<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT ON FORM 8-K,
as filed with the Securities and Exchange Commission on June 24, 1994
Pursuant to Section 13, or 15(d) of the Securities
Exchange Act of 1934 Date of Report
(Date of earliest event reported) June 10, 1994
EAGLE FINANCIAL CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-15311 06-1194047
- - --------------- ------------------------ -------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
222 Main Street, P.O. Box 1157, Bristol, Connecticut 06010
- - ---------------------------------------------------- ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (203) 589-4600
---------------------------
Not Applicable
- - -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
The registrant hereby amends the Items 2 and 7, of its Current Report
on Form 8-K, as filed with the Securities and Exchange Commission on June 24,
1994, as set forth below.
Item 2. Acquisition or Disposition of Assets
General. Effective June 10, 1994, Eagle Federal Savings Bank ("Eagle
Federal" or the "Bank"), a wholly-owned subsidiary of Eagle Financial Corp.
("Eagle" or the "Company"), entered into a Purchase and Assumption Agreement
(the "Purchase Agreement") with the Federal Deposit Insurance Corporation
("FDIC"), as receiver of The Bank of Hartford, Inc., Hartford, Connecticut (the
"Bank of Hartford"). A copy of the Agreement is attached at Exhibit 2(a) to
Eagle's Form 8-K, as filed with the Securities and Exchange Commission ("SEC")
on June 24, 1994, and is incorporated herein by reference. Unless otherwise
stated, references herein to Eagle or the Company include Eagle Federal and
other subsidiaries on a consolidated basis.
Pursuant to the Purchase Agreement, Eagle assumed approximately $275.0
million in deposit balances of Bank of Hartford and approximately $978,000 in
other liabilities, primarily accrued interest payable on deposits. Eagle also
acquired $276.0 million of assets, including $80.6 million of primarily 1-4
family first mortgage and home equity loans with a weighted average yield of
8.33%, $112.4 million in cash and cash receivables due from the FDIC and $72.7
million of investment securities. The yields on the investment securities have
not yet been determined since the final market value has yet to be settled with
the FDIC. The Bank of Hartford acquisition is being accounted for as a purchase
transaction. The FDIC retained those assets of the Bank of Hartford which the
FDIC determined to be higher risk assets, including substantially all other real
estate owned, in-substance foreclosed loans, and all commercial loans.
Settlement Procedures. The assets purchased and liabilities assumed in
the Bank of Hartford transaction are subject to adjustment up to the Settlement
Date, as described below, to reflect the actual "book value" of the assets and
liabilities acquired. As defined in the Purchase Agreement, "book value" means,
with respect to any acquired asset and any liability assumed, the dollar amount
stated on the accounting records of the Bank of Hartford as of June 10, 1994
(the "Closing Date") after adjustment by the FDIC for differences in accounts,
suspense items, unposted debits and credits, and other similar adjustments or
corrections. Without limiting the generality of the foregoing, (i) book value of
a liability includes all accrued and unpaid interest thereon as of the Closing
Date, and (ii) the book value of a loan reflects all adjustments for earned or
unearned interest, if any, as of the Closing Date, and adjustments for the
portion of earned or unearned loan related credit life and/or disability
insurance premiums, if any, attributable to the Bank of Hartford, as of the
Closing Date. No adjustment to the book value of any asset will be made for any
loan premiums, discounts or any related deferred income or fees, or general or
specific loan loss reserves on the records of the Bank of Hartford as of the
Closing Date. As to securities acquired, the book value of the securities as of
the date of acquisition are subject to adjustment of their fair market value as
of such date.
On March 7, 1995, or on such earlier date as the FDIC and Eagle may
agree, or such later date as the FDIC may establish (the "Settlement Date"), the
FDIC will pay Eagle, or Eagle will pay the FDIC, as the case may be an amount
which reflects the net adjustments of the assets and liabilities acquired and
certain other adjustments (including any costs, expenses and fees associated
with certain determinations of value) as provided in the Purchase Agreement,
plus accrued interest.
