<PAGE> 1
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
April 2, 1996
- --------------------------------------------------------------------------------
(Date of earliest event reported)
Peoples Heritage Financial Group, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maine 0-16947 01-0437984
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
P.O. Box 9540, One Portland Square, Portland, Maine 04112-9540
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(207) 761-8500
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Exhibit Index appears on page 13.
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------
On April 2, 1996, following receipt of all required regulatory and
stockholder approvals, Peoples Heritage Financial Group, Inc. ("PHFG") completed
the acquisition of Bank of New Hampshire Corporation ("BNHC") pursuant to an
Agreement and Plan of Merger, dated as of October 25, 1995, among PHFG, First
Coastal Banks, Inc. ("First Coastal"), a wholly-owned subsidiary of PHFG, and
BNHC. The acquisition was effected by means of the merger of First Coastal with
and into BNHC (the "Merger"). Upon consummation of the Merger, each share of
common stock, no par value with a stated value of $2.50 per share, of BNHC
("BNHC Common Stock") outstanding immediately prior thereto was converted into
the right to receive two shares of Common Stock, par value $0.01 per share, of
PHFG ("PHFG Common Stock"). Based on 4,064,165 shares of BNHC Common Stock
outstanding, a total of 8,128,330 shares of PHFG Common Stock are being issued
as a result of consummation of the Merger.
On February 16, 1996, The First National Bank of Portsmouth ("FNBP")
completed the acquisition of five branch offices located in central and southern
New Hampshire from Shawmut Bank NH, which were divested in connection with the
merger of Fleet Financial Group, Inc. and Shawmut National Corporation (the
"Branch Acquisition"). In connection with this transaction, FNBP assumed
approximately $161 million of deposits and acquired $218.3 million of loans,
consisting of $177.6 million of single-family residential loans, $34.9 million
of commercial real estate and commercial business loans and $5.8 million of
consumer loans.
For additional information, reference is made to Item 7 below.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
------------------------------------------------------------------
(a) The following consolidated financial statements of BNHC are
incorporated by reference to the Report on Form 10-K for the year ended December
31, 1995 filed by BNHC with the Securities and Exchange Commission on March 28,
1996:
Consolidated Balance Sheets - December 31, 1995 and 1994
Consolidated Statements of Income - Years ended December 31, 1995, 1994
and 1993
Consolidated Statements of Changes in Shareholders' Equity - Years
ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows - Years ended December 31, 1995,
1994 and 1993
Notes to Consolidated Financial Statements
2
<PAGE> 3
(b) The following pro forma financial statements of PHFG are included
pursuant to Item 7(b) of Form 8-K:
PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma combined condensed consolidated balance
sheet combines the consolidated historical balance sheets of PHFG and BNHC and
the assets and liabilities involved in the only other prospective acquisition
pending at December 31, 1995 the Branch Acquisition - assuming the Merger was
consummated and such assets and liabilities were acquired as of December 31,
1995, on a pooling of interests accounting basis with respect to the Merger and
on a purchase accounting basis with respect to the Branch Acquisition.
The following unaudited pro forma combined condensed consolidated
statements of operations present the combined consolidated statements of
operations of PHFG and BNHC, as well as the acquisition of Bankcore, Inc.
("Bankcore") and the Branch Acquisition (collectively, the "Purchase
Acquisitions"), assuming (i) PHFG and BNHC had been combined at the beginning of
each period presented on a pooling of interests basis with respect to the Merger
and (ii) the Purchase Acquisitions had been consummated as of January 1, 1995
under the purchase accounting basis. Pro forma financial information for the
acquisition of Bankcore and the Branch Acquisition reflects information from
January 1, 1995 to the actual consummation date (July 1, 1995) in the case of
the acquisition of Bankcore and to December 31, 1995 in the case of the Branch
Acquisition, which was completed on February 16, 1996.
Certain insignificant reclassifications have been reflected in the pro
forma information to conform statement presentations.
The pro forma financial data does not give effect to anticipated cost
savings in connection with the Merger and the Purchase Acquisitions.
