<PAGE> 1
As filed with the Securities and Exchange Commission on December 10, 1998
Registration No. 333-67961
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PEOPLES HERITAGE FINANCIAL GROUP, INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Maine 6120 01-0437984
- ------------------------ ------------------------- -------------------
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorporation Industrial Classification Identification No.)
or organization) Code No.)
P.O. Box 9540
One Portland Square
Portland, Maine 04112-9540
(207) 761-8500
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(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
William J. Ryan
Chairman, President and Chief Executive Officer
Peoples Heritage Financial Group, Inc.
P.O. Box 9540
One Portland Square
Portland, Maine 04112-9540
(207) 761-8500
--------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with a copy to:
Gerard L. Hawkins, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this registration statement becomes effective and the
registrant's pending acquisition of A.D. Davis, Incorporated is consummated.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
186,377 SHARES
PEOPLES HERITAGE FINANCIAL GROUP, INC.
COMMON STOCK
This Prospectus relates to the public offering, which is not being
underwritten, of up to 186,377 shares (the "Offered Stock") of Common Stock, par
value $0.01 per share (the "Common Stock"), of Peoples Heritage Financial Group,
Inc. (the "Company") which may be offered from time to time for the account of
the selling stockholders named herein (the "Selling Stockholders"). The shares
of Offered Stock will be issued to the Selling Stockholders in connection with
the Company's acquisition of A.D. Davis, Incorporated ("A.D. Davis") pursuant to
the exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), provided by Section 4(2) thereof. The Company
will not receive any of the proceeds from the sale of shares of Offered Stock by
the Selling Stockholders.
The shares of Offered Stock may be offered and sold from time to time
by the Selling Stockholders directly or through broker-dealers who may act
solely as agents, or who may acquire shares as principals. The distribution of
the shares of Offered Stock may be effected in one or more transactions that may
take place through the Nasdaq Stock Market, including block trades or ordinary
broker's transactions, or through privately-negotiated transactions, or in
accordance with Rule 144 under the Securities Act, or through a combination of
any such method of sale, at market prices or at negotiated prices. Usual and
customary or negotiated brokerage fees or commissions may be paid by the Selling
Stockholders in connection with such sales. The Selling Stockholders and any
dealers or agents that participate in the distribution of the Offered Stock may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the sale of the Offered Stock by them and any commissions received by
any such dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act. See "Plan of Distribution."
The Common Stock is traded on the Nasdaq Stock Market's National Market
under the symbol "PHBK." On December 9, 1998, the last sale price of the Common
Stock as reported on the Nasdaq Stock Market's National Market was $19.56.
SEE "RISK FACTORS" BEGINNING ON PAGE FOUR FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED CAREFULLY BY PROSPECTIVE INVESTORS IN THE
COMMON STOCK OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY OR INSTRUMENTALITY.
The date of this Prospectus is December 10, 1998.
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WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). You may read and copy any reports, proxy statements or other
information filed by the Company at the Commission's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the
Commission. Please call the Commission at 1-800-SEC-0330 for further information
on the operation of the Commission's public reference rooms. The Company's
filings with the Commission are also available to the public from document
retrieval services and at the Commission Internet website (http://www.sec.gov).
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
and the rules and regulations thereunder. This Prospectus is a part of the
Registration Statement. As permitted by the Securities Act, this Prospectus does
not contain all of the information you can find in the Registration Statement.
The Registration Statement is available for inspection and copying as set forth
above.
The Commission allows the Company to "incorporate by reference" into
this Prospectus, which means that the Company can disclose important information
to you by referring you to another document filed separately with the
Commission. The information incorporated by reference is considered to be part
of this Prospectus, except for any information superseded by information
contained in later-filed documents incorporated by reference in this Prospectus.
The Company incorporates by reference the documents filed by it with the
Commission listed below and any future filings made by it with the Commission
prior to the termination of the offering made hereby under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
Company Filings (File No. 0-16947) Period/Date
- ---------------------------------- -----------
Annual Report on Form 10-K Year ended December 31, 1997
Quarterly Report on Form 10-Q Quarters ended March 31, 1998;
June 30, 1998 and
September 30, 1998
Current Reports on Form 8-K Filed on April 22, April 28,
July 20, as amended on July 24,
and July 23, 1998
You may request a copy of these filings, at no cost, by writing or
telephoning the Company at the following address:
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Peoples Heritage Financial Group, Inc.