The Purchase Agreement contemplates that certain additional adjustments
may be made in connection with the settlement process. The FDIC has the right to
repurchase certain loans deemed essential to its role as receiver, including
loans to officers, directors and affiliates of the Bank of Hartford, loans
related to investigations or litigation by the receiver, and loans secured by
collateral that also secures assets owned by the receiver. For a period of one
year after the Closing Date, Eagle may require the FDIC to repurchase any loan
acquired from the Bank of Hartford which is evidenced by forged or stolen
instruments. Such repurchase obligation does not extend to loans pursuant to an
overdraft protection plan or to loans which Eagle has advanced additional funds,
modified or sold to a third party.
Assets Acquired. In the Bank of Hartford transaction, Eagle acquired
$276.0 million of assets, including $112.4 million of cash and receivables due
from the FDIC, $72.7 million of investments and mortgage-backed securities,
$80.6 million of loans and $13.6 million of other assets. In addition, Eagle
purchased the loan servicing rights of $80.5 million of loans with an average
loan servicing fee of 0.375%. As of June 30, 1994, the Bank of Hartford
transaction increased Eagle's total assets from $823.7 million to $1.1 billion.
The $112.4 million in cash and receivables due from the FDIC includes
$30.4 million of cash, amounts due from banks and interest bearing deposits of
the Bank of Hartford which were acquired. The remaining $82.0 million of cash
and receivables due from the FDIC represents the excess of liabilities assumed
over assets acquired in the transaction, the estimated amount due from the FDIC
to adjust the investment and mortgage-backed securities to market value at June
10, 1994 and certain settlement items currently being discussed with the FDIC,
less an $8.7 million premium paid by Eagle to the FDIC to purchase the assets
and assume the liabilities. Of the $82.0 million of cash and receivables due
from the FDIC, $72.3 million was received on June 13, 1994. Substantially all of
the acquired cash was invested initially in short-term securities and
interest-bearing accounts. Eagle intends to utilize such funds primarily for
origination of loans and, to a lesser extent, to purchase mortgage-backed and
investment securities.
Investments and mortgage-backed securities acquired include $24.1
million of debt securities, consisting of $16.0 million of collateralized
mortgage obligations, $4.9 million of U.S. government agency and corporation
debt, $2.3 million of U.S. Treasury securities and an $880,000 municipal bond.
Also acquired were $48.5 million of Federal Home Loan Mortgage Corporation
certificates. For further information regarding investments and mortgage-backed
securities, see notes 1(d) and 4 to the Statement of Assets Acquired and
Liabilities Assumed (the "Statement") filed at Exhibit 99 hereto in response to
Item 7(b) of this Form 8-K/A.
Loans acquired in the Bank of Hartford transaction include $60.0
million of residential 1-4 family mortgage loans and $20.6 million of consumer
loans, primarily home equity loans. The net premium of loans acquired was
$190,000. The weighted average yield of the $80.6 million acquired loans was
8.33% at June 30, 1994. This compares to a weighted average yield of 7.06% for
Eagle's $705.3 million other loans receivable at June 30, 1994.
Also as part of the Bank of Hartford transaction, Eagle increased its
allowance for loan losses by $3.5 million in connection with the $80.6 million
of loans acquired. This addition to the allowance is based on management's
evaluation of the loans acquired. Included as part of such loans were $431,000
of loans delinquent 60-89 days and $2.5 million of non-performing, or
non-accrual, loans. For further information regarding the loans acquired, see
notes 1(b) and (c) and note 5 to the Statement.
Eagle also recorded $13.6 million of other assets as part of the Bank
of Hartford transaction, including $8.7 million of goodwill, $2.4 million of
core deposit intangible, $1.4 million of accrued interest; $880,000 of servicing
rights and $260,000 of real estate acquired in settlement of loans. For further
information regarding other assets, see notes 1(f) and 7 to the Statement.
Deposits Assumed. As part of the Bank of Hartford transaction, the
Company assumed $275.0 million of deposits, including $9.2 million of
certificate accounts with balances of $100,000 or more and $2.3 million of
advance payments by borrowers for taxes and insurance. The following table sets
forth the maturities of deposit accounts in denominations of $100,000 or more at
June 10, 1994:
Maturity Amount
---------- --------
Under three months $ 1,913,000
Three to six months 2,002,000
Six to twelve months 1,306,000
Over twelve months 4,010,000
---------
Total: $ 9,231,000
=========
For further information regarding deposits assumed, see note 8 to the Statement.
