As filed with the Securities and Exchange Commission on April 1, 1999
Registration No. 333-74059
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PROGRESS FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 6711 23-2413363
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorporation Industrial Classification Identification No.)
or organization) Code No.)
Four Sentry Parkway
Suite 200
Blue Bell, Pennsylvania 19422-0764
(610) 825-8800
(Address, including zip code and telephone number,
including area code, of Registrant's
principal executive offices)
W. Kirk Wycoff
Chairman, President and Chief Executive Officer
Progress Financial Corporation
Four Sentry Parkway
Suite 200
Blue Bell, Pennsylvania 19422-0764
(610) 825-8800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with a copy to:
Raymond A. Tiernan, Esq.
Kenneth B. Tabach, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
- --------------------------------------------------------------------------------
Subject to Completion, Dated April 1, 1999
PROSPECTUS
54,003 Shares
PROGRESS FINANCIAL CORPORATION
Common Stock
This Prospectus relates to the offering of up to 54,003 shares of common
stock, par value $1.00 per share, of Progress Financial Corporation ("Progress,"
"us" or "we") which may be offered for the account of selling stockholders. The
shares of stock being offered were issued to the selling stockholders in
connection with the acquisition of Primary Capital Corp by Progress pursuant to
the exemption from the registration requirements of the Securities Act of 1933
by Section 4(2). Progress will not receive any of the proceeds from the sale of
shares of stock being offered by the selling stockholders.
The shares of stock may be offered and sold by the selling stockholders
directly or through broker-dealers who may act solely as agents, or who may
acquire shares as principals. The distribution of the shares of stock may be
effected in one or more transactions that may take place through the Nasdaq
Stock Market. Such transactions may be through block trades or ordinary broker's
transactions, or through privately-negotiated transactions, or in accordance
with Rule 144 under the Securities Act, or through a combination of any such
method of sale, at market prices or at negotiated prices. Usual and customary or
negotiated brokerage fees or commissions may be paid by the selling stockholders
in connection with such sales.
The common stock is traded on the Nasdaq Stock Market's National Market
under the symbol "PFNC." On March 31, 1999, the closing price for the common
stock was $____ per share.
See "Risk Factors" beginning on page 2 for a discussion of certain factors
that should be considered carefully by prospective investors in the common stock
offered.
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Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
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The securities offered hereby are not deposits or savings accounts and are
not insured by the Federal Deposit Insurance Corporation or any other government
agency or instrumentality.
The date of this Prospectus is April __, 1999
<PAGE>
RISK FACTORS
Prospective investors should consider carefully the following factors
in addition to the other information included or incorporated by reference in
this Prospectus before making an investment in the common stock.
Our increased emphasis on commercial business, construction, commercial real
estate and consumer lending and lease financing results in higher risks of
losses.
Since 1996, we have increased our emphasis on commercial business,
residential construction, commercial real estate (primarily multi-family
residential), consumer lending and lease financing. Such lending entails
different and significant risks when compared to traditional single-family
residential lending.
Commercial business lending often involve large loan balances to
single borrowers and the payment experience on such loans is typically dependent
on the successful operation of the project or the borrower's business.
Commercial real estate lending can also be significantly affected by supply and
demand conditions in the local market for apartments, offices, warehouses or
other commercial space. Construction financing is generally considered to
involve a higher degree of risk of loss than long-term financing on improved,
owner-occupied real estate. Risk of loss on a construction loan is dependent
largely upon the accuracy of the initial estimate of the property's value at
completion of construction or development and the estimated cost (including
interest) of construction. During the construction phase, a number of factors
could result in delays and cost overruns. If the estimate of value proves to be
inaccurate, we may be confronted, at or prior to the maturity of the loan, with
a project, when completed, having a value which is insufficient to assure full
repayment. Consumer lending is also generally considered to involve additional
credit risk than traditional mortgage lending because of the type and nature of
the collateral and, in certain cases, the absence of collateral. Lease financing
is also considered to involve a higher degree of credit risk than single-family
residential lending due primarily to the relatively rapid depreciation of assets
securing leases such as equipment, phone systems, computers, automobiles and
furniture. In addition, we are subject to increased risk of loss on the
disposition of the residual value of the equipment underlying its leases. For
many of the leases, we retain the residual value of the leased property upon
expiration of the lease. In the event that the residual value is less than
provided for in the lease, we may have a loss related to the disposition of such
property.
<PAGE>
Our increased emphasis on lending to the technology sector results in higher
risk of losses.