P.O. Box 9540
One Portland Square
Portland, Maine 04112-9540
Attention: Brian Arsenault
(207) 761-8517
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. THE COMPANY HAS NOT AUTHORIZED ANYONE ELSE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM THAT WHICH IS CONTAINED IN
THIS PROSPECTUS. MOREOVER, NO OFFER OF THE COMMON STOCK IS BEING MADE IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS
PROSPECTUS SPEAKS ONLY AS OF ITS DATE UNLESS THE INFORMATION SPECIFICALLY
INDICATES THAT ANOTHER DATE APPLIES.
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RISK FACTORS
Prospective investors should consider carefully the following factors
in addition to the other information included or incorporated by reference in
this Prospectus before making an investment in the Common Stock. Certain
statements contained or incorporated by reference herein are not based on
historical facts and are "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. These
forward-looking statements, which are based on various assumptions (some of
which are beyond the Company's control), may be identified by reference to a
future period(s) or by the use of forward-looking terminology, such as
"anticipate," "believe," "commitment," "consider," "continue," "could,"
"encourage," "estimate," "expect," "intend," "may," "plan," "present,"
"propose," "prospect," "will," future or conditional verb tenses, similar terms,
variations on such terms or negatives of such terms. Although the Company
believes that the anticipated results or other expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can give no
assurance that those results or expectations will be attained. Actual results
could differ materially from those indicated in such statements due to risks,
uncertainties and changes with respect to a variety of factors, including, but
not limited to, those described below and other factors generally affecting the
banking industry. Some, but not all, of these risks are summarized below as well
as in the Company's reports and filings with the Commission, including its
periodic reports under the Exchange Act. The Company does not undertake, and
specifically disclaims any obligation, to publicly release the results of any
revisions which may be made to any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after the
date of such statements.
Risks Related to Certain Lending Activities
The Company's lending activities include loans secured by existing
multi-family residential and commercial real estate. In addition, from time to
time the Company originates loans for the construction of multi-family
residential real estate and land acquisition and development loans. Multi-family
residential, commercial real estate and construction lending generally is
considered to involve a higher degree of risk than single-family residential
lending due to a variety of factors, including generally larger loan balances,
the dependency on successful completion or operation of the project for
repayment, the difficulties in estimating construction costs and loan terms
which often do not require full amortization of the loan over its term and,
instead, provide for a balloon payment at stated maturity. There can be no
assurance that the Company's multi-family residential, commercial real estate
and construction lending activities will not be adversely affected by these and
the other risks related to such activities.
The Company's lending activities also include commercial business loans
and leases to small to medium businesses, which generally are secured by various
equipment, machinery and other corporate assets, and a wide variety of consumer
loans, including home improvement loans, home equity loans, education loans and
loans secured by automobiles, boats, mobile homes, recreational vehicles and
other personal property. Although commercial business loans and leases and
consumer loans generally have shorter terms and higher interests rates than
mortgage loans, they generally
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involve more risk than mortgage loans because of the nature of, or in certain
cases the absence of, the collateral which secures such loans.
Effects of Changes in Interests Rates
The Company's operating results depend to a large extent on its net
interest income, which is the difference between the interest income earned on
its interest-earning assets and the interest expense incurred in connection with
its interest-bearing liabilities. Changes in the general level of interest rates
can affect the Company's net interest income by affecting the spread between the
Company's interest-earning assets and interest-bearing liabilities, as well as,
among other things, the ability of the Company to originate loans; the value of
the Company's interest-earning assets and its ability to realize gains from the
sale of such assets; the average life of the Company's interest-earning assets;
the value of the Company's mortgage servicing rights; and the Company's ability
to obtain deposits in competition with other available investment alternatives.
Interests rates are highly sensitive to many factors, including governmental
monetary policies, domestic and international economic and political conditions
and other factors beyond the control of the Company. Although management
believes that the estimated maturities of the Company's interest-earning assets
currently are well balanced in relation to the estimated maturities of its
interest-bearing liabilities (which involves various estimates as to how changes
in the general level of interest rates will impact such assets and liabilities),
there can be no assurance that the profitability of the Company would not be
adversely affected during any period of changes in interest rates.
