PEOPLES HERITAGE FINANCIAL GROUP, INC.
One Portland Square
P.O. Box 9540
Portland, Maine 04112-9540
(207) 761-8500
January 22, 1997
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street
Washington, DC 20549
Re: Peoples Heritage Financial Group, Inc. (File No. 0-16947)
Current Report on Form 8-K
Dear Sir or Madam:
Following for filing on behalf of Peoples Heritage Financial Group, Inc. is a
Current Report on Form 8-K, including an exhibit thereto. These materials
are being filed pursuant to the provisions of Regulation S-T.
Please do not hesitate to call the undersigned if you have any questions
concerning the following materials
Sincerely yours,
/s/ Peter J. Verrill
Peter J. Verrill
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
January 22, 1997
(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 (Commission File (IRS Employer
jurisdiction Number) Identification No.)
of incorporation)
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)
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Item 5. Other Events
On January 22, 1997, Peoples Heritage Financial Group, Inc. issued the press
release which is included as Exhibit 99(a) hereto.
Item 7. Financial Statements, Pro forma Financial Information and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) The following exhibits are included with this Report:
Exhibit 99(a) Press Release, dated January 22, 1997
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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.
PEOPLES HERITAGE FINANCIAL GROUP, INC.
By: /s/ Peter J. Verrill
Name: Peter J. Verrill
Title: Executive Vice President,
Chief Operating Officer and
Chief Financial Officer
Date: January 22, 1997
<PAGE>
For Immediate Release
For Further Information, Contact
Brian Arsenault, Vice President
Corporate Communications
(207) 761-8517
Record Earnings at Peoples Heritage
Up 18% Over 1995
Portland, Maine, January 22, 1997 -- Peoples Heritage Financial Group Inc.
(NASDAQ:PHBK) today announced record annual net earnings for 1996 and record
quarterly earnings for the fourth quarter ended December 31, 1996. The 1996
annual net earnings of $52.5 million, or $2.10 per share, were 18 percent
higher than 1995's previous record net earnings of $44.5 million, or $1.80
per share. For the quarter ended December 31, 1996, net earnings were $15.5
million, or 63 cents per share, and were 49% higher than
Return on Average Assets (ROA) for 1996 hit an annual historic high of 1.21%
as compared to 1.16% for 1995. For the quarter ended December 31, 1996, ROA
was 1.32% as compared to 1.04% for the quarter ended December 31, 1995.
Return on Average Equity (ROE) for 1996 was also at an historic high of
14.41% as compared to 13.53% in 1995. For the quarter ended December 31,
1996, ROE was 16.83% as compared to 11.95% for the quarter ended December 31,
1995.
"In 1996, we met the multiple challenges of two significant acquisitions,
Bank of New Hampshire and Family Bank, a major stock repurchase program and
the need for strong financial performance to signify that our expansion was
prudent and profitable," said William J. Ryan, Chairman, President and Chief
Executive Officer. "I believe we have measured up in all important ways."
Excluding a nonrecurring pre-tax charge of $1.85 million for the
recapitalization of the Savings Association Insurance Fund and pre-tax
merger-related expenses of $5.1 million, ROA for the year and quarter ended
December 31, 1996 was 1.32% for both periods and ROE for the year and quarter
ended December 31, 1996 was 15.71% and 16.59%, respectively.
Earnings before the amortization of goodwill and deposit premiums ("cash
earnings") in 1996 were $57.4 million, or $2.29 per share. Cash ROA was
1.33% and cash ROE was 17.64% for the year ended December 31, 1996. For the
quarter ended December 31, 1996, cash earnings were $17.0 million, or 69
cents per share, cash ROA was 1.46% and cash ROE was 21.15%.
Excluding the special SAIF and merger related expenses, cash earnings for the
year were $62.5 million, or $2.50 per share, cash ROA for the year and
quarter ended December 31, 1996 was 1.45% and 1.46%, respectively, and cash
ROE for the year and quarter ended December 31, 1996 was 19.07% and 20.75%,
respectively.
The net interest margin for 1996 remained stable with 1995, down slightly
from 4.79% to 4.71%. For the quarter ended December 31, 1996, the net
interest margin was 4.69% as compared to 4.74% for the quarter ended December
31, 1995.