Progress Bank's specialty lending division provides customized
financial services to Mid-Atlantic-based companies, primarily in the technology,
healthcare and insurance industries. The specialty lending division focuses on
lending to companies within the technology sector. While we seek relationships
with companies that have already received initial venture capital and have
reported annual revenues of at least $1.0 million, many of these companies are
still in the initial phase of operations and have limited operating histories.
Accordingly, because these companies do not have a history of profitable
operations and because there is no assurance that such companies will be
successful in the long term, such lending involves a higher degree of risk than
residential or traditional commercial business lending. In addition, we have
also committed to invest up to $3.3 million in Progress Capital Fund, L.P., a
$9.1 million fund managed by a subsidiary, which commenced operations in late
1997 and provides subordinated debt financing to early-stage Mid-Atlantic based
technology companies. Because of the start-up and speculative nature of the
companies that the fund targets, such investment involves a higher degree of
risk than traditional equity investments.
Loss of key personnel could have adverse effects.
W. Kirk Wycoff, President and Chief Executive Officer of Progress,
maintains a significant role in the development and management of our business.
In addition, we have assembled senior management personnel primarily with
commercial banking experience to run our separate business operations, including
Robert J. Bifolco, Senior Vice President of Commercial Banking, Steven Hobman,
Senior Vice President for Specialized Lending, Eric J. Morgan, Senior Vice
President for Credit and Administration, Richard T. Powers, Senior Vice
President and Chief Operations Officer, Michael B. High, Senior Vice President
and Chief Financial Officer and Donald M. DeMaio, Senior Vice President of
Retail Division as well as H. Wayne Griest, Chairman and Chief Executive Officer
of Progress Realty Advisors, Inc., our mortgage banking subsidiary, and George
R. Mark, Executive Vice President of Progress, whose responsibilities include
oversight of equipment leasing, telemarketing, insurance and financial planning
services, and development of new business services. While we have entered into
an employment agreement with Mr. Wycoff, we do not have employment agreements
with our other executive officers. However, certain officers have entered into
termination and change of control agreements and have been granted stock options
to purchase common stock.. The loss of services of Mr. Wycoff or other senior
executives could have an adverse effect on our operations.
Changes in interest rates could adversely effect earnings.
Our operations are substantially dependent on net interest income,
which consists of the difference between the interest income earned on its
interest-earning assets and the interest expense paid on its interest-bearing
liabilities. Like most financial institutions, our earnings are affected by
changes in market interest rates and other economic factors beyond our control.
If an institution's interest earning assets have shorter effective maturities
than its interest bearing liabilities, the yield on the institution's interest
earning assets generally will adjust more rapidly than the cost of its interest
bearing liabilities and as a result, the institution's net interest income
generally would be adversely affected by material and prolonged decreases in
interest rates and positively affected by comparable increases in interest
rates.
<PAGE>
In addition to affecting interest income and expense, changes in
interest rates also can affect the market value of our interest-earning assets,
which are comprised of fixed and adjustable-rate instruments. Generally, the
market value of fixed-rate instruments fluctuates inversely with changes in
interest rates. At December 31, 1998, we had $12.4 million of investment
securities which were classified as held to maturity. Such designation
effectively restricts our ability to sell such assets in order to meet its
liquidity needs or in response to increases in interest rates. Generally, the
reclassification and sale of any of such assets could result in the remainder of
our portfolio of investment and mortgage-backed securities classified as held to
maturity being reclassified as available for sale. Securities classified as
available for sale must be reported at fair value, with unrealized gains or
losses being reported as a component of comprehensive income. Our investment and
mortgage-backed securities (including securities classified as available for
sale) had an aggregate carrying value and market value of $176.8 million and
$176.9 million, respectively, at December 31, 1998.
Changes in interest rates also can affect the average life of loans and
mortgage-related securities. Decreases in interest rates generally result in
increased prepayments of loans and mortgage-backed securities, as borrowers
refinance to reduce borrowing costs. Under these circumstances, we are subject
to reinvestment risk to the extent that it is not able to reinvest such
prepayments at rates which are comparable to the rates on the maturing loans or
securities. A significant increase in the level of interest rates may also have
an adverse effect on the ability of certain of our borrowers with
adjustable-rate loans to repay their loans.
Failure of computer systems to recognize the year 2000 could adversely affect
our operations.
The year 2000 issue concerns the potential impact of historic computer
software code that utilizes only two digits to represent the calendar year (i.e.