Dependence upon Economic Conditions
The Company's profitability is primarily dependent on the profitability
of its banking subsidiaries, which derive substantially all of their loans,
deposits and other business from Maine, New Hampshire and north-central
Massachusetts. The banking industry in northern New England is affected by
general economic conditions such as inflation, recession, unemployment and other
factors beyond the Company's control. During the late 1980s and early 1990s,
severely depressed real estate prices materially and adversely affected the
northern New England economies, causing a severe recession and significant
unemployment in the region. Although these economies have improved considerably
more recently, there can be no assurance that the Company will be able to
withstand adverse economic changes in the northern New England economies should
they occur, or that adverse developments in general economic conditions in the
national economy will not adversely affect the Company's financial condition or
results of operations. Accordingly, the Company will remain subject to risks
associated with prolonged declines in either local or national economies.
Restrictions on Paying Dividends
The Company's ability to pay dividends to its shareholders depends to a
large extent upon the dividends the Company receives from its banking
subsidiaries. Dividends paid by the Company's banking subsidiaries are subject
to restrictions under various federal and state banking
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laws. In addition, the Company and each of its banking subsidiaries must
maintain certain capital levels, which may restrict the ability of such banking
subsidiaries to pay dividends to the Company and the Company to pay dividends to
its shareholders.
Preemptive Rights Denied and Dilution
The Company's Amended and Restated Articles of Incorporation, as
amended (the "Articles"), do not provide shareholders with a preemptive right to
subscribe for additional shares of Common Stock upon any increase thereof. Thus,
upon the issuance of any additional shares of Common Stock or other voting
securities of the Company or securities convertible into Common Stock or other
voting securities of the Company, persons who receive shares of Common Stock in
transactions with the Company may be unable to maintain their pro rata voting or
ownership interest in the Company.
Anti-Takeover Provisions
The Articles authorize the Board of Directors of the Company to issue
shares of preferred stock of the Company ("Preferred Stock") without shareholder
approval and upon such terms as the Board of Directors may determine. The rights
of the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of any Preferred Stock that may be issued in the
future. The issuance of Preferred Stock, while providing desirable flexibility
in connection with possible acquisitions, financings and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from acquiring, a controlling interest
in the Company.
The Articles and the Bylaws of the Company contain a number of other
provisions which may be deemed to have the effect of discouraging or delaying
attempts to gain control of the Company, including provisions in the Articles:
(i) classifying the Board of Directors of the Company into three classes to
serve for three years with one class being elected annually; (ii) authorizing
the Board of Directors of the Company to fix the size of the Board between three
and 25 directors; (iii) authorizing directors to fill vacancies in the Board;
(iv) increasing the vote for removal of directors by shareholders; (v)
increasing the amount of stock required to be held by shareholders seeking to
call a special meeting of shareholders; and (vi) requiring an increased vote of
shareholders to approve certain business combinations unless certain price and
procedural requirements are met or the Board of Directors of the Company
approves the business combination in the manner provided therein. The provisions
in the Bylaws of the Company include specific conditions under which (i) persons
may be nominated for election as directors of the Company at an annual meeting
of shareholders; and (ii) business may be transacted at an annual meeting of
shareholders.
In addition to the foregoing, the Company has adopted a shareholder
rights plan which generally would cause substantial dilution to a person or
group of persons that acquires 20% or more of the outstanding Common Stock if a
Triggering Event (as defined) thereafter occurs without the
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rights issued pursuant to such plan having been redeemed by the Board of
Directors of the Company. Sections 611-A and 910 of the Maine Business
Corporation Act also may have anti-takeover effects.
The foregoing provisions and instruments may discourage potential proxy
contests and other takeover attempts, particularly those which have not been
negotiated with the Board of Directors of the Company. Accordingly, holders of
Common Stock may be deprived of an opportunity to sell their shares of Common
Stock at a substantial premium over the market price of such shares. In
addition, federal law also requires the approval of the Federal Reserve Board
prior to the acquisition of "control" of a bank holding company.
Governmental Regulation
The Company and its subsidiaries are subject to extensive federal and
state governmental supervision and regulation, which are intended primarily for
the protection of depositors. In addition, the Company and its subsidiaries are
subject to changes in federal and state laws, as well as changes in regulations,
governmental policies and accounting principles. The effects of any such
potential changes cannot be predicted but could adversely affect the business
and operations of the Company and its subsidiaries in the future.