The pro forma information presented is not necessarily indicative of the
results of operations or the combined financial position that would have
resulted had the Merger and the Purchase Acquisitions been consummated at the
beginning of the applicable periods indicated, nor is it necessarily indicative
of the results of operations in future periods or the future financial position
of the combined entities.
The pro forma information should be read in conjunction with the historical
consolidated financial statements of PHFG and BNHC, including the related notes.
Reference is made in this regard to the Report on Form 10-K filed by PHFG and
BNHC for the year ended December 31, 1995, respectively.
3
<PAGE> 4
<TABLE>
PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
PHFG, BNHC AND THE PURCHASE ACQUISITIONS
DECEMBER 31, 1995
(Unaudited)
(In Thousands, Except Share Data)
<CAPTION>
PHFG
and Pro
Pro Forma BNHC Branch Forma
PHFG BNHC Adjustments Combined Acquisition Combined
---- ---- ----------- -------- ----------- --------
(1) (1)(2)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 124,153 $ 66,291 $ 0 $ 190,444 $ 0 $ 190,444
Federal funds sold 58,255 42,000 0 100,255 0 100,255
Securities available for sale
at market value 485,218 281,430 0 766,648 (32,707) 733,941
Loans held for sale 70,979 0 0 70,979 0 70,979
Loans and leases 2,217,637 560,880 0 2,778,517 218,291 2,996,808
---------- -------- ------- ---------- -------- ----------
Less: Allowance for loan and lease losses 49,138 11,837 0 60,975 4,310 65,285
---------- -------- ------- ---------- -------- ----------
Net loans and leases 2,168,499 549,043 0 2,717,542 213,981 2,931,523
---------- -------- ------- ---------- -------- ----------
Premises and equipment 44,358 11,245 0 55,603 472 56,075
Goodwill and other intangibles 21,176 1,616 0 22,792 18,230 41,022
Other real estate and repossessed assets owned 6,601 7,606 0 14,207 0 14,207
Other assets 99,430 18,605 0 118,035 1,113 119,148
---------- -------- ------- ---------- -------- ----------
Total assets $3,078,669 $977,836 $ 0 $4,056,505 $201,089 $4,257,594
========== ======== ======= ========== ======== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Regular savings $303,504 $254,393 $ 0 $ 557,897 $ 39,940 $ 597,837
Money market access accounts 448,998 41,577 0 490,575 0 490,575
Certificates of deposit 1,124,104 238,971 0 1,363,075 89,237 1,452,312
NOW accounts 215,529 135,952 0 351,481 0 351,481
Demand deposits 269,830 166,833 0 436,663 31,694 468,357
---------- -------- ------- ---------- -------- ----------
2,361,965 837,726 0 3,199,691 160,871 3,360,562
---------- -------- ------- ---------- -------- ----------
Federal funds purchased 1,500 0 0 1,500 0 1,500
Securities sold under repurchase agreements 139,942 41,015 0 180,957 0 180,957
Borrowings from the Federal Home
Loan Bank of Boston 252,446 0 0 252,446 40,000 292,446
Other borrowings 18,928 3,102 0 22,030 0 22,030
Other liabilities 33,420 11,536 2,110 (3) 47,066 218 47,284
---------- -------- ------- ---------- -------- ----------
Total liabilities 2,808,201 893,379 2,110 (3) 3,703,690 201,089 3,904,779
---------- -------- ------- ---------- -------- ----------
Shareholders' equity:
Preferred Stock, par value $0.01;
5,000,000 shares authorized, none issued 0 0 0 0 0
Common Stock, par value $0.01;
30,000,000 shares authorized:
PHFG 175 81 (4) 256 0 256
BNHC 10,160 (10,160)(4) 0 0 0
Paid in capital 186,900 27,289 10,079 (4) 224,268 0 224,268
Retained earnings 88,951 45,491 (2,110)(3) 132,332 0 132,332