"98" for "1998"). Software so developed, and not corrected, could produce
inaccurate or unpredictable results commencing upon January 1, 2000, when
current and future dates present a lower two digit number than dates from the
prior century. Similar to most financial service providers, we are significantly
subject to the potential impact of the year 2000 issue due to the nature of
financial information. Potential areas which may be impacted include matters
relating to software, computer hardware, and other equipment both within our
direct control and outside of our ownership, yet with which we interface
electronically or operationally. Financial institution regulators have
intensively focused upon year 2000 exposures, issuing guidance concerning the
responsibilities of senior management and directors. Year 2000 testing and
certification is being addressed as a key safety and soundness issue in
conjunction with regulatory exams.
<PAGE>
Competition within the our market area could effect profitability.
Competition in the banking and financial services industry is intense.
In our market area, we compete with commercial banks, savings institutions,
mortgage brokerage firms, credit unions, finance companies, mutual funds,
insurance companies, and brokerage and investment banking firms operating
locally and elsewhere. Many of these competitors have substantially greater
resources and lending limits than we do and may offer certain services that we
do not or cannot provide. Our profitability depends upon its continued ability
to successfully compete in its market area. However, in order to maintain its
competitive position, we may be required to reduce rates charged on its various
lending products while maintaining its rate paid on its deposit liabilities (its
principal source of funds), which could result in a reduction in our interest
rate spread and interest rate margin, and which would adversely affect its
profitability.
No assurance we will continue to pay dividends.
We suspended dividend payments on our common stock after the second
quarter of 1990 in order to conserve our capital resources in light of operating
losses and the inability of Progress Bank to meet its risk-based capital
requirement at the time. However, due to an improvement in our results of
operations and net proceeds from our stock offering in 1996, we initiated a
quarterly cash dividend policy of $.02 per share beginning with the third
quarter of 1996, which was increased to $.03 per share in the third quarter of
1997 and $.04 per share in the third quarter of 1998. Dividends are subject to
determination and declaration by the Board of Directors in its discretion, which
take into account our consolidated financial condition and results of
operations, tax considerations, industry standards, economic conditions,
statutory and regulatory restrictions, general economic conditions and other
factors. There can be no assurance that dividends will not be reduced or
eliminated in future periods. Our ability to pay dividends on our common Stock
depends on our receipt of dividends from Progress Bank.
Anti-takeover Provisions Could Discourage Takeover Attempts.
Certain provisions of our Certificate of Incorporation and Bylaws and
Delaware law as well as our shareholder rights plan, could have the effect of
discouraging non-negotiated takeover attempts which certain stockholders might
deem to be in their interest and making it more difficult for our stockholders
to remove members of its Board of Directors and management. In addition, various
federal laws and regulations could affect the ability of a person, firm or
entity to acquire us or shares of our common stock.
<PAGE>
Certain statements contained or incorporated by reference herein are
not based on historical facts and are "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. These forward-looking statements, which are based on various assumptions
(some of which are beyond Progress' control), may be identified by reference to
a future period(s) or by the use of forward-looking terminology, such as
"anticipate," "believe," "commitment," "consider," "continue," "could,"
"encourage," "estimate," "expect," "intend," "may," "plan," "present,"
"propose," "prospect," "will," future or conditional verb tenses, similar terms,
variations on such terms or negatives of such terms. Although Progress believes
that the anticipated results or other expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can give no
assurance that those results or expectations will be attained. Actual results
could differ materially from those indicated in such statements due to risks,
uncertainties and changes with respect to a variety of factors, including, but
not limited to, those described below and other factors generally affecting the
banking industry. Some, but not all, of these risks are summarized below as well
as in Progress' reports and filings with the Commission, including its periodic
reports under the Exchange Act. Progress does not undertake, and specifically
disclaims any obligation, to publicly release the results of any revisions which
may be made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
WHERE YOU CAN FIND MORE INFORMATION
Progress files annual, quarterly and current reports, proxy statements
and other information with the Securities and Exchange Commission. You may read
and copy any reports, proxy statements or other information filed by us at the
Commission's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. You can request copies of these documents, upon payment of a
duplicating fee, by writing to the Commission. Please call the Commission at
1-800-SEC-0330 for further information on the operation of the Commission's
public reference rooms. Our filings with the Commission are also available to
the public from document retrieval services and at the Commission Internet
website (http://www.sec.gov).
We have filed with the Commission a Registration Statement on Form S-3
under the Securities Act. This Prospectus is a part of the Registration
Statement. As permitted by the Securities Act, this Prospectus does not contain
all of the information you can find in the Registration Statement. The
Registration Statement is available for inspection and copying as set forth
above.
<PAGE>
The Commission allows us to "incorporate by reference" into this
Prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the Commission. The
information incorporated by reference is considered to be part of this
Prospectus, except for any information superseded by information contained in
later-filed documents incorporated by reference in this Prospectus. Progress
incorporates by reference the documents filed by it with the Commission listed
below and any future filings made by it with the Commission prior to the
termination of the offering made hereby under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act.