Competition
The Company and its subsidiaries are subject to vigorous competition in
all aspects and areas of their business from banks and other financial
institutions, including savings and loan associations, savings banks, finance
companies, credit unions and other providers of financial services, such as
money market mutual funds, brokerage firms, consumer finance companies and
insurance companies. The Company also competes with non-financial institutions,
including retail stores that maintain their own credit programs and governmental
agencies that make available low cost or guaranteed loans to certain borrowers.
Certain of the Company's competitors are larger financial institutions with
substantially greater resources, lending limits, larger branch systems and a
wider array of commercial banking services.
The Company generally has been able to compete effectively with other
financial institutions by emphasizing customer service, including local
decision-making, by establishing long-term customer relationships and building
customer loyalty and by providing products and services designed to address the
specific needs of its customers. No assurance can be given, however, that the
Company will continue to be able to compete effectively with other financial
institutions in the future.
The financial services industry is likely to become even more
competitive as further technological advances enable more companies to provide
financial services. These technical advances may diminish the importance of
depository institutions and other financial intermediaries in the transfer of
funds between parties.
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Year 2000
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. If not corrected, many computer
applications could fail or create erroneous results by or at the Year 2000. The
Company's Year 2000 project is monitored by a Year 2000 senior management
committee, which reports to the Company's Board of Directors on a quarterly
basis. The Company has completed its assessment of Year 2000 issues, developed a
plan and arranged for the required resources to complete the necessary
remediation efforts. The Company will utilize both internal and external
resources to reprogram, or replace, and test the software and hardware for Year
2000 modification.
The Company is in the process of remediating, testing and returning to
production all of its critical applications. The Company expects to have
substantially completed the remediation of all critical applications by the end
of 1998. The Company has established a separate test environment to accommodate
its Year 2000 specific testing activity and the anticipated need to test with
its customers and other third parties during 1999.
The Company's Year 2000 project management has contacted all critical
service providers to discuss and assess their Year 2000 readiness. In addition,
the Company is receiving written and verbal verification from its significant
third party service providers and vendors as to their Year 2000 readiness. The
Company will begin Year 2000 testing with several of these key vendors in the
fourth quarter of 1998 and plans to complete testing with service providers by
the end of the first quarter of 1999.
Although the Company continues to discuss these matters with, obtain
written certification from and test the systems of such other companies as to
the Year 2000 compliance, there can be no assurance that any potential impact
associated with incompatible systems after December 31, 1999 would not have a
material adverse effect on the Company's business, financial condition or
results of operations. The Company anticipates that the incremental cost of the
Year 2000 project will not exceed $2.6 million. The Company has incurred $1.1
million of expenses in connection with this project in 1998. For additional
information in this regard, see the Company's most recent reports under the
Exchange Act, which may be obtained in the manner set forth under "Where You Can
Find More Information."
Acquisitions
Acquisitions have been, and are expected to continue to be, an
important part of the expansion of the Company's business. As of September 30,
1998, the Company has completed three acquisitions which have been accounted for
under the pooling-of-interests method and seven acquisitions accounted for under
the purchase method since January 1, 1994. PHFG continually evaluates
acquisition opportunities and frequently conducts due diligence in connection
with
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possible acquisitions. As a result, acquisition discussions and, in some cases,
negotiations frequently take place and future acquisitions involving cash, debt
or equity securities can be expected. Acquisitions typically involve the payment
of a premium over book and market values, and therefore, some dilution of PHFG's
book value and net income per common share may occur in connection with any
future transactions.
THE COMPANY
The Company is a multi-bank and financial services holding company
which is incorporated under the laws of the State of Maine. The Company conducts
business from its executive offices in Portland, Maine and, as of September 30,
1998, 188 banking offices located throughout Maine, New Hampshire and northern
Massachusetts. At September 30, 1998, the Company had consolidated assets of
$9.9 billion and consolidated shareholders' equity of $750.7 million. Based on
total assets at September 30, 1998, the Company is the largest independent bank
holding company headquartered in northern New England and the fifth largest
independent bank holding company headquartered in New England.