Intangible Assets. The Bank of Hartford transaction will result in
approximately $11.9 million of intangible assets being recorded on the Company's
consolidated balance sheet. The intangible assets include $8.6 million of
goodwill, $2.4 million core deposit intangible and $880,000 mortgage servicing
rights.
The goodwill will be amortized on a straight-line basis over a period
of fifteen years (an increase of approximately $570,000 to non-interest
expense). The core deposit intangible is based upon certain industry average
estimates and assumptions provided by management and will be amortized on an
accelerated method over a period of ten years. The mortgage serving rights will
be amortized over the life of the related loans using a method that approximates
the level yield method.
The full amount of goodwill and core deposit intangible and 50% of the
mortgage servicing rights are not includable in Eagle Federal's calculation of
regulatory capital and will therefore initially reduce the Bank's regulatory
capital by approximately $11.4 million. For further information, see notes 1(f)
and 7 to the Statement.
Branch Offices. Of the seven branch offices previously operated by Bank
of Hartford, four are leased and three are owned by the FDIC as receiver. The
Purchase Agreement does not obligate Eagle to purchase or assume the leases of
any Bank of Hartford banking offices. Under the Purchase Agreement, Eagle has an
exclusive option, for a period of 60 days after the Bank Closing, to purchase
Bank of Hartford's owned bank premises at the price set forth in the FDIC's
asset valuation review (the "AVR Price") of Bank of Hartford and to assume the
leases for Bank of Hartford's leased bank premises at prices in effect under
existing lease agreements. Eagle will exercise its option to purchase or lease
six of the Bank of Hartford banking offices. Eagle will be required to purchase
the furniture, fixtures and equipment located at these banking offices at their
AVR Price. The AVR Price of the Bank of Hartford banking offices is $65,188. The
AVR Price of the furniture, fixtures and equipment located at these offices has
not yet been provided to Eagle by the FDIC.
Based on current appraisals, Eagle believes that the fair value of the
purchased offices will exceed significantly the amount of the AVR Price. The
final determination of fair value is subject to further review of current
appraisals and environmental issues related to the purchased offices. The amount
of any excess of fair value over the AVR Price will result in a corresponding
increase in the carrying value of the purchased premises and a reduction in the
amount of the intangible asset that resulted from the Bank of Hartford
transaction. See notes 1(e) and (f) to the Statement.
Indemnification. The FDIC has generally agreed to indemnify Eagle
against all costs, losses, liabilities, and expenses, including legal fees,
incurred in connection with certain third party claims that may be brought
against Eagle based on liabilities of the Bank of Hartford that were not assumed
by Eagle under the Purchase Agreement. Such indemnification would include, for
example, claims based on the rights of any creditor of the Bank of Hartford with
respect to indebtedness or other obligations of claims based on any action or
inaction by directors, officers, employees or agents of the Bank of Hartford
prior to the acquisition claims based on the determination of insolvency and the
closing of the Bank of Hartford, and claims based on the execution and
consummation of the Purchase Agreement. Eagle has agreed to indemnify the FDIC
against certain costs, losses, liabilities and expenses, including legal fees,
incurred in connection with certain third party claims that may be brought
against the FDIC based on liabilities of the Bank of Hartford that were assumed
by Eagle under the Purchase Agreement or based on any liability or obligation of
Eagle with respect to purchased assets and assumed liabilities under the terms
of the Purchase Agreement.
Liquidity, Capital and Operating Results. As a federal savings bank,
the Bank is required to maintain liquid assets at 5% of its withdrawable
deposits plus short-term borrowings. At June 30, 1994, the Bank was in
compliance with Office of Thrift Supervision ("OTS") liquidity requirements,
having a liquidity ratio of 11.7%. This includes the acquisition of liquid
assets, including $112.4 of cash and cash receivables due from the FDIC as part
of the Bank of Hartford transaction.