Net unrealized gain (loss) on
securities available for sale 2,247 1,517 0 3,764 0 3,764
Treasury stock at cost (7,805) 0 0 (7,805) 0 (7,805)
---------- -------- ------- ---------- -------- ----------
Total shareholders' equity 270,468 84,457 (2,110)(3) 352,815 0 352,815
---------- -------- ------- ---------- -------- ----------
Total liabilities and shareholders' equity $3,078,669 $977,836 $ 0 $4,056,505 $201,089 $4,257,594
========== ======== ======= ========== ======== ==========
</TABLE>
4
<PAGE> 5
Notes to Pro Forma Combined Condensed Consolidated Balance Sheet
(1) During the period from January 1, 1995 through December 31, 1995, PHFG
completed or had pending the following acquisitions accounted for under the
purchase method: (i) the acquisition of five branch offices and related deposits
of approximately $160 million, as well as approximately $218 million of loans,
from Shawmut Bank NH, which was consummated on February 16, 1996, (ii) the
acquisition of Bankcore for an aggregate of 751,600 shares of PHFG Common Stock
and $9.6 million of cash and PHFG Debentures due 2000 (principal amount of $8.8
million), which was completed on July 1, 1995 and (iii) the acquisition of seven
branch offices and related deposits of $46.1 million, as well as $17.1 million
of loans, from Fleet Bank of Maine for $838,000, which was completed on June 15,
1995. Because the purchase of branch offices from Fleet Bank of Maine does not
constitute a sufficient continuity of operations and additional financial data
is not available to develop meaningful and reliable pro forma income statement
information with respect to such acquisition, the pro forma combined condensed
consolidated statements of operations presented herein do not include any pro
forma adjustments related thereto.
Goodwill related to the acquisition of Bankcore amounted to $3.4 million,
deposit base premium related to the Branch Acquisition amounted to $18.2 million
and deposit base premium related to the acquisition of seven branch offices from
Fleet Bank of Maine amounted to $838,000.
In connection with the acquisition of Bankcore, the pro forma financial
information presented herein includes actual repurchases of 751,600 shares of
PHFG Common Stock for an aggregate of $9.6 million. The dedicated stock
repurchase program was completed for the expressed purpose of reissuing the
repurchased shares in conjunction with the Bankcore transaction. The pro forma
financial information presented herein assumes the Bankcore transaction was
financed through a combination of PHFG Debentures due 2000 and cash obtained
from the sale of investments used to repurchase the 751,600 shares of PHFG
Common Stock.
(2) The pending Branch Acquisition reflects PHFG's finance of the purchase
through a combination of borrowings and the sale of securities available for
sale. The allowance for loan and lease losses represents the discount on the
loans acquired because in the judgment of management the discount substantially
represents an adjustment for credit risk.
(3) The restructuring charges relate primarily to terminations of
employment contracts and severance obligations ($600,000) and professional fees
($1.5 million).
(4) Represents the par value of PHFG Common Stock issued in connection with
the Merger, with related adjustment to paid-in capital. The PHFG Common Stock
issued in connection with the Merger was calculated by multiplying the number of
outstanding shares of BNHC Common Stock immediately prior thereto (4,064,165) by
the two-for-one exchange ratio.