The Company offers a broad range of commercial and consumer banking
services and products and trust and investment advisory services through three
wholly-owned banking subsidiaries: Peoples Heritage Bank, Bank of New Hampshire
and Family Bank, FSB. Peoples Heritage Bank is a Maine-chartered bank, which
operates offices throughout Maine and, through subsidiaries, engages in mortgage
banking, financial planning, equipment leasing, securities brokerage and
insurance brokerage activities. At September 30, 1998, Peoples Heritage Bank had
consolidated assets of $4.2 billion and consolidated shareholder's equity of
$315.3 million. Bank of New Hampshire is a New Hampshire-chartered commercial
bank which operates offices throughout New Hampshire. At September 30, 1998,
Bank of New Hampshire had consolidated assets of $4.3 billion and consolidated
shareholder's equity of $332.3 million. Family Bank, FSB is a
federally-chartered savings bank which operates offices in the Merrimack Valley
area of Greater Haverhill and Greater Lowell, Massachusetts and in southern New
Hampshire. At September 30, 1998, Family Bank, FSB had consolidated assets of
$1.6 billion and consolidated shareholder's equity of $143.1 million.
The Company's pending acquisition of SIS Bancorp, Inc., a multibank
holding company headquartered in Springfield, Massachusetts which had $1.9
billion of assets at September 30, 1998, is scheduled to be completed on January
1, 1999 and will be accounted for as a pooling-of-interests.
The executive offices of the Company are located at One Portland
Square, Portland, Maine 04112-9540, and its telephone number is (207) 761-8500.
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SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, Except Per Share Data)
The following selected consolidated financial data for the five years
ended December 31, 1997 is derived in part from the audited consolidated
financial statements of the Company which give retroactive effect to the
Company's acquisition of CFX Corporation under the pooling-of-interests method
of accounting on April 10, 1998. The following selected consolidated financial
data at September 30, 1998 and for the nine months ended September 30, 1998 and
1997 is derived from unaudited consolidated financial statements of the Company,
which include all adjustments, consisting of normal recurring accruals, which
the Company considers necessary for a fair presentation of the financial
position and results of operations at such date and for such periods. Operating
results for the nine months ended September 30, 1998 are not necessarily
indicative of the results that may be expected for any other interim period or
the entire year ending December 31, 1998. The selected consolidated financial
data set forth below should be read in conjunction with, and is qualified in its
entirety by, consolidated financial statements of the Company, including the
related notes, incorporated herein by reference. See "Where You Can Find More
Information."
<TABLE>
<CAPTION>
December 31,
September 30, ---------------------------------------------------------------
BALANCE SHEET DATA: 1998 1997 1996 1995 1994 1993
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total assets $9,882,729 $9,668,242 $7,767,655 $6,168,281 $5,673,436 $5,494,810
Debt and equity securities, net 1,881,830 1,830,942 1,564,647 1,307,767 1,305,269 1,356,368
Total loans and leases, net(1) 6,337,560 6,434,238 5,161,179 4,024,307 3,740,024 3,420,416
Goodwill and other intangibles 119,440 127,416 80,884 32,676 31,189 33,879
Deposits 6,882,172 6,747,419 5,936,430 4,834,969 4,426,847 4,457,219
Borrowings 2,046,135 1,982,190 1,042,312 674,694 670,829 450,637
Shareholders' equity 750,654 720,783 676,847 586,500 515,423 495,522
Nonperforming assets 65,693 69,427 62,266 67,394 89,295 145,651
Book value per share 8.55 8.23 7.71 7.24 6.45 6.25
Tangible book value per share 7.19 6.79 6.78 6.84 6.08 5.83
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
------------------- ---------------------------------------------------
OPERATIONS DATA: 1998 1997 1997 1996 1995 1994 1993
-------- -------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest and dividend income $535,306 $464,247 $641,751 $509,477 $454,657 $383,393 $369,388
Interest expense 261,328 211,382 297,275 230,182 202,760 159,656 165,306
-------- -------- -------- -------- -------- -------- --------
Net interest income 273,978 252,865 344,476 279,295 251,897 223,737 204,082