Company Filings (File No. 0-14815) Period/Date
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Annual Report on Form 10-K Year ended December 31, 1998
Current Report on Form 8-K Filed on March 26, 1999
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Progress Financial Corporation
Four Sentry Parkway, Suite 200
Blue Bell, Pennsylvania 19422-0764
Attention: Michael B. High
(610) 825-8800
You should rely only on the information contained or incorporated by
reference in this Prospectus. We have not authorized anyone else to provide you
with information that is different from that which is contained in this
Prospectus. Moreover, no offer of the Common Stock is being made in any state
where the offer is not permitted. The information contained in this Prospectus
speaks only as of its date unless the information specifically indicates that
another date applies.
<PAGE>
PROGRESS FINANCIAL CORPORATION
Progress is a Delaware corporation headquartered in Blue Bell,
Pennsylvania. Progress is a unitary thrift holding company and the sole
stockholder of Progress Bank, a federally-chartered savings bank, which has been
engaged in the thrift business since 1878. The Bank conducts its business
through eight banking offices located in Montgomery County, one banking office
in Delaware County, one banking office in Chester County and one banking office
in the Andorra section of Philadelphia, in southeastern Pennsylvania. Unless the
context otherwise requires, references herein to Progress include the Bank. At
December 31, 1998, Progress had total consolidated assets of $647.4 million,
total consolidated liabilities of $590.8 million, including total consolidated
deposits of $406.5 million, corporation-obligated mandatorily redeemable capital
securities of subsidiary trust holding solely junior subordinated debentures of
Progress of $15.0 million and total consolidated stockholders' equity of $41.6
million.
Progress' current business strategy is to operate as a profitable,
diversified financial institution providing a full range of banking services
with an emphasis on commercial real estate and commercial business loans to
small and medium size businesses, as well as residential construction and
consumer lending, funded primarily by customer deposits. As a complement to this
core business, Progress has expanded its business activities to include:
equipment leasing; insurance and financial planning; commercial mortgage
banking; asset management; managing a fund which provides subordinated debt
financing primarily to technology companies in the Mid-Atlantic region; and
communications and telemarketing, which provide a steady source of fee income.
As a result of increased acquisitions of small to medium-sized financial
institutions by large bank holding companies in southeastern Pennsylvania,
Progress believes that there is a significant market opportunity for the Bank to
provide a full range of commercial banking services to small to middle- market
commercial customers seeking personalized service that is generally unavailable
to such customers at larger regional and national institutions.
Historically, the principal business of Progress consisted of
attracting deposits from the general public through its branch office network
and using such deposits to originate loans secured by first mortgage liens on
existing single-family residential real estate and existing multi-family
residential and commercial real estate as well to originate construction loans
(which included land acquisition and development loans). Prior to 1995, such
lending activities comprised, in the aggregate, at least 80% of Progress' total
loan originations. Beginning in 1995, Progress started to change its focus and
to modify its operations to become more like a commercial bank. Progress'
emphasis shifted to commercial business, commercial real estate and construction
lending and equipment leasing, with a focus on providing such banking services
to small to medium- sized businesses, including companies in the technology
sector. Progress' shift in focus to providing a full range of commercial banking
services also coincided with the recent acquisitions of small to medium-sized
banking institutions by larger bank holding companies and the consolidation in
the banking industry which has limited the number of lenders available to small
commercial borrowers. Since 1995, Progress has not emphasized residential
lending and has only originated a limited amount of single-family residential
mortgage loans.
<PAGE>
Progress also invests in mortgage-backed securities, including
securities which are insured or guaranteed by the U.S. Government and agencies
thereof, and other similar investments permitted by applicable laws and
regulations. In addition, the Bank is involved in real estate development and
related activities, through its subsidiaries, primarily to facilitate the
completion and sale of certain property held as real estate owned.
The principal sources of funds for Progress' activities are deposits,
amortization and repayment of loans, proceeds from sales of assets classified as
available for sale, net savings inflows and advances from the Federal Home Loan
Bank of Pittsburgh. Progress' principal sources of revenues are interest and
other payments on loans, including origination and servicing fees, interest on
investments and mortgage-backed securities, service charges on deposits, gains
(losses) from mortgage banking activities and from the sale of loans and
mortgage-backed securities classified as available for sale and other fee
income. Its principal expenses are interest paid on deposits, advances from the
FHLB of Pittsburgh and other borrowings, provisions for possible loan and lease
losses and real estate owned, personnel, occupancy and equipment, and other
administrative expenses.
