Beach County and specializes in serving individuals and small businesses
within its trade area.
The agreement with 1st United will be structured on a purchase
accounting basis and provides for a tax-free exchange of Wachovia Corporation
common shares for 1st United common shares at a value of $20.875 per share of
1st United, or a purchase price of $222 million. The exchange ratio will be a
minimum of 0.3 and a maximum of 0.366 of a share of Wachovia common stock.
Wachovia intends to repurchase up to approximately 3.5 million of its
outstanding shares in connection with the transaction, which is expected to be
nondilutive to Wachovia's earnings in 1998 and have a positive impact on
earnings in 1999.
Wachovia has provided corporate financial services and residential and
commercial mortgage loans in Florida for many years. This merger represents the
first acquisition of a Florida bank holding company by Wachovia.
Wachovia Chief Executive L. M. Baker Jr. said, "Florida is a state
Wachovia has admired for some time and 1st United is well located in several
extremely attractive markets along
-more-
<PAGE>
Merger Agreement - Page 2
Florida's Atlantic coast. This merger is consistent with Wachovia's intention of
seeking opportunities in strong growth markets. It also provides an initial base
upon which Wachovia can expand its consumer and commercial franchise, offering a
broad array of services to individuals and businesses."
"Since 1st United was formed 10 years ago, our unwavering commitment
has been to provide the best possible services to individuals and businesses in
core markets. We have done that by acquiring those capabilities through internal
growth and through a series of acquisitions. Our commitment remains the same. By
joining forces with Wachovia, we are now able to expand the array of products
and services provided to our clients," said 1st United Chief Executive Warren
S. Orlando.
1st United has granted Wachovia a stock option representing
approximately 19.9 percent of 1st United's outstanding shares. Directors of 1st
United collectively holding more than 20 percent of 1st United's common stock
have agreed to vote in favor of the transaction. 1st United's stock is traded
under the symbol FUBC through the NASDAQ National Market.
In June, Wachovia announced that it had reached definitive agreements
to acquire Central Fidelity Banks Inc., a $10.6 billion-asset bank headquartered
in Richmond, Va., and Jefferson Bankshares Inc., a $2.1 billion-asset bank
headquartered in Charlottesville, Va. Those mergers are expected to be completed
by year-end.
The acquisition of 1st United, combined with the Central Fidelity and
Jefferson mergers, will give Wachovia a retail network totalling more than 800
banking offices and 1,100 ATMs throughout Virginia, the Carolinas, Georgia and
Florida. The mergers also will make Wachovia the 17th largest bank in the
country with assets of more than $60 billion and deposits of more than $39
billion.
Wachovia Corporation, which has dual headquarters in Winston-Salem,
N.C., and Atlanta, currently is the 20th largest banking company in the U.S.
with assets totaling $48.5 billion. U.S. Banker magazine recently rated Wachovia
the No. 1 bank in the country for 1996 among banks with assets of more than $25
billion.
Wachovia Corporation
merger with
1st United Bancorp
August 7, 1997
<PAGE>
This presentation contains certain forward looking statements with respect to
the financial condition, results of operations and business of Wachovia and the
combined company including statements relating to: (a) the cost savings and
accretion to cash earnings and reported earnings that will be realized from the
proposed merger; (b) the impact on revenues of the proposed merger; and (c) the
restructuring charges expected to be incurred in connection with the proposed
merger. These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated by such forward looking statements include, among others, the
following possibilities: (1) expected costs savings from the proposed merger
cannot be fully realized or realized within the expected time frame; (2) costs
or difficulties related to the integration of the businesses of Wachovia and 1st
United are greater than expected; (3) revenues following the proposed merger are
lower than expected; (4) competitive pressure among depository institutions
increases significantly; (5) changes in the interest rate environment reduce
interest margins; (6) general economic conditions, either nationally or in the
states in which the combined company will be doing business, are less favorable
than expected; or (7) legislation or regulatory changes adversely affect the
businesses in which the combined company would be engaged.
-2-
<PAGE>
1st United Overview
- -------------------------------------------------------------------------------
o Largest bank headquartered in Palm Beach County
o Organized in 1987
o Total assets and deposits of $820 million and $750 million,
respectively
o Acquisitions have added ten institutions in Palm Beach, Martin, and
Brevard Counties
o Market focus in smaller commercial and professional consumer segments
o IBES earnings estimates reflect 15% long term growth rate.
-3-
<PAGE>
Strategic Rationale
- -------------------------------------------------------------------------------
o Provides entrance into one of the most attractive consumer markets in
the Southeast
o Alignment with high growth institution
o Significant opportunities for leveraging Wachovia scale and product
breadth
o Attractive utilization of equity capital through share repurchase
o Acquisition of Florida charter permits pursuit of direct banking
initiatives in the state
o Opportunity to experiment with Florida business development strategies
-4-
<PAGE>
Transaction Summary
- -------------------------------------------------------------------------------
Purchase Price: $222 Million
Per Share: $20.875
Exchange Ratio: Floating (Min .30, Max .366)
Price Protection: 10% Collar
Accounting: Purchase
Structure: Tax-Free Exchange
Stock Option Agreement: 19.9%
Director Voting Agreement: 20%+
Shares Issued: 3.5 Million
Shares Repurchased Up to 3.5 Million
Anticipated Closing: 4Q97
-5-
<PAGE>
Deal Economics
- -------------------------------------------------------------------------------
o Accretive to cash and reported EPS in 1998
o One time charges - $3 million pre-tax in 1997
o Expense savings - 20% or $6 million pre-tax
o Base revenue enhancements of 10% or $1 million pre-tax
o Additional revenue enhancements from statewide Florida business
development efforts
-6-
<PAGE>
Transaction Princing(1)
- -------------------------------------------------------------------------------
Book Value 3.07x
Tangible Book 3.60
1st United Earnings Multiples
Adjusted WB Standalone
Transaction Transaction(3) Trading Multiples
----------- -------------- -----------------
1997E EPS(2) 18.8x 13.0x 15.8x
1998E EPS(2) 16.3 11.8 14.0
(1) Includes impact of Seaboard SB acquisition 7/97
(2) IBES median earnings estimate
(3) Adjusted for full implementation of cost savings and revenue enhancements.
Excludes impact of one-time costs and goodwill.
-7-
<PAGE>
Pro Forma Overview
- -------------------------------------------------------------------------------
(Date as of June 30, 1997; Dollars in Millions)
- -------------------------------------------------------------------------------
WACHOVIA(1) 1ST UNITED(2)
- -------------------------------------------------------------------------------
Assets 61,349 747
Loans 41,338 500
Deposits 38,891 670
Equity 4,695 65
Equity/Assets 7.65% 8.76%
Net Income (Year to Date) 405 5
NPAs 132 14
Reserve 535 10
Efficiency Ratio 53.0%(3) 68.9%
Fee Income/Revenues 34.0%(3) 20.8%
(1) includes Jefferson Bankshares and Central Fidelity Banks
(2) excludes Seaboard Savings Bank transaction, closed July, 1997
(3) excludes Virginia franchise
-8-