Provision for loan and lease losses 9,702 3,385 4,548 5,185 8,044 6,996 28,077
-------- -------- -------- -------- -------- -------- --------
Net interest income after provision
for loan and lease losses 264,276 249,480 339,928 274,110 243,853 216,741 176,005
Net securities gains 3,506 1,372 2,697 3,287 2,499 401 1,183
Other noninterest income 74,010 55,117 79,783 57,423 46,656 41,625 42,871
Noninterest expense
(excluding special charges) 207,098 189,439 261,965 209,716 188,573 186,287 181,071
Special charges(2) 35,374 11,031 18,591 9,627 4,958 559 300
-------- -------- ------- ------- ------- -------- --------
Income before income tax expense 99,320 105,499 141,852 115,477 99,477 71,921 38,688
Income tax expense 31,324 37,105 49,517 39,444 33,437 21,136 3,372
-------- -------- ------- ------- ------- -------- --------
Net income $ 67,996 $ 68,394 $ 92,335 $ 76,033 $ 66,040 $ 50,785 $ 35,316
======== ======== ======== ======== ======== ======== ========
Net income per share(3):
Basic $ 0.77 $ 0.79 $ 1.06 $ 0.94 $ 0.82 $ 0.64 $ 0.46
Diluted 0.76 0.77 1.04 0.92 0.80 0.63 0.46
Dividends per share 0.33 0.28 0.46 0.34 0.29 0.18 0.11
</TABLE>
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<TABLE>
<CAPTION>
At or For the
Nine Months Ended
September 30, At or For the Year Ended December 31,
----------------- ----------------------------------------------
OTHER DATA: 1998 1997 1997 1996 1995 1994 1993
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Return on average assets 0.93% 1.12% 1.09% 1.15% 1.13% 0.92% 0.67%
Return on average equity(4) 12.50 13.28 13.29 12.69 12.04 9.97 7.56
Average equity to average
assets(4) 7.40 8.47 8.23 9.05 9.35 9.19 8.83
Interest rate spread(4) 3.58 3.90 3.86 3.98 4.06 3.96 *
Net interest margin(4) 4.13 4.50 4.45 4.56 4.64 4.40 4.21
Tier 1 leverage capital ratio
at end of period 7.49 8.51 7.51 8.56 9.14 8.93 8.77
Dividend payout ratio 41.23 41.35 43.63 38.75 35.69 28.49 24.14
Efficiency ratio(5) 57.56 59.54 59.78 62.28 63.16 70.20 73.32
Nonperforming assets as a percent
of total assets at end of period 0.66 0.70 0.72 0.80 1.09 1.57 2.65
</TABLE>
- ----------
(1) Does not include loans held for sale.
(2) Special charges consist of merger-related expenses and, in 1997, a $7.2
million pre-tax charge relating to CFX Funding.
(3) Excluding special charges, PHFG's basic income per share would have
been $1.05, $0.86, $1.20, $1.03, $0.86, $0.65 and $0.46 for the nine months
ended September 30, 1998 and 1997 and the years ended December 31, 1997, 1996,
1995, 1994 and 1993, respectively, and PHFG's diluted income per share would
have been $1.03, $0.85, $1.18, $1.01, $0.85, $0.64 and $0.46 for the same
respective periods.
(4) Excludes the effect of unrealized gains or losses on securities
available for sale.
(5) The efficiency ratio represents operating expenses, excluding
distributions on securities of subsidiary trust and special charges, as a
percentage of net interest income and noninterest income, excluding net
securities gains.
* Information is not available.
11
<PAGE> 13
COMMON STOCK AND DIVIDEND INFORMATION
The Common Stock is traded on the Nasdaq Stock Market's National
Market. The following table sets forth the high and low prices of the Common
Stock as reported on the Nasdaq Stock Market's National Market and the dividends
declared per share of Common Stock for the periods indicated. The prices and
dividends per share have been retroactively adjusted to reflect a two-for-one
split of the Common Stock effective May 18, 1998.
<TABLE>
<CAPTION>
Market Price
------------------ Dividends Declared
High Low Per Share
------ ------ ------------------
<S> <C> <C> <C>
1998
- -----------------------------------
First Quarter $24.66 $18.69 $ 0.11
Second Quarter 26.75 21.56 0.11
Third Quarter 26.25 15.69 0.11
Fourth Quarter (through December 9) 21.25 12.81 0.11
1997
- -----------------------------------
First Quarter 16.25 12.94 0.09
Second Quarter 19.00 13.00 0.09
Third Quarter 21.56 18.00 0.095
Fourth Quarter 23.81 18.94 0.105
1996
- -----------------------------------
First Quarter 11.38 9.50 0.08
Second Quarter 11.13 9.69 0.085
Third Quarter 11.81 9.50 0.085
Fourth Quarter 14.31 11.25 0.085
</TABLE>
As of September 30, 1998, there were 87,783,810 shares of Common Stock
outstanding which were held by approximately 12,000 holders of record. Such
number of record holders does not reflect the number of persons or entities
holding stock in nominee name through banks, brokerage firms and other nominees.