5
<PAGE> 6
<TABLE>
PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
PHFG, BNHC AND THE PURCHASE ACQUISITIONS
YEAR ENDED DECEMBER 31, 1995
(Unaudited)
(In Thousands, Except Share Data)
<CAPTION>
PHFG,
Bankcore
and Pro
BNHC Branch Forma
PHFG Bankcore BNHC Combined Acquisition Combined
---- -------- ---- -------- ----------- --------
(1) (3) (3) (2) (3)
<S> <C> <C> <C> <C> <C> <C>
Interest and dividend income:
Interest and fees on loans and leases $ 203,968 $3,269 $ 50,495 $ 257,732 $18,203 $ 275,935
Interest on mortgage-backed investments 12,627 0 0 12,627 0 12,627
Interest on other investments 17,312 1,124(4) 20,431 38,867 (1,754) 37,113
Dividends on equity securities 1,692 0 0 1,692 0 1,692
---------- ------ --------- ---------- ------- ----------
Total interest and dividend income 235,599 4,393 70,926 310,918 16,449 327,367
---------- ------ --------- ---------- ------- ----------
Interest expense:
Interest on deposits 86,171 1,795 22,037 110,003 9,167(7) 119,170
Interest on borrowed funds 24,892 431(4) 1,794 27,117 2,400 29,517
---------- ------ --------- ---------- ------- ----------
Total interest expense 111,063 2,226 23,831 137,120 11,567 148,687
---------- ------ --------- ---------- ------- ----------
Net interest income 124,536 2,167 47,095 173,798 4,882 178,680
Provision for loan losses 2,430 109 1,800 4,339 0 4,339
---------- ------ --------- ---------- ------- ----------
Net interest income after
provision for loan losses 122,106 2,058 45,295 169,459 4,882 174,341
---------- ------ --------- ---------- ------- ----------
Noninterest income:
Mortgage banking services 10,572 0 0 10,572 0 10,572
Customer services 8,298 245 3,216 11,759 301 12,060
Trust and investment advisory services 1,621 0 4,229 5,850 0 5,850
Loan related services 1,059 0 0 1,059 0 1,059
Net securities gains (losses) 116 483 0 599 0 599
Net gains on sales of consumer loans 0 0 0 0 0 0
Other noninterest income 160 279 2,685 3,124 0 3,124
---------- ------ --------- ---------- ------- ----------
21,826 1,007 10,130 32,963 301 33,264
---------- ------ --------- ---------- ------- ----------
Noninterest expenses:
Salaries and employee benefits 48,878 1,023 18,942 68,843 939 69,782
Occupancy 7,531 281 3,173 10,985 0 10,985
Data processing 7,073 0 1,984 9,057 0 9,057
Equipment 4,902 0 1,752 6,654 0 6,654
Advertising and marketing 3,710 0 1,015 4,725 0 4,725
Deposit and other assessments 3,474 127 955 4,556 192 4,748
Collection and carrying costs of
nonperforming assets 1,485 0 997 2,482 0 2,482
Other noninterest expenses 15,604 959(5) 6,354(8) 22,917 753 23,670
---------- ------ --------- ---------- ------- ----------
92,657 2,390 35,172 130,219 1,884 132,103
---------- ------ --------- ---------- ------- ----------
Income before income tax expense (benefit) 51,275 675 20,253 72,203 3,299 75,502
Applicable income tax expense (benefit) 17,243 (115)(6) 7,415 24,543 1,155(6) 25,698
---------- ------ --------- ---------- ------- ----------
Net income (loss) $ 34,032 $790 $ 12,838 $ 47,660 $ 2,144 $ 49,804
========== ====== ========= ========== ======= ==========
Earnings per share $ 2.05 $ 3.16 $ 1.93 $ 2.02
Average shares outstanding 16,569,063 4,064,165 24,697,393 24,697,393
</TABLE>
6
<PAGE> 7
<TABLE>
PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
PHFG, BNHC AND THE PURCHASE ACQUISITIONS
YEAR ENDED DECEMBER 31, 1994
(Unaudited)
(In Thousands, Except Share Data)
<CAPTION>
Pro Forma
PHFG BNHC Combined
---- ---- --------
(3)
<S> <C> <C> <C>
Interest and dividend income:
Interest and fees on loans and leases $ 170,038 $ 45,790 $ 215,828
Interest on mortgage-backed investments 12,409 145 12,554
Interest on other investments 12,417 14,706 27,123
Dividends on equity securities 1,532 211 1,743
---------- --------- ----------
Total interest and dividend income 196,396 60,852 257,248
---------- --------- ----------
Interest expense:
Interest on deposits 68,224 19,696 87,920
Interest on borrowed funds 19,050 1,032 20,082
---------- --------- ----------
Total interest expense 87,274 20,728 108,002