Progress, as a registered thrift holding company, is subject to
examination and regulation by the Office of Thrift Supervision and is subject to
various reporting and other requirements of the Commission. Progress Bank, as a
federally chartered savings bank, is subject to comprehensive regulation and
examination by the OTS, as its chartering authority and primary regulator, and
by the Federal Deposit Insurance Corporation, which administers the Savings
Association Insurance Fund, which insures the Bank's deposits to the maximum
extent permitted by law.
Progress Bank is a member of the FHLB of Pittsburgh, which is one of
the 12 regional banks which comprise the FHLB System. The Bank is further
subject to regulations of the Board of Governors of the Federal Reserve System
governing reserves required to be maintained against deposits and certain other
matters.
Progress' principal executive offices are located at Four Sentry
Parkway, Suite 200, Blue Bell, Pennsylvania 19422-0764, and its telephone number
is (610) 825-8800.
USE OF PROCEEDS
Progress will not receive any of the proceeds from sales of stock being
offered. See "Selling Stockholders" for a list of those persons who will receive
the proceeds from such sales.
SELLING STOCKHOLDERS
This Prospectus covers the offer and sale by certain of the selling
stockholders of the Common Stock issued to them in connection with Progress'
acquisition of the Primary Capital Corp. The selling stockholders received an
aggregate of 54,003 shares of common stock pursuant to this acquisition.
Progress has agreed that it will cause to be registered under the Securities Act
the resale of all of such common stock received by the selling stockholders.
<PAGE>
The table below sets forth each selling stockholder's name, the maximum
number of shares of common stock offered hereby by such selling stockholder and
the number of shares of common stock to be held by such selling stockholder
after the offering.
Maximum Number of Number of Shares
Shares to be Sold Owned After the
Name in the Offering Offering(1)
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Christopher L. Campbell 26,461 0
Michael A. Basile, Jr. 27,542 0
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(1) Because the selling stockholders may sell all, some or none of the stock
offered, there can be no assurance as to the number of shares of stock which
will be held by each selling stockholder upon completion of the offering. Even
if no shares of stock are sold, however, no selling stockholder would hold one
percent or more of the outstanding common stock upon completion of the offering
(based on the total number of shares of common stock held by the selling
stockholders as of the date hereof).
DESCRIPTION OF CAPITAL STOCK
Progress is currently authorized to issue up to 12,000,000 shares of
common stock, par value $1.00 per share, and 1,000,000 shares of preferred
stock, par value $.01 per share. At December 31, 1998, Progress had 5,263,000
shares of common stock issued and outstanding and no shares of preferred stock
issued or outstanding. The capital stock of Progress Financial Corporation does
not represent or constitute a savings account or deposit of Progress Financial
Corporation or Progress Bank and is not insured by the FDIC or any other
governmental agency.
Common Stock
General. Each share of common stock has the same relative rights and is
identical in all respects with each other share of common stock. The common
stock is not subject to call for redemption and, upon receipt by Progress of the
full purchase price therefor, each share of common stock offered hereby will be
fully paid and non-assessable.
Voting Rights. Except as provided in any resolution or resolutions
adopted by the Board of Directors establishing any series of preferred stock,
the holders of Common Stock possess exclusive voting rights in Progress. Each
holder of common stock is entitled to one vote for each share held on all
matters voted upon by stockholders. Stockholders are not permitted to cumulate
votes in elections of directors.
Dividends. The holders of the common stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out of
funds legally available therefor.
<PAGE>
Pre-emptive Rights. Holders of the common stock do not have any
pre-emptive rights with respect to any shares which may be issued by Progress in
the future; Progress, therefore, may sell shares of common stock without first
offering them to its then-existing stockholders.
Liquidation. In the event of any liquidation, dissolution or winding up
of Progress, the holders of the common stock would be entitled to receive, after
payment of all debts and liabilities of Progress, all assets of Progress
available for distribution, subject to the rights of the holders of any
preferred stock which may be issued with a priority in liquidation or
dissolution over the holders of the common stock.
Preferred Stock
The Board of Directors is authorized to issue preferred stock and to
fix and state voting powers, designations, preferences or other special rights
of such shares and the qualifications, limitations and restrictions thereof. The
preferred stock may be issued in distinctly designated series, may be
convertible into common stock and may rank prior to the common stock as to
dividend rights, liquidation preferences, or both.