The Company has historically paid quarterly dividends on the Common
Stock and currently intends to continue to do so in the foreseeable future. The
Company's ability to pay dividends depends on a number of factors, however,
including restrictions on the ability of its banking subsidiaries to pay
dividends under federal and state banking laws, and as a result there can be no
assurance that dividends will be paid in the future.
12
<PAGE> 14
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of Offered
Stock. See "Selling Stockholders" for a list of those persons who will receive
the proceeds from such sales.
SELLING STOCKHOLDERS
This Prospectus covers the offer and sale by each of the Selling
Stockholders of the Common Stock to be issued to them in connection with the
Company's acquisition of A.D. Davis. The Selling Stockholders will receive an
aggregate of 186,377 shares of Common Stock pursuant to this acquisition. The
Company has agreed that it will cause to be registered under the Securities Act
the resale of the Common Stock received by the Selling Stockholders. In
addition, the Company has agreed to indemnify the Selling Stockholders against
certain liabilities arising out of any actual or alleged material misstatements
or omissions in the Registration Statement, other than liabilities arising from
information supplied by the Selling Stockholders for use in the Registration
Statement. Each Selling Stockholder, severally but not jointly, has agreed to
indemnify the Company against liabilities arising out of any actual or alleged
material misstatements or omissions in the Registration Statement insofar as
such misstatements or omissions were made in reliance upon written information
furnished to the Company by such Selling Stockholder expressly for use in the
Registration Statement.
The table below sets forth each Selling Stockholder's name, the number
of shares of Common Stock beneficially owned by such Selling Stockholder prior
to the Offering, the maximum number of shares of Common Stock offered hereby by
such Selling Stockholder and the number of shares of Common Stock to be held by
such Selling Stockholder after the Offering.
<TABLE>
<CAPTION>
Maximum Number Number of
of Shares to be Shares Owned Number of Shares
Sold in the Prior to the Owned After the
Name(1) Offering(2) Offering Offering(3)
- ------------------- --------------- ------------ ----------------
<S> <C> <C> <C>
Robert J. Murphy 122,934 -- --
Terrence P. Abbott 15,707 -- --
Charles H. Hamlin 442 -- --
A.D. Davis ESOP 47,294 -- --
A.D. Davis ESOP
Participants:
Terrence P. Abbott 7,514 -- --
Susannah L. Adams 684 -- --
Margaret R. Baxter 730 -- --
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
Maximum Number Number of
of Shares to be Shares Owned Number of Shares
Sold in the Prior to the Owned After the
Name(1) Offering(2) Offering Offering(3)
- ------------------- --------------- ------------ ----------------
<S> <C> <C> <C>
Ellen W. Belcastro 485 -- --
Gayle L. Bianchino 1,009 -- --
Peter J. Bowen 761 -- --
John R. Brancato 1,017 -- --
Louise Burbank 348 -- --
Carla S. Butters 1,067 -- --
Charlotte L. Coombe 523 -- --
Jennifer Couture 722 -- --
Sandra M. Croteau 1,573 -- --
Corinne D. Doyle 752 -- --
Rachel A. Fall 679 -- --
Lisa A. Fecteau 86 -- --
Helen Warren Goss 1,655 -- --
Marie A. Gray 342 -- --
Charles H. Hamlin 2,855 -- --
Cathy Howland 808 -- --
Mary Jane Jordan 893 -- --
Lori B. Mann 96 -- --
Ann Marie Marquis 198 -- --
Cynthia L. Martin 1,542 -- --
Donald A. McAllister 1,069 -- --
Heidi A. McAllister 1,069 -- --
Susan McKenney 598 -- --
Ann Marie McPate 167 -- --
Annie Laurie Miller 546 -- --
Jonathan A. Moren 461 -- --
Peter A. Pelletier 2,357 -- --
Eric B. Pelton 2,879 -- --
Christine Perk 174 -- --
Mikell Perry 356 -- --
Ann M. Phair 95 -- --
Brenda Kay Puglisi 154 -- --
Cheryl A. Reid 87 -- --
Jennifer Rogers 144 -- --
Lauri Roode 743 -- --
Karen E. Roy 727 -- --
Alexander Ruch 871 -- --
Christine A. Skehan 103 -- --
Sheila Smith 878 -- --
</TABLE>
14
<PAGE> 16
<TABLE>
<CAPTION>
Maximum Number Number of
of Shares to be Shares Owned Number of Shares
Sold in the Prior to the Owned After the
Name(1) Offering(2) Offering Offering(3)
- ------------------- --------------- ------------ ----------------
<S> <C> <C> <C>
Elaine South 111 -- --
Roger N. Tatro 2,670 -- --
Helen L. Towle 1,428 -- --
Stacie Verrill 95 -- --
Sylvia B. Weiss 1,531 -- --
Bonnie Wible 804 -- --
Rhea F. York 838 -- --
</TABLE>
(1) Selling Stockholders include the approximately 50 participants in the A.D.