Areas achieving strong increases included mortgage lending where the Company
exceeded $1 billion in originations for the first year in its history, fee
income which increased by 22.4 percent over 1995, consumer loans which rose
by 34.0 percent, and demand deposits which finished 1996 39.4 percent higher
than year-end 1995.
The Company's total assets increased from $4.1 billion, restated for the Bank
of New Hampshire acquisition, at year-end 1995 to $5.4 billion at year-end
1996. The Company's market capitalization doubled from $385.5 million at
year-end 1995 to $790.2 million at year-end 1996.
Based on 28,221,500 shares outstanding, book value per share at December 31,
1996 was $15.48 as compared to $14.16 at December 31, 1995.
Peoples Heritage Financial Group, Inc. is a $5.4 billion multi-state bank
holding and financial services Company headquartered in Portland, Maine. Its
Maine banking subsidiary, Peoples Heritage Bank, has assets of $2.64 billion
and operates 66 banking centers throughout Maine, four of them as Oxford Bank
& Trust, a division of Peoples Heritage Bank. The Company's New Hampshire
subsidiary, Bank of New Hampshire, has assets of $1.77 million and operates
44 banking offices throughout New Hampshire. The Company's Massachusetts
subsidiary, Family Bank, has assets of $1.01 billion and operates 17 banking
offices in northern Massachusetts and five in southern New Hampshire.
###
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<CAPTION>
Peoples Heritage Financial Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<S> <C> <C> <C>
December 31,
(In Thousands) 1996 1995 % Change
Assets
Cash and due from banks $ 276,995 $ 190,436 45.45%
Federal funds sold and other short
term investments 83,000 100,255 -17.21
Securities available for sale 1,045,069 766,648 36.32
Loans held for sale 103,270 70,979 45.49
Loans and leases:
Residential real estate mortgages 1,176,874 798,076 47.46
Commercial real estate mortgages 962,375 797,686 20.65
Commercial business loans and leases 477,402 408,592 16.84
Consumer loans and leases 1,037,949 774,229 34.06
Total loans and leases 3,654,600 2,778,583 31.53
Less: Allowance for loan losses 67,488 60,975 10.68
Net loans and leases 3,587,112 2,717,608 32.00
Bank premises and equipment 73,956 56,021 32.01
Goodwill and other intangible assets 71,649 22,792 214.35
Mortgage servicing rights 33,314 20,309 64.03
Other real estate and repossessed
assets owned 11,818 14,232 -16.96
Other assets 112,215 98,846 13.53
$5,398,398 $4,058,126 33.03%
Liabilities an Shareholders' Equity
Deposits:
Regular savings $ 760,340 $ 557,896 36.29%
Money market access accounts 525,518 490,575 7.12
Certificates of deposit 1,796,521 1,363,095 31.80
NOW accounts 497,930 351,481 41.67
Demand deposits 604,980 434,091 39.37
Total deposits 4,185,289 3,197,138 30.91
Federal funds purchased -0- 1,500 -100.00
Borrowings from Federal Home Loan Bank 470,080 252,446 86.21
Securities sold under repurchase agreements 197,005 180,957 8.87
Other borrowings 23,884 22,029 8.42
Other liabilities 85,130 49,131 73.27
Total liabilities 4,961,388 3,703,201 33.98
Shareholders' equity 437,010 354,925 23.13
$5,398,398 $4,058,126 33.03%
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</TABLE>
<TABLE>
<CAPTION>
Peoples Heritage Financial Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
<S> <C> <C> <C> <C> <C> <C>
(In Thousands except number Twelve Months Ended Three Months Ended
of shares and per share data) December 31, December 31,
1996 1997 % Change 1996 1995 % Change
<S> <C> <C> <C> <C> <C> <C>
Interest and dividend income $ 341,172 $ 305,849 11.55% $ 90,826 $ 80,181 13.28%
Interest expense 150,599 134,895 11.64 40,168 35,855 12.03
Net interest income 190,573 170,954 11.48 50,659 44,326 14.29
Provision for loan losses 900 4,230 -78.72 -0- 1,080 -100.00