The Bank is required by the OTS to meet minimum capital requirements,
which include tangible capital, core capital and risk-based capital
requirements. The Bank's actual capital as reported to the OTS at June 30, 1994
exceeded all three requirements. The following chart sets forth the actual and
required minimum levels of regulatory capital for the Bank under applicable OTS
regulations as of June 30, 1994:
<TABLE>
<CAPTION>
Actual Percent Required Percent Excess
-------- --------- ---------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Core.................. $ 50,898 4.69% $ 32,572 3.00% $ 18,326
Tangible.............. 50,564 4.66 16,286 1.50 34,278
Risk-based............. 53,930 10.59 40,726 8.00 13,204
</TABLE>
The OTS has proposed to increase the minimum required core capital
ratio from the current 3% level to a range of 4% to 5% for all but the most
highly rated financial institutions. While the OTS has not taken final action on
such proposal, it has adopted a prompt corrective action regulation that
classifies any savings institution that maintains a core capital ratio of less
than 4% (3% in the event the institution was assigned a composite 1 rating in
its most recent report of examination) as "undercapitalized." As of June 30,
1994, the Bank had a core capital ratio of 4.66% and met the requirements for an
"adequately capitalized" institution. Prior to the Bank of Hartford transaction,
Eagle Federal's capital ratios met the requirements for a "well capitalized"
institution.
The Company has filed with the SEC a registration statement related to
a proposed public offering of 1,130,000 shares of common stock. Keefe, Bruyete,
and Woods, Inc. is expected to act as underwriter for such offering. Eagle
intends to contribute all of the net proceeds of the offering to the Bank as
additional capital. The additional capital is expected to effectively restore
the Bank's core capital ratio to its position prior to the June 10, 1994 Bank of
Hartford transaction. The additional capital also may facilitate further
acquisitions in Connecticut or other generally adjacent market areas. There are
currently no pending negotiations or assisted bid submissions as to any
acquisition.
The Bank of Hartford transaction is expected to have a positive impact
on the Company's efficiency ratio (other expenses to net interest income and
other income). As to other expenses, Eagle believes that the primary impact of
the transaction will be additional office occupancy and compensation related
expenses for the six new banking offices acquired. Eagle has retained
approximately 50 former branch personnel of the Bank of Hartford to operate the
new banking offices. Other expenses such as federal insurance premiums and data
processing expense also will increase as a result of the increase in deposit
accounts. As to the six new offices, as of June 30, 1994 the average amount of
deposits held in each office was $41.6 million, which approximates the average
amount of deposits held in the other banking offices of Eagle.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of business acquired
Historical financial statements of the Bank of Hartford have been
omitted in accordance with SEC Staff Accounting Bulletin ("SAB") No. 89 based on
management's belief that there is not sufficient continuity of the Bank of
Hartford's operations prior to and after the acquisition so that disclosure of
prior financial information is material to an understanding of future
operations. This position was confirmed in a letter dated July 5, 1994 from the
SEC's Chief Accountant, Division of Corporation Finance.
Item 7(b). Pro Forma Financial Information
Pro forma financial information has been omitted in accordance with SAB
89, as discussed at Item 7(a) above. In lieu thereof, Eagle has provided the
Statement at Exhibit 99 hereto and incorporated by reference herein. Eagle also
has presented its consolidated balance sheets as of June 30, 1994 at Item 1
hereof and incorporated by reference herein.
Item 7(c). Exhibits
Exhibit 2. Purchase and Assumption Agreement dated as of June
10, 1994. *
Exhibit 23. Consent of KPMG Peat Marwick
Exhibit 99. Statement of Assets Acquired and Liabilities
Assumed - June 10, 1994, including the report thereon
of KPMG Peat Marwick.
------------------------
* Previously filed.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant had duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
By: /s/ Ercole J. Labodia
----------------------------
Ercole J. Labodia
Vice President, Administration
Date: August 11, 1994
By: /s/ Barbara S. Mills
----------------------------
Barbara S. Mills
Vice President and Treasurer
Date: August 11, 1994
<PAGE>
Exhibit Index
Exhibit Page
Exhibit 2. Purchase and Assumption Agreement dated as of
June 10, 1994.*...............................
Exhibit 23. Consent of KPMG Peat Marwick..................
Exhibit 99. Statement of Assets Acquired and Liabilities
Assumed - June 10, 1994, including the
report thereon of KPMG Peat Marwick...........
------------------------
* Previously filed.
<PAGE>
Exhibit 23
The Board Directors
Eagle Federal Savings Bank:
We consent to the use of our report dated August 5, 1994 with respect to the
Statement of Acquired Assets and Liabilities Assumed at June 10, 1994, which
report is included herein.