Davis, Incorporated Employee Stock Ownership Plan ("ESOP"), which will be
terminated promptly following the Company's acquisition of A.D. Davis.
(2) Represents the number of shares of Common Stock received by each Selling
Stockholder upon consummation of the acquisition of A.D. Davis by the Company
and, in the case of ESOP participants, upon termination of the ESOP.
(3) Because the Selling Stockholders may sell all, some or none of the shares
of Offered Stock offered hereby, there can be no assurance as to the number of
shares of Offered Stock which will be held by each Selling Stockholder upon
completion of the Offering. Even if no shares of Offered Stock are sold,
however, no Selling Stockholder would hold one percent or more of the
outstanding Common Stock upon completion of the Offering (based on the total
number of shares of Common Stock held by the Selling Stockholders as of the date
hereof and to be received upon consummation of the acquisition of A.D. Davis by
the Company).
The Selling Stockholders may sell up to all of the shares of the Common
Stock shown above under the heading "Number of Shares Owned Prior to the
Offering" pursuant to this Prospectus in one or more transactions from time to
time as described below under "Plan of Distribution."
PLAN OF DISTRIBUTION
Each of the Selling Stockholders may sell his, her or its shares of
Offered Stock directly or through broker-dealers who may act solely as agents,
or who may acquire shares as principals. The distribution of the shares of
Offered Stock may be effected in one or more transactions that may take place on
the Nasdaq Stock Market, including block trades or ordinary broker's
transactions, or through privately-negotiated transactions, or in accordance
with Rule 144 under the Securities Act (or any other applicable exemption from
registration under the Securities Act), through a combination of any such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Usual and
customary or negotiated
15
<PAGE> 17
brokerage fees or commissions may be paid by the Selling Stockholders in
connection with such sales. Sales of the Offered Stock may be effected to cover
previous short sales of Common Stock.
The Selling Stockholders may effect transactions by selling the Offered
Stock directly or through broker-dealers acting either as principal or as agent,
and such broker-dealers may receive compensation in the form of usual and
customary or negotiated discounts, concessions or commissions from the Selling
Stockholders.
The aggregate proceeds to the Selling Stockholders from the sale of the
Offered Stock will be the purchase price of the Offered Stock sold less the
aggregate agents' commissions, if any, and other expenses of issuance and
distribution not borne by the Company. The Selling Stockholders and any dealers
or agents that participate in the distribution of the Offered Stock may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the sale of the Offered Stock by them and any commissions received by
any such dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.
Each Selling Stockholder and any other person participating in a
distribution of the Offered Stock will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including without
limitation Regulation M and Rules 101 through 105 thereunder. Regulation M
governs the activities of persons participating in a distribution of securities
and, consequently, may restrict certain activities of, and limit the timing of
purchases and sales of Offered Stock by, Selling Stockholders and other persons
participating in a distribution of Offered Stock. Furthermore, under Regulation
M, persons engaged in a distribution of securities are prohibited from
simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distribution, subject to exceptions or exemptions. All of
the foregoing may affect the marketability of the securities offered hereby.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by the law firm of Elias, Matz, Tiernan & Herrick
L.L.P., Washington, D.C.
EXPERTS
The financial statements and related financial statement schedules of
the Company incorporated in this Prospectus by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 and the
Company's Current Report on Form 8-K filed on July 23, 1998, and the financial
statements and related financial statement schedules of The Safety Fund
Corporation and of Community Bankshares, Inc. incorporated in this Prospectus by
reference from the Company's Current Report on Form 8-K, filed on April 22,
1998, have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given upon its authority as experts in accounting and auditing.
16
<PAGE> 