---------- --------- ----------
Net interest income 109,122 40,124 149,246
Provision for loan losses 1,857 1,517 3,374
---------- --------- ----------
Net interest income after
provision for loan losses 107,265 38,607 145,872
---------- --------- ----------
Noninterest income:
Mortgage banking services 8,065 307 8,372
Customer services 6,765 3,931 10,696
Trust and investment advisory services 1,569 3,902 5,471
Loan related services 1,016 1,291 2,307
Net securities gains (losses) (419) 165 (254)
Net gains on sales of consumer loans 33 0 33
Other noninterest income 1,489 92 1,581
---------- --------- ----------
18,518 9,688 28,206
---------- --------- ----------
Noninterest expenses:
Salaries and employee benefits 43,563 18,309 61,872
Occupancy 7,438 3,122 10,560
Data processing 6,174 1,248 7,422
Equipment 4,413 1,669 6,082
Advertising and marketing 3,692 1,055 4,747
Deposit and other assessments 5,735 2,183 7,918
Collection and carrying costs of
nonperforming assets 4,295 1,590 5,885
Other noninterest expenses 15,448 6,434 21,882
---------- --------- ----------
90,758 35,610 126,368
---------- --------- ----------
Income before income tax expense 35,025 12,685 47,710
Applicable income tax expense 9,588 4,074 13,662
---------- --------- ----------
Net income (loss) $ 25,437 $ 8,611 $ 34,048
========== ========= ==========
Earnings per share $1.52 $2.12 $1.37
Average shares outstanding 16,719,800 4,065,000 24,849,800
</TABLE>
7
<PAGE> 8
<TABLE>
PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
PHFG AND BNHC
YEAR ENDED DECEMBER 31, 1993
(Unaudited)
(In Thousands, Except Share Data)
<CAPTION>
Pro Forma
PHFG BNHC Combined
---- ---- --------
(3)
<S> <C> <C> <C>
Interest and dividend income:
Interest and fees on loans and leases $ 157,239 $ 51,608 $ 208,847
Interest on mortgage-backed investments 10,266 224 10,490
Interest on other investments 12,446 10,865 23,311
Dividends on equity securities 1,082 22 1,104
---------- --------- ----------
Total interest and dividend income 181,033 62,719 243,752
---------- --------- ----------
Interest expense:
Interest on deposits 74,728 22,065 96,793
Interest on borrowed funds 14,707 805 15,512
---------- --------- ----------
Total interest expense 89,435 22,870 112,305
---------- --------- ----------
Net interest income 91,598 39,849 131,447
Provision for loan losses 9,779 4,268 14,047
---------- --------- ----------
Net interest income after
provision for loan losses 81,819 35,581 117,400
---------- --------- ----------
Noninterest income:
Mortgage banking services 6,176 1,163 7,339
Customer services 6,671 3,791 10,462
Trust and investment advisory services 1,373 3,321 4,694
Loan related services 1,588 1,323 2,911
Net securities gains 1,001 182 1,183
Net gains on sales of consumer loans 2,576 0 2,576
Other noninterest income 319 44 363
---------- --------- ----------
19,704 9,824 29,528
---------- --------- ----------
Noninterest expenses:
Salaries and employee benefits 38,636 17,651 56,287
Occupancy 6,794 3,043 9,837
Data processing 4,965 815 5,780
Equipment 4,329 1,839 6,168
Advertising and marketing 2,026 938 2,964
Deposit and other assessments 5,843 2,524 8,367
Collection and carrying costs of
nonperforming assets 11,640 3,200 14,840
Other noninterest expenses 13,510 5,865 19,375
---------- --------- ----------
87,743 35,875 123,618
---------- --------- ----------
Income before income tax expense (benefit) 13,780 9,530 23,310
Applicable income tax expense (benefit) (2,339) 3,138 799
---------- --------- ----------
Net income $ 16,119 $ 6,392 $ 22,511
========== ========= ==========
Earnings per share $ 0.97 $ 1.80 $ 0.95
Average shares outstanding 16,601,195 3,552,000 23,705,195
</TABLE>
8
<PAGE> 9
Notes to Pro Forma Combined Condensed Consolidated Statements of Operations
(1) The operations of Bankcore for the six months ended June 30, 1995 are
included in the operations of Bankcore for the year ended December 31, 1995. The
operations of Bankcore subsequent to June 30, 1995 are included in the
operations of PHFG.