The authorized but unissued shares of preferred stock (as well as the
authorized but unissued and unreserved shares of common stock) are available for
issuance in future mergers or acquisitions, in a future public offering or
private placement or for other general corporate purposes. Except as otherwise
required to approve the transaction in which the additional authorized shares of
preferred stock would be issued, stockholder approval generally would not be
required for the issuance of these shares. Depending on the circumstances,
however, stockholder approval may be required pursuant to the requirements for
continued listing of the common stock on the Nasdaq National Market System or
the requirements of any exchange on which the common stock may then be listed.
Warrants to Purchase Common Stock
As of December 31, 1998, Progress had warrants to purchase 303,183
shares of common stock outstanding (as adjusted for subsequent stock dividends).
The following is a summary of the material provisions of the warrants.
Progress issued 12 units consisting of subordinated debt and warrants
in a private placement on June 30, 1994, with each unit consisting of $250,000
of subordinated debt and warrants to purchase 27,562 shares of common stock (as
adjusted for subsequent stock dividends). Currently, there are 12 holders of the
warrants. Four of the directors and executive officers of Progress own 82,686
warrants. The remaining 220,497 warrants are held by eight individuals or
entities.
Each warrant entitles the holder thereof to purchase one share of the
common stock at an exercise price of $5.44 (as adjusted for subsequent stock
dividends). The warrants may be exercised, in whole or in part, until 5:00 p.m.,
Eastern Time, on June 30, 1999.
<PAGE>
The exercise price is subject to adjustment upon the occurrence of
certain events, including the issuance of common stock as a dividend or
distribution on the common stock and subdivisions, combinations and certain
reclassifications of common stock. No adjustment in the exercise price will be
required unless such adjustment would require a change of at least 1% of the
exercise price then in effect; provided, however, that any adjustment that would
otherwise be required to be made shall be carried forward and taken into account
in any subsequent adjustment.
Preferred Stock Purchase Rights
In April 1990, Progress' Board of Directors declared a dividend
distribution of one preferred stock purchase right for each outstanding share of
common stock. Each right entitles each registered holder, upon the occurrence of
certain events, to purchase from Progress a unit consisting of one one-hundredth
of a share of Series A Junior Participating Preferred Stock, par value $.01 per
share, at a purchase price of $40.00 per rights unit, subject to adjustment. The
description and terms of the rights are set forth in a rights agreement between
Progress and American Stock Transfer and Trust Company, as rights agent.
The rights will separate from the common stock and be distributed on a
date which will occur upon the earlier of (i) ten business days following a
public announcement that a person or group of affiliated or associated persons,
other than employee benefit plans of Progress, has acquired beneficial ownership
of 20% or more of the outstanding shares of common stock, or (ii) ten business
days (or such later date as may be determined by action of the Board of
Directors of Progress prior to such time as any person becomes an acquiring
person) following the commencement of a tender offer or exchange offer that
would result in a person or group beneficially owning 20% or more of such
outstanding shares of common stock.
Until the distribution date, (i) the rights will be evidenced by the
common stock certificates and will be transferred with and only with such common
stock certificates, (ii) new common stock certificates issued after the rights
were declared will contain a notation incorporating by reference the rights
agreement and (iii) the surrender for transfer of any certificate for common
stock outstanding will also constitute the transfer of the rights associated
with the common stock represented by such certificate. As soon as practicable
after the distribution date, separate certificates representing the rights will
be mailed to the holders of record of the common stock as of the close of
business on the distribution date and, thereafter, the separate rights
certificates alone will represent the rights. The rights will not be exercisable
until the distribution date and will cease to be exercisable at the close of
business on May 11, 2000, unless the rights are earlier redeemed by Progress as
described below.
<PAGE>
Unless the rights are redeemed earlier pursuant to the rights
agreement, in the event that, at any time following the stock acquisition date,
(i) Progress is involved in a merger or other business combination in which
Progress is not the surviving corporation or in which the common stock of
Progress is changed into or exchanged for other securities of any other person
or cash or any other property, or (ii) 50% or more of Progress' assets or
earning power is sold or transferred, each holder of a Right shall thereafter
have the right to receive, upon exercise and payment of the purchase price,
common stock of the acquiring company having a value equal to two times the
exercise price of the right. In addition, unless the rights are redeemed
pursuant to the rights agreement, in the event that any person or group of
affiliated or associated persons becomes an acquiring person, the rights
agreement provides that proper provision shall be made so that each holder of a
right will thereafter have the right to receive, upon exercise and payment of
the purchase price, common stock (or, in certain circumstances, cash, property
or other securities of Progress) having a value equal to two times the exercise
price of the right. The events set forth in this paragraph are referred to in
the rights agreement as a "Triggering Event." Following the occurrence of a
Triggering Event, any rights that are, or (under certain circumstances) were,
beneficially owned by any acquiring person shall immediately become null and
void.