KPMG PEAT MARWICK
Hartford, Connecticut
August 11, 1994
<PAGE>
Exhibit 99
Independent Auditors' Report
The Board of Directors
Eagle Federal Savings Bank:
We have audited the accompanying statement of assets acquired and liabilities
assumed by Eagle Federal Savings Bank, a federally-chartered savings bank and
wholly-owned subsidiary of Eagle Financial Corporation, at June 10, 1994,
related to the acquisition of certain assets and assumption of certain
liabilities of The Bank of Hartford, Inc. by Eagle Federal Savings Bank. This
statement is the responsibility of the management of Eagle Federal Savings Bank.
Our responsibility is to express an opinion on the statement of assets acquired
and liabilities assumed based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance that the statement of assets acquired and liabilities assumed is free
of material misstatement. The audit of the statement of assets acquired and
liabilities assumed included examining, on a test basis, evidence supporting the
amounts and disclosures in the statement. The audit of the statement of assets
acquired and liabilities assumed also included assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of such statement. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the statement referred to above presents fairly, in all material
respects, the assets acquired and liabilities assumed by Eagle Federal Savings
Bank related to the aforementioned acquisition at June 10, 1994, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick
Hartford, Connecticut
August 5, 1994
<PAGE>
EAGLE FEDERAL SAVINGS BANK
Statement of Assets Acquired and Liabilities Assumed
June 10, 1994
(In Thousands)
<TABLE>
<CAPTION>
Assets Acquired
<S> <C>
Cash and amounts due from banks (note 3) ............................................................ $ 4,933
Interest bearing deposits ........................................................................... 25,503
Investments and mortgage-backed securities (note 4) ................................................. 72,667
Loans ............................................................................................... 80,776
Less allowance for loan losses ...................................................................... (3,500)
---------
Loans, net (note 5) ............................................................................ 77,276
---------
Due from the FDIC (note 6) .......................................................................... 82,001
Other assets (note 7) ............................................................................... 13,606
---------
Total assets acquired .......................................................................... $ 275,986
=========
Liabilities Assumed
Deposits (note 8).................................................................................... $ 272,752
Advance payments by borrowers for taxes and insurance ............................................... 2,256
Other liabilities ................................................................................... 978
---------
Total liabilities assumed ...................................................................... $ 275,986
=========
</TABLE>
See accompanying notes to statement of assets acquired and liabilities assumed.
<PAGE>
EAGLE FEDERAL SAVINGS BANK
Statement of Assets Acquired and Liabilities Assumed
(1) Organization and Basis of Presentation
On June 10, 1994, Eagle Federal Savings Bank, a federally-chartered
savings bank ("Eagle Federal" or the "Bank") and wholly-owned subsidiary
of Eagle Financial Corporation (the "Corporation"), acquired certain
assets and assumed all of the deposits and certain other liabilities of
The Bank of Hartford, Inc., Hartford, Connecticut ("The Bank of
Hartford") from the Federal Deposit Insurance Corporation ("FDIC") in an
assisted transaction. The Bank and the Corporation have a fiscal year-end
of September 30.
(2) Summary of Significant Accounting Policies
(a) Basis of Financial Statement Presentation
The statement of assets acquired and liabilities assumed has been
prepared in conformity with generally accepted accounting
principles and represents only those assets and liabilities of
Eagle Federal Savings Bank relating to The Bank of Hartford
acquisition. The financial information of The Bank of Hartford was
developed based primarily upon the records of The Bank of Hartford
and information supplied by the FDIC. Such financial information
is subject to change upon resolution of certain settlement issues
and completion of the customary FDIC settlement process which are
to be completed within 270 days after June 10, 1994 as stipulated
by the Purchase and Assumption Agreement.
The transaction has been accounted for as a purchase, whereby the
purchase price has been allocated to the assets acquired and
liabilities assumed based on their respective fair values as of
the date of acquisition. Such allocation has been based on
preliminary estimates which may be revised at a later date based
upon more complete information.
(b) Loans
Loans are stated at estimated fair value upon acquisition which is
comprised of the principal amount outstanding plus a net premium.
Interest income on loans is accrued based upon the principal
amount outstanding. Interest income is not accrued on loans that
are 90 days or more past due. The net premium on loans purchased
is recognized in interest income over the lives of the loans using
a method that approximates a level-yield method.
(c) Allowance for Loan Losses
The allowance for loan losses is established at a level believed
adequate by management to absorb probable losses in the loan
portfolio. Management's determination of the adequacy of the
allowance for loan losses is based upon an evaluation of the
portfolio, past loan loss experience, current economic conditions,
composition of the loan portfolio and other relevant factors.
