SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 17, 1999
PRIME BANCORP, INC.
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(Exact name of registrant as specified in charter)
Pennsylvania
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(State or other jurisdiction of incorporation)
0-17286 23-2860688
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(Commission File Number) (I.R.S. Employer
Identification No.)
7111 Valley Green Road, Fort Washington, Pennsylvania 19034-2209
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(Address of principal executive offices) (Zip Code)
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Item 1. Changes in Control of Registrant
On February 17, 1999, Prime Bancorp, Inc. ("Prime") has entered into
a definitive Agreement and Plan of Merger pursuant to which Summit
Bancorp, Inc. ("Summit") will acquire Prime. Prime, a bank holding
company headquartered in Fort Washington, Pennsylvania, is the
parent company of Prime Bank, a commercial bank with $1.0 billion in
assets and 27 branches in the five-county greater Philadelphia
region. Under the terms of the definitive agreement, Summit will
exchange one (1) share of Prime common stock for .675 shares of
Summit common stock in a tax free exchange with a transaction value
of approximately $292.0 million.
In connection with the transaction Prime and Summit entered into a
Stock Option Agreement dated February 18, 1999 pursuant to which
Prime granted to Summit an option to purchase 1,087,498 shares of
Prime common stock at a price of $18.00 per share (the closing price
on February 17, 1999) upon the occurrence of certain events. Prime
also agreed to pay Summit a breakup fee of $5,000,000 in the event
the transaction is not completed for certain reasons.
The transaction is subject to customary regulatory approvals and is
anticipated to be completed by the third quarter of 1999.
See Exhibit 99.1 for further details.
The following documents are hereby filed as part of this Form 8-K:
Exhibit 99.1 Additional Exhibits
99.1 News Release, issued by the Registrant on February 18,
1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Date: February 18, 1999 /s/ James J. Lynch
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James J. Lynch
President and Chief
Executive Officer
Date: February 18, 1999 /s/ James J. Kelly
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James J. Kelly
Executive Vice President
and Chief Financial
Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
99.1 News Release, issued by the Registrant
on February 18, 1999.
EXHIBIT 99.1
PRIME BANCORP, INC.
NEWS RELEASE
Summit Bancorp to Acquire Prime Bancorp
Significantly Strengthens Franchise in Eastern Pennsylvania
Fort Washington, PA, (February 18, 1999) Prime Bancorp, Inc.
(Nasdaq: PBNK) and Summit Bancorp (NYSE: SUB) today announced a
definitive agreement for Summit to acquire Prime Bancorp. Prime
Bancorp, a bank holding company headquartered in Fort Washington,
Pennsylvania, is the parent company of Prime Bank, a commercial
bank with $1.0 billion in assets and 27 branches in the five-
county greater Philadelphia region.
"The acquisition of Prime Bancorp greatly enhances Summit's
ability to serve our customers in eastern Pennsylvania," said
Summit Chairman and Chief Executive Officer T. Joseph Semrod. "We
have been eager to expand in this attractive region, and Prime
provides both the branch presence and business focus we were
seeking in key Philadelphia-area markets. We especially look
forward to working with Prime to reinforce our combined commitment
to the region's businesses."
Summit's branch presence in the five counties, which include
Bucks, Chester, Delaware, Montgomery and Philadelphia, will more
than double, significantly increasing Summit's penetration of the
market. Bucks, Chester and Montgomery counties rank in the top 100
counties in the nation in per capita income, and the greater
Philadelphia region is home to 35 percent of the state's deposits.
When this merger is completed, Summit will have the fifth largest
market share in the 13-county eastern Pennsylvania region, with
over 100 branches and $3.9 billion in assets.
Prime Bancorp Chairman and Chief Executive Officer James J. Lynch
stated, "Summit's commitment to serving middle-market companies
and its strong product offerings were the primary reasons we chose
this combination. We have more than doubled commercial assets in
the last three years, and Summit provides the right platform for
furthering this growth and supporting our customers' expanding
needs. In addition, we share Summit's dedication to quality
service, customer responsiveness and local decision-making."
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When the merger is completed, Mr. Lynch will become Chairman and
Chief Executive Officer of Summit Bank in Pennsylvania. He brings
more than 30 years of Pennsylvania banking experience, mostly with
Philadelphia-based Continental Bank, where he served as president
from 1992 to 1994. Continental was acquired by Midlantic
Corporation in 1986. Mr. Lynch became Executive Vice President of
Midlantic in 1994, and joined Prime in 1996.
Under the terms of the merger agreement, which was approved by the
boards of directors of both companies, Prime Bancorp shareholders
will receive 0.675 share of Summit Bancorp common stock for each
share of Prime Bancorp common stock in a tax-free exchange.
Based on the closing price of Summit Bancorp's common stock last
night, the transaction has a value of $26.58 per share for a total
of $292.0 million. Prime Bancorp has the right to terminate the
transaction if Summit's average price during the determination
period falls below $32.68 and is 17 percent below an index of
selected banking companies.
The transaction is expected to be completed in the third quarter
of 1999 subject to regulatory and Prime Bancorp shareholder
approval. It is anticipated that this transaction will be
accounted for as a purchase. Summit expects to repurchase from
time to time in the open market outstanding Summit Bancorp shares
in a number equal to the approximate amount of common shares to be
issued in the acquisition or reissue treasury shares. The number
of common shares to be repurchased or reissued will depend on
market conditions and other factors.
Summit Bancorp is a $33 billion financial services company
headquartered in Princeton, New Jersey. Through its banking
subsidiaries, Summit operates over 440 traditional and in-store
branches throughout New Jersey, eastern Pennsylvania and southern
Connecticut and an extensive network of ATMs. The company provides
financial services to individuals, businesses, not-for-profit
organizations, government entities and other financial
institutions through its commercial and retail banking, investment
management and private banking lines of business. For more
information about Summit, please visit the company's website at
www.summitbank.com.
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SUMMIT BANCORP
AQUISITION OF PRIME BANCORP
TRANSACTION SUMMARY
ANNOUNCEMENT FEBRUARY 18, 1998
TRANSACTION TERMS:
Structure * Purchase transaction
* Tax-free exchange of stock
* Definitive agreement signed
* Due diligence completed
Terms * Fixed exchange ratio of 0.675 of a share
of Summit for each Prime Bancorp share
* Walk away if average price of Summit
stock declines below $32.68, and has
declined more than 17% versus a selected
bank index during the determination
period
* Option to purchase up to 9.9% of Prime
Bancorp, plus break up fee
Timing * Targeted to close third quarter 1999
* Subject to normal regulatory and Prime
Bancorp shareholder approval
PRICING OVERVIEW:
Indicated price per share
(2/17/99) $26.58
Indicated total purchase
price $292.0 million
Price to book value 3.25x
Price to trailing
4Q earnings 24.6x