At any time after a person becomes an acquiring person, Progress may
exchange all or part of the rights (other than rights which previously have been
voided as set forth above) for shares of common stock at an exchange ratio of
one share per right, as such may be appropriately adjusted to reflect any stock
split or similar transaction.
In general, Progress may redeem the rights in whole, but not in part,
at any time until ten days following the stock acquisition date, at a price of
$.01 per right. Immediately upon the action of the Board of Directors ordering
redemption of the rights, the rights will terminate and the only right of the
holders of rights will be to receive the redemption price. Until a right is
exercised or exchanged, the holder thereof, as such, will have no rights as a
stockholder of Progress, including the right to vote or to receive dividends.
Preferred stock purchasable upon exercise of the rights will not be
redeemable. Each share of preferred stock will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 100 times the dividend declared per share of common
stock. In the event of liquidation, the holders of the preferred stock will be
entitled to a preferential liquidation payment equal to the greater of $100 per
share or an aggregate payment of 100 times the payment made per share of common
stock. Each share of preferred stock will have 100 votes, voting together with
the common stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of common stock are exchanged, each share of
preferred stock will be entitled to receive 100 times the amount received per
share of common stock.
The rights may have certain antitakeover effects. The rights would
cause substantial dilution to a person or group that acquires 20% or more of the
outstanding shares of common stock of Progress if a Triggering Event thereafter
occurs without the rights having been redeemed or in the event of an exchange.
However, the rights should not interfere with any merger or other business
combination approved by the Board of Directors because the rights are redeemable
under certain circumstances.
<PAGE>
Transfer Agent
The transfer agent and registrar for the common stock is American Stock
Transfer & Trust Company, New York, New York.
PLAN OF DISTRIBUTION
Each of the selling stockholders may sell his, her or its shares of
stock offered directly or through broker-dealers who may act solely as agents,
or who may acquire shares as principals. The distribution of the shares of stock
may be effected in one or more transactions that may take place on the Nasdaq
Stock Market, including block trades or ordinary broker's transactions, or
through privately-negotiated transactions, or in accordance with Rule 144 under
the Securities Act (or any other applicable exemption from registration under
the Securities Act), through a combination of any such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
negotiated brokerage fees or commissions may be paid by the selling stockholders
in connection with such sales. Sales of the stock may be effected to cover
previous short sales of common stock.
The selling stockholders may affect transactions by selling the stock
directly or through broker-dealers acting either as principal or as agent, and
such broker-dealers may receive compensation in the form of usual and customary
or negotiated discounts, concessions or commissions from the selling
stockholders.
The aggregate proceeds to the selling stockholders from the sale of the
stock will be the purchase price of the stock sold less the aggregate agents'
commissions, if any, and other expenses of issuance and distribution not borne
by Progress. The selling stockholders and any dealers or agents that participate
in the distribution of the stock may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the stock by them
and any commissions received by any such dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
Each selling stockholder and any other person participating in a
distribution of the stock will be subject to applicable provisions of the
Exchange Act, including Regulation M and Rules 101 through 105 thereunder.
Regulation M governs the activities of persons participating in a distribution
of securities and, consequently, may restrict certain activities of, and limit
the timing of purchases and sales of stock by, selling stockholders and other
persons participating in a distribution of the stock. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distribution, subject to exceptions or exemptions. All of
the foregoing may affect the marketability of the securities offered hereby.
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock being offering will be
passed upon for Progress by the law firm of Elias, Matz, Tiernan & Herrick
L.L.P., Washington, D.C.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference from Progress' Annual Report on Form 10-K for the year ended
December 31, 1998 have been audited by PricewaterhouseCoopers LLP, independent
certified public accountants, as stated in their report, which is incorporated
herein by reference, and has been so incorporated in reliance upon the report of
such firm given upon its authority as experts in accounting and auditing.
<PAGE>
- ------------------------------------------------- ----- ------------------------
No dealer, salesman or any other
person has been authorized to give any
information or to make any representation
not contained in this Prospectus, and,
if given or made, such information and
representation must not be relied upon as
having been authorized by 54,003 SHARES
Progress, a selling stockholder or any
other person. This Prospectus does not
constitute an offer to sell or a solicitation
of an offer to buy any of the securities
offered hereby in any state to any person
to whom it is unlawful to PROGRESS FINANCIAL CORPORATION
make such offer in such state. Neither
the delivery of this Prospectus nor any
sales made hereunder shall, under any
circumstances, create any implication that
there has been no change in the affairs
of Progress since the COMMON STOCK
date hereof.