(2) The pro forma operations of the Branch Acquisition assume the
following: (i) interest rates on loans and deposits approximate the yields on
actual loans and deposits acquired (including amortization of the deposit
premium over seven years), (ii) reduced investment income to reflect the sale of
securities available for sale, at the weighted average rate earned on the
securities actually sold by PHFG in conjunction with the purchase, (iii)
interest expense on additional borrowings, at short term borrowing rates paid to
the Federal Home Loan Bank of Boston in conjunction with the purchase, and (iv)
estimated noninterest income and noninterest expenses, including FDIC deposit
insurance premiums at actual rates during the periods presented.
(3) PHFG expects to achieve operating cost savings following the Merger and
consummation of the Purchase Acquisitions, primarily through the consolidation
of certain data processing and other back office operations. The operating cost
savings are expected to be achieved in various amounts at various times during
the periods subsequent to the consummation of such transactions, and not ratably
over or at the beginning or end of such periods. No adjustment has been
reflected in the pro forma combined statements of operations for the anticipated
cost savings.
For the reasons noted above, it should not be assumed that the dilution in
PHFG's earnings per share reflected in the pro forma combined condensed
consolidated statements of operations will represent actual dilution with
respect to the Merger or the Purchase Acquisitions.
(4) Includes the implied financing costs associated with the acquisition of
Bankcore. The interest expense of the PHFG Debentures due 2000 is reflected on
an interest-only basis for the Debentures that were actually issued at the time
of the transaction for the applicable periods presented. As a result, interest
on borrowed funds has been increased by $386,000 during the year ended December
31, 1995. Interest income on other investments has been adjusted to reflect the
foregone interest income associated with the cost of the PHFG Common Stock that
was acquired in the open market in a dedicated repurchase program; the shares
were subsequently reissued in conjunction with the acquisition of Bankcore, and
the cash paid in lieu of PHFG Debentures due 2000. As a result, interest on
other investments has been decreased by $290,000 during the year ended December
31, 1995.
(5) Includes the amortization of goodwill associated with the purchase of
Bankcore, which amounted to $114,000 during the year ended December 31, 1995 and
reflects only six months of amortization to adjust for the July 1, 1995
acquisition date.
9
<PAGE> 10
(6) Taxable items have been tax effected at an effective tax rate of 34%.
(7) Reflects the amortization of the estimated deposit premium related to
the Branch Acquisition, which amounted to $2.6 million during the year ended
December 31, 1995. The deposit premium is being amortized over seven years.
(8) Excludes $3.7 million of non-recurring expenses related to the Merger
(consisting primarily of $2.7 million of expenses relating to employment
contracts) incurred during the year ended December 31, 1995, as well as an
additional estimated $2.1 million of non-recurring expenses related to the
Merger, as indicated in Note 3 to the Pro Forma Combined Condensed Consolidated
Balance Sheet.
<TABLE>
(c) The following exhibits are filed with or are incorporated by reference
in this Current Report on Form 8-K:
<CAPTION>
Exhibit Number Description Location
-------------- ----------- --------
<S> <C> <C>
2 Agreement and Plan of Merger, (1)
dated as of October 25, 1995,
among Peoples Heritage, First
Coastal and BNHC
10(a) Stock Option Agreement, dated as (1)
of October 25, 1995, between
Peoples Heritage (as grantee) and
BNHC (as issuer)
10(b) Stock Option Agreement, dated as (1)
of October 25, 1995, between
Peoples Heritage (as issuer) and
BNHC (as grantee)
10(c) Stockholder Agreement, dated as (1)
of October 25, 1995, among
Peoples Heritage and certain
stockholders of BNHC
20(a) Press Release issued on October (1)
25, 1995 with respect to the
Agreement
20(b) Press release issued on February
20, 1996 with respect to the Branch
Acquisition
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
Exhibit Number Description Location
-------------- ----------- --------
<S> <C> <C>
20(c) Press release issued on April 1,
1996 with respect to consummation
of the Merger
23 Consent of Ernst & Young LLP
<FN>
- --------------------
(1) Incorporated by reference to the Current Report on Form 8-K filed by PHFG
with the Securities and Exchange Commission on November 3, 1995.
