Francis J. Wiatr, Chairman, President and CEO,
NewMil Bancorp (860) 355-7602
Henry Bessel, President, Nutmeg Federal, (203) 792-3332
May 31, 2000
FOR IMMEDIATE RELEASE
NewMil Bancorp to Acquire Nutmeg Federal Savings and Loan
New Milford, CT May 31, 2000 NewMil Bancorp, Inc (Nasdaq:
NMSB), parent company of New Milford Savings Bank, announced
today that it has reached a definitive agreement to acquire
Nutmeg Federal Savings and Loan Association (Nasdaq: NTMG), in a
deal valued at approximately $20 million.
Nutmeg Federal Savings and Loan is a federally-chartered, stock
savings and loan association headquartered in Danbury with $120
million in assets and four banking offices in the communities of
Danbury (2), Bethel (1) and Ridgefield (1). It is a preferred
lender under the U.S. Small Business Administration Preferred
Lender program
Based on the terms of the agreement, Nutmeg common shareholders
will receive $8.25 per Nutmeg share in a combination of common
stock of NewMil Bancorp and cash. The price may be increased
based upon the expected gain on sale of certain assets of Nutmeg
before the transaction closes. The transaction will be accounted
for as a purchase with the stock component not to exceed 60% of
the purchase price. The exchange ratio for NewMil stock will be
determined during the pricing period to yield the fixed
consideration being paid.
"Our partnership with Nutmeg significantly enhances New Milford
Savings Bank's franchise in western Connecticut and will
substantially strengthen our position in the very attractive
Danbury market where Nutmeg has three branch offices", said
Francis J. Wiatr, Chairman, President and CEO of NewMil Bancorp.
"In addition, Nutmeg's branch in Ridgefield will allow us to
further connect our franchise to lower Fairfield County and our
Norwalk location. Nutmeg's customers will benefit from having
greater convenience through our branch and ATM networks and will
enjoy a broader selection of services, including Online Banking."
"We will make the transition simple and convenient for Nutmeg
customers," Wiatr continued. "In the meantime, Nutmeg customers
should continue to bank as usual at Nutmeg's offices."
New Milford Savings Bank currently has 14 full service branch
offices in western Connecticut extending from Norwalk in southern
Fairfield County to Canaan in northwest Connecticut. The Bank
also operates a special needs branch in Pomperaug Woods, an
assisted living facility in Southbury. With the addition of
Nutmeg, New Milford Savings Bank will have approximately $500
million in assets and 18 full-service offices.
"While we have not yet determined the number of overlapping
positions that will result from this merger, Nutmeg's four
offices will remain open and continue to serve their
communities." Wiatr said. "As a result, we expect to offer
positions to the branch office employees and will do everything
possible to minimize the elimination of positions. Nutmeg
employees whose positions are eliminated will be given
consideration for open positions within NewMil's growing
organization."
"Given both banks' strong commitment to our customers and to
western Connecticut, NewMil is an ideal merger partner." said
Henry Bessel, Nutmeg's President. "We believe it makes strategic
sense to partner with an organization that shares the same
operating philosophy of exceptional customer service and
commitment to our local community. The combination of our
businesses will result in more products and services for Nutmeg's
customers, including expanded business banking offerings, more
personal banking products and the convenience of online banking."
The purchase price is approximately 1.75 times Nutmeg's book
value and 14.5 times fully diluted earnings for the last 12
months. The acquisition is expected to contribute positively to
NewMil's earnings per share in the first year.
The definitive agreement, which has been approved by both
companies' boards of directors, is subject to approval by
regulatory authorities and shareholders of both companies. NewMil
expects the transaction to close in the third or early fourth
quarter 2000.
Statements in this news release concerning future results,
performance, expectations or intentions are forward-looking
statements. Actual results, performance or developments may
differ materially from forward-looking statements as a result of
known or unknown risks, uncertainties, and other factors,
including those identified from time to time in the Company's
other filings with the Securities and Exchange Commission, press
releases and other communications.