-------------
PROSPECTUS
-------------
TABLE OF CONTENTS
Page
Risk Factors.......................... 2
Where You Can Find More Information... 6
Progress Financial Corporation......... 8
Use of Proceeds....................... 9
Selling Stockholders.................. 9 April __, 1999
Description of Capital Stock........... 10
Plan of Distribution................... 14
Legal Matters.......................... 15
Experts................................ 15
- ------------------------------------------------- ----- ---------------------
<PAGE>
II-4
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits and Financial Statement Schedules.
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) List of Exhibits:
Exhibit No. Exhibit Location
- ----------- ------- --------
4(a) Specimen Common Stock certificate (1)
4(b) Specimen Preferred Stock Purchase Rights Certificate (2)
5 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. *
regarding legality of securities being registered
23(a) Consent of Elias, Matz, Tiernan & Herrick L.L.P. --
(contained in the opinion included as Exhibit 5)
23(b) Consent of PricewaterhouseCoopers LLP **
24 Powers of Attorney (included in the signature page to the --
initial filing of this Registration Statement)
* Previously filed.
** Filed hereto.
(1) Exhibit is incorporated by reference to the Registrant's Registration
Statement on Form S-8 (File No. 33-10160)filed with the Commission on
November 13, 1986.
(2) Exhibit is incorporated by reference to the Registrant's Registration
Statement on Form 8-A filed with the Commission on April 30, 1990.
(b) Financial Statement Schedules.
No financial statement schedules are filed because the required
information is not applicable or is included in the consolidated financial
statements or related notes.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Whitpain, Commonwealth of Pennsylvania on the
31st of March 1999.
PROGRESS FINANCIAL CORPORATION
/s/ W. Kirk Wycoff
- -----------------------------------------
By:
W. Kirk Wycoff
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ W. Kirk Wycoff Date: March 31, 1999
- ----------------------------------------
W. Kirk Wycoff
Chairman, President and Chief Executive
Officer (principal executive officer)
/s/ Michael B. High Date: March 31, 1999
- ----------------------------------------
Michael B. High
Senior Vice President and Chief Financial
Officer (principal financial and accounting officer)
/s/ William O. Daggett, Jr. * Date: March 31, 1999
- ----------------------------------------
William O. Daggett, Jr. *
Director
/s/ Joseph R. Klinger * Date: March 31, 1999
- ----------------------------------------
Joseph R. Klinger *
Director
/s/ John E. F. Corson * Date: March 31, 1999
- ----------------------------------------
John E. F. Corson *
Director
/s/ Jevin J. Silverang * Date: March 31, 1999
- ----------------------------------------
Kevin J. Silverang *
Director
/s/ Paul M. LaNoce * Date: March 31, 1999
- ----------------------------------------
Paul M. LaNoce *
Director
/s/ William L. Mueller * Date: March 31, 1999
- ----------------------------------------
William L. Mueller *
Director
/s/ Charles J. Tornetta * Date: March 31, 1999
- ----------------------------------------
Charles J. Tornetta *
Director
/s/ Janes E. Paroo * Date: March 31, 1999
- ----------------------------------------
Janet E. Paroo *
Director
/s/ H. Wayne Griest * Date: March 31, 1999
- ----------------------------------------
H. Wayne Griest *
Director
Date: March __, 1999
- ----------------------------------------
A. John May, III
Director
- ---------------
*By W. Kirk Wycoff, attorney-in-fact.
<PAGE>
PricewaterhouseCoopers
2400 Eleven Penn Center
Philadelphia PA 19103
Telephone (215) 963 8000
Facsimile (215) 963 8700
Direct phone (410) 783-8832
Direct fax (410) 783-7612
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Progress Financial Corporation on Form S-3 of our report dated January 22, 1999,
on our audits of the consolidated financial statements of Progress Financial
Corporation as of December 31, 1998, and 1997 and for each of the three years in
the period ended December 31, 1998, which report is included in the Progress
Financial Corporation 1998 Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
March 31, 1999
<PAGE>
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone (202) 347-0300
April 1, 1999
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Progress Financial Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
Attached for filing on behalf of Progress Financial Corporation is
Pre-Effective Amendment No. 1 Registration Statement on Form S-3 which is being
filed pursuant to the requirements of Regulation S-T.
The Amendment is being filed in response to oral comments received from
Ms. Mary Casio of the staff on March 16, 1999 in compliance with the
Commission's plain English rules.
Please do not hesitate to call the undersigned at the above-listed
number if there are any questions regarding the Registration Statement or if we
can be of assistance in any way.
As always, the staff's cooperation is greatly appreciated.
Sincerely yours,
/s/ Kenneth B. Tabach
Kenneth B. Tabach