</TABLE>
11
<PAGE> 12
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.
PEOPLES HERITAGE FINANCIAL GROUP, INC.
Date: April 3, 1996 By: /s/ Peter J. Verrill
--------------------
Peter J. Verrill
Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Treasurer
12
<PAGE> 13
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Number Description Location
-------------- ----------- --------
<S> <C> <C>
2 Agreement and Plan of Merger, (1)
dated as of October 25, 1995,
among Peoples Heritage, First
Coastal and BNHC
10(a) Stock Option Agreement, dated as (1)
of October 25, 1995, between
Peoples Heritage (as grantee) and
BNHC (as issuer)
10(b) Stock Option Agreement, dated as (1)
of October 25, 1995, between
Peoples Heritage (as issuer) and
BNHC (as grantee)
10(c) Stockholder Agreement, dated as (1)
of October 25, 1995, among
Peoples Heritage and certain
stockholders of BNHC
20(a) Press Release issued on October (1)
25, 1995 with respect to the
Agreement
20(b) Press release issued on February
20, 1996 with respect to the Branch
Acquisition
20(c) Press Release issued on April 1,
1996 with respect to consummation
of the Merger
23 Consent of Ernst & Young LLP
<FN>
- -----------------------
(1) Incorporated by reference to the Current Report on Form 8-K filed by PHFG
with the Securities and Exchange Commission on November 3, 1995.
</TABLE>
13
<PAGE> 1
EXHIBIT 20(b)
PEOPLES HERITAGE FINANCIAL GROUP, INC. NEWS RELEASE
For Immediate Release
For Further Information, Contact:
Brian Arsenault, Corporate Communications Officer
(207) 761-8517
Norman Bilodeau, President, The First National Bank of Portsmouth
(603) 433-2961
Peoples Heritage Completes Purchase
of Five Shawmut Bank NH Branches
Portland, Maine, February 20, 1996 -- Peoples Heritage Financial Group, Inc.
(NASDAQ:PHBK) announced today that, at the close of business on Friday, February
16, 1996, it completed the acquisition of five branches of the former Shawmut
Bank NH that were divested as part of the merger of Fleet Financial Group, Inc.
and Shawmut National Corporation. The branches were converted to offices of The
First National Bank of Portsmouth, Peoples' New Hampshire banking subsidiary,
over the holiday weekend.
Two of the five branches are in Manchester. The others are in Bedford, Nashua
and Littleton. The branches have approximately $160 million in deposits. In
addition to various assets related to the acquired branches, The First National
Bank of Portsmouth acquired approximately $217 million of loans in concert with
the transaction, which consist primarily of approximately $179 million of
single-family residential loans.
"The acquisition of the five Shawmut branches is the first and smaller of two
steps we will take in New Hampshire this year to move from a regional to a
statewide presence," said William J. Ryan, President, Chairman and Chief
Executive Officer of Peoples Heritage Financial Group, Inc. "We now have an
increasing banking presence in the important Merrimack Valley region and
southern New Hampshire, where much of the state's population and business
activity is concentrated."
Prior to the acquisition of the five branches, The First National Bank of
Portsmouth operated 15 branches, 10 in the seacoast area of New Hampshire and
five in the North Conway area of the state. During the second quarter of 1996,
Peoples Heritage Financial Group expects to receive regulatory approval to
combine the Bank of New Hampshire, with
<PAGE> 2
29 branches and assets of $977 million, with its New Hampshire banking
operations. The resultant $1.7 billion bank will be the third largest in New
Hampshire and operate under the Bank of New Hampshire name.