Net income after provision
for loan losses 189,673 166,724 13.76 50,659 43,246 17.14
Noninterest income:
Customer services 15,353 11,908 28.93 4,451 3,057 45.58
Mortgage banking services 12,940 10,849 19.27 3,090 2,890 6.93
Trust and investment
advisory services 7,233 5,850 23.64 1,780 1,571 13.28
Loan related services 2,073 1,907 8.70 618 465 32.97
Net gains (losses) on
sales of securities 507 116 NM 4 223 -98.21
Other noninterest income 342 787 -58.55 37 125 -70.63
38,448 31,417 22.38 9,979 8,331 19.79
Noninterest expense:
Salaries and employee
benefits 73,303 67,472 8.64 19,283 17,474 10.35
Data processing 12,528 8,924 40.38 3,633 2,546 42.68
Occupancy 12,320 10,574 16.51 2,999 2,719 10.28
Equipment 8,479 6,844 23.90 2,284 1,945 17.45
Merger expenses 5,105 4,958 2.96 -0- 3,700 0.00
Deposit and other
assessments 3,050 4,497 -32.18 111 621 -82.09
Collection and carrying
costs of nonperforming
assets 1,573 2,595 -39.38 189 613 -69.23
Other noninterest expense 31,715 24,416 29.89 9,150 5,603 63.30
148,073 130,280 13.66 37,649 35,221 6.89
Income before income tax
expense 80,048 67,861 17.96 22,990 16,356 40.56
Income tax expense 27,568 23,375 17.94 7,450 5,930 25.65
Net income $ 52,480 $ 44,486 17.97 $ 15,540 $ 10,426 49.04
Weighted average shares
outstanding 25,035,041 24,696,393 1.37% 24,662,214 24,819,048 -0.63%
Earnings per share $ 2.10 $ 1.80 16.67 $ 0.63 $ 0.42 51.46
Cash earnings per share 2.29 1.89 21.16 0.69 0.44 56.82
Earnings per share (excluding
merger expenses and SAIF
assessment) $ 2.30 1.94 18.42 0.63 0.53 19.14
Cash earnings per share
excluding merger expenses
and SAIF assessment) $ 2.50 2.03 22.78 0.69 0.55 24.91
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</TABLE>
<TABLE>
<CAPTION>
Peoples Heritage Financial Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
<S> <C> <C> <C> <C>
(In thousands except number Twelve Months Ended December 31, Three Months Ended December 31,
of shares and per share data) 1996 1995 1996 1995
Net interest income $ 190,573 $ 170,954 $ 50,659 $ 44,326
Net income 52,480 44,486 15,540 10,426
Number of shares outstanding
(end of period) 28,221,500 25,072,488 28,221,500 25,072,488
Weighted average number of shares
outstanding 25,035,041 24,696,393 24,662,214 24,819,048
Earnings per share $ 2.10 $ 1.80 $ 0.63 0.42
Cash earnings per share 2.29 1.89 0.69 0.44
Earnings per share (excluding
merger expenses and SAIF
assessment) 2.30 1.94 0.63 0.53
Cash earnings per share (excluding
merger expenses and SAIF
assessment) 2.50 2.03 0.69 0.55
Shareholders' equity 437,010 354,925 437,010 354,925
Book value per share 15.48 14.16 15.48 14.16
Tangible book value per share 12.95 13.25 12.95 13.25
Ratios:
Net interest margin (net interest as a
% of average earning assets (1) 4.71% 4.79% 4.69% 4.74%
Net interest spread (yield on earning
assets minus yield on interest-
bearing deposits and borrowings) (1) 4.12 4.20 4.11 4.11
Return on average assets 1.21 1.16 1.32 1.04
Cash return on average assets 1.33 1.22 1.46 1.10
Return on average assets (excluding
merger expenses and SAIF assessment) 1.32 1.25 1.32 1.30
Cash return on average assets
(excluding merger expenses and
SAIF assessment) 1.45 1.31 1.46 1.37
Return on average equity 14.41 13.53 16.83 11.95
Cash return on average equity 17.64 15.40 21.15 13.42
Return on average equity (excluding
merger expenses and SAIF assessment) 15.71 14.66 16.59 15.73
Cash return on average equity (excluding
merger expenses and SAIF assessment) 19.07 16.62 20.75 17.61
Tier I leverage capital ratio at
end of period 7.96 8.33 7.96 8.33
Full service banking offices 132 106 132 106
Nonperforming loans as a % of
outstanding loans 1.16% 1.53% 1.16% 1.53%
Nonperforming assets as a % of
total assets 1.01 1.40 1.01 1.40
(1) Adjusted to fully taxable equivalent basis.
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