While management uses available information to recognize losses on
loans, future additions to the allowance for loan losses may be
necessary based on changes in economic conditions. In addition,
various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for
loan losses. Such agencies may require the Bank to recognize
additions to the allowance based on their judgment of information
available to them at the time.
(d) Investment Securities and Mortgage-Backed Securities
Investment securities and mortgage-backed securities are carried
at cost (i.e., fair value on the date of acquisition). Premiums
are amortized and discounts are accreted to income over the
estimated life of the respective securities using methods which
approximate the level-yield method.
(e) Premises and Equipment
Under the Purchase and Assumption Agreement with the FDIC, Eagle
Federal has an exclusive option, for a period of 60 days after
June 10, 1994 (the "Bank Closing"), to purchase any or all of The
Bank of Hartford's owned bank premises at the price (the "AVR
Price") set forth in the FDIC's asset valuation review (the "AVR")
of The Bank of Hartford and to assume the leases for The Bank of
Hartford's leased bank premises at prices in effect under existing
lease agreements. Eagle Federal presently anticipates that it will
exercise its option to purchase or lease all of The Bank of
Hartford banking offices (excluding the operations center and one
branch location). The AVR Price of The Bank of Hartford owned bank
premises is $65,188. If Eagle Federal elects to purchase and lease
The Bank of Hartford premises, Eagle Federal will be required to
purchase the furniture, fixtures and equipment located on such
premises at a price determined by appraisals obtained by the FDIC.
Such appraisals are currently in process. Since Eagle Federal did
not purchase The Bank of Hartford premises and equipment on June
10, 1994, these assets are not reflected in the accompanying
statement of assets acquired and liabilities assumed.
(f) Intangible Assets
The excess of the purchase price over the fair value of the
tangible net assets acquired has been allocated to mortgage
servicing rights, core deposits and goodwill.
The mortgage servicing rights is being amortized over the life of
the related loans using a method that approximates the level-yield
method. The core deposit intangible is being amortized on an
accelerated method over a period of ten years. Goodwill is being
amortized on a straight-line basis over a period of fifteen years.
(3) Cash and Amounts Due from Banks
Eagle Federal is subject to requirements of the Federal Reserve to
maintain certain average cash reserve balances related to certain
deposits accounts assumed. At June 10, 1994, these reserves were
appropriately maintained.
(4) Investments and Mortgage-Backed Securities
Investments and mortgage-backed securities on June 10, 1994 are as
follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Debt securities:
U.S. Treasury securities.................................................. $ 2,316
U.S. Government agencies and corporations................................. 4,928
Collateralized mortgage obligations....................................... 16,024
Municipal bond............................................................ 880
------
Total debt securities................................................. 24,148
------
Mortgage-backed securities:
Federal Home Loan Mortgage Corporation
certificates............................................................. 48,519
------
Total investments and mortgage-backed
securities.......................................................... $ 72,667
======
</TABLE>
The accompanying financial statement has been prepared based upon
management's estimated market values of the investment and
mortgage-backed securities on June 10, 1994, which will be adjusted when
third-party derived market values of these securities have been obtained
by the FDIC.
The maturity schedule of debt securities, excluding collateralized
mortgage obligations, at June 10, 1994 is shown below. Expected
maturities will differ from contractual maturities because borrowers have
the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Debt securities:
Due within one year....................................................... $ 1,003
Due after one year through five years..................................... 2,113
Due after five years through ten years.................................... 4,480
Due after ten years....................................................... 528
Collateralized mortgage obligations....................................... 16,024
------
Total................................................................. $ 24,148
======
</TABLE>
(5) Loans
Loans at June 10, 1994 consist of the following:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Residential 1-4 family...................................................... $ 59,990
Consumer loans, including home equity loans................................. 20,596
------
80,586
Net premium on loans acquired............................................... 190
Allowance for loan losses................................................... (3,500)
------
Total................................................................. $ 77,276
======
</TABLE>
Of the residential 1-4 family loans presented above, approximately 58%
are fixed rate and 42% are adjustable rate.
Nonperforming loans, which consist of loans 90 days or more past due, are
approximately $2.5 million on June 10, 1994.