Peoples Heritage Financial Group, Inc. is a $3.3 billion multibank and financial
services holding company headquartered in Portland, Maine. The Company's Maine
bank, Peoples Heritage Bank, has assets of approximately $2.4 billion and
operates 61 branches throughout the state. Upon approval of the merger of Bank
of New Hampshire, anticipated during the second quarter, total Company assets
will be approximately $4.3 billion and its New Hampshire bank will operate over
40 branches.
2
<PAGE> 1
EXHIBIT 20(c)
PEOPLES HERITAGE FINANCIAL GROUP, INC. NEWS RELEASE
For Immediate Release
For Further Information, Contact
Brian Arsenault, Corporate Communications Officer
(207) 761-8517
Peoples Heritage Completes Bank of New Hampshire Corporation Purchase
Portland, Maine, April 1, 1996 -- Peoples Heritage Financial Group, Inc.
(NASDAQ:PHBK) announced today that it will finalize its acquisition of Bank of
New Hampshire Corporation (NASDAQ:BNHC) on April 2. All regulatory clearances
have been received.
Following tomorrow's completion of the transaction, Portland, Maine
headquartered Peoples Heritage Financial Group will be a $4.3 billion bank
holding company with the second largest market share in Maine, through its Maine
subsidiary, Peoples Heritage Bank, and the third largest market share in New
Hampshire, through its two New Hampshire subsidiaries, which will be combined by
mid-year.
Bank of New Hampshire operates 29 banking offices in south, central and seacoast
New Hampshire. The Company's existing New Hampshire bank, The First National
Bank of Portsmouth, operates 21 offices primarily in the seacoast region of New
Hampshire and the state's central and Mount Washington Valley areas, will be
merged into Bank of New Hampshire.
"This is a big step in becoming Northern New England's premier community bank,"
said William J. Ryan, the Company's Chairman, President and Chief Executive
Officer. "Our financial performance should increase virtually from the outset as
we broaden our market reach with the highly successful BNH franchise."
Under the terms of the transaction, BNHC shareholders will receive two shares of
Peoples Heritage common stock for each share of BNHC common stock. It is
anticipated that a total of 8,128,330 shares of Peoples Heritage common stock
will be issued in connection with the acquisition.
Based on a closing price of $20.75 per share of Peoples Heritage common stock on
October 25, 1995, when the acquisition was announced, the transaction was valued
at $168.7 million and BNHC shareholders would receive $41.50 in Peoples Heritage
common stock for each
<PAGE> 2
share of BNHC common stock. The exchange equates to 2.04 times BNHC's book value
at September 30, 1995 and 13.2 times its annualized earnings through the nine
months ended September 30, 1995. The closing price of Peoples Heritage common
stock on March 29, 1996 was $21.75 per share. The transaction will be accounted
for as a pooling of interests.
"We believe that our shareholders are receiving a very fair price and that
Peoples Heritage is receiving very good value," said Paul R. Shea, President and
Chief Executive Officer of Bank of New Hampshire. "We gain significant strength
in products and marketing from Peoples Heritage and our customers will still
receive the same community banking approach and commitment to the community that
we have traditionally provided."
Peoples Heritage Financial Group ended 1995 as a $3.1 billion bank and financial
services holding company. In February, its asset size increased to $3.3 billion
with the completion of the purchase of five branches of Shawmut Bank NH divested
as part of the Fleet/Shawmut merger. Bank of New Hampshire Corporation adds
another $1 billion in assets, making Peoples Heritage one of the six largest
banking companies in New England.
2
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Nos. 33-22205, 33-22206 and 33-80310) on Form S-8 of Peoples Heritage Financial
Group, Inc. of our report dated January 18, 1996, with respect to the
consolidated financial statements of Bank of New Hampshire Corporation as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, incorporated by reference in this Current Report (Form 8-K)
of Peoples Heritage Financial Group, Inc.
Ernst & Young LLP
Manchester, New Hampshire
April 3, 1996