(6) Due from the FDIC
The amount due from the FDIC represents the excess of liabilities assumed
over assets acquired in the acquisition, and the estimated amount due
from the FDIC to adjust the investment and mortgage-backed securities to
market value at June 10, 1994 and certain settlement items currently
being discussed with the FDIC, less $8.7 million paid by Eagle Federal to
the FDIC to purchase the assets and assume the liabilities.
On June 13, 1994, Eagle Federal received $72.3 million from the FDIC as
an initial payment.
(7) Other Assets
Other assets at June 10, 1994 are as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Core deposit intangible..................................................... $ 2,381
Goodwill.................................................................... 8,650
Mortgage servicing rights................................................... 880
Accrued interest............................................................ 1,435
Real estate acquired in settlement of loans................................. 260
------
Total.................................................................... $ 13,606
======
</TABLE>
A portion of the amount shown above for goodwill will be allocated as the
purchase price adjustment to the fair value of bank premises to be
acquired from the FDIC as part of the acquisition which is over and above
the AVR Price (see Note 1(e)).
(8) Deposits
Deposits at June 10, 1994 consist of the following:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Regular savings............................................................ $ 45,770
NOW accounts............................................................... 15,364
Demand deposits............................................................ 6,181
Money market deposit accounts.............................................. 16,806
Certificates of deposit.................................................... 188,631
-------
Total deposits.......................................................... $ 272,752
=======
</TABLE>
The aggregate amount of time deposits of $100,000 or more totaled
$9,231,166 at June 10, 1994.
The weighted average interest rates for deposits at June 10, 1994 was
3.84%. The Purchase and Assumption Agreement stipulates that Eagle
Federal is to pay interest on assumed liabilities in accordance with the
terms of the respective deposit agreements for a period of 14 days after
assumption. After the 14 day period, the Bank reduced rates on certain
deposit accounts. It is expected that deposit run-off will be funded by
excess liquidity; primarily from the net amount due from the FDIC.
(9) Commitments and Concentrations of Credit Risk
At June 10, 1994, there were no mortgage commitments outstanding. Unused
portions of home equity credit lines approximate $5,421,000 on June 10,
1994.
The Loans acquired are primarily secured by real estate located in
Connecticut.
(10) Litigation and Other Matters
The FDIC has agreed to indemnify Eagle Federal against certain costs,
liabilities and expenses, including legal fees, incurred in connection
with certain third party claims that may be brought against Eagle Federal
based on liabilities of The Bank of Hartford that were not assumed by
Eagle Federal under the Purchase and Assumption Agreement. Eagle Federal
has agreed to indemnify the FDIC against certain costs, liabilities and
expenses, including legal fees, incurred in connection with certain third
party claims that may be brought against the FDIC based on liabilities of
The Bank of Hartford that were assumed by Eagle Federal under the
Purchase and Assumption Agreement.
(11) Recent Accounting Pronouncements
In May 1993, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 114, Accounting
by Creditors for Impairment of a Loan. This statement requires that loans
be impaired when it is probable that a creditor will be unable to collect
all amounts (i.e., principal and interest) contractually due, and that
the impairment be measured based on the present value of expected future
cash flows discounted at the loan's original effective interest rate. The
statement also allows impairments to be measured based on the loan's
market price or the fair value of the collateral if the loan is
collateral dependent. The effective date for the statement is for fiscal
years beginning after December 15, 1994. The Bank has not yet determined
the timing or impact of adoption of this statement.
In May 1993, the FASB issued SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities. The Statement generally would
require that debt and equity securities that have readily determinable
fair values be carried at fair value unless they are classified as held
to maturity. Securities would be classified as held to maturity and
carried at amortized cost only if the reporting entity has a positive
intent and ability to hold those securities to maturity. If not
classified as held to maturity, such securities would be classified as
trading securities or securities available for sale. Unrealized holding
gains or losses for securities available for sale would be excluded from
earnings and reported as a net amount in a separate component of
shareholders' equity. The effective date for the statement is for fiscal
years beginning after December 15, 1993. Based on the securities held by
the Bank as of June 10, 1994 related to the acquired securities of The
Bank of Hartford, the Bank does not believe that this statement will have
a material effect on the classification of its securities upon adoption.
The impact on the Bank's future financial position or results of
operations will be based on the future fair values of its securities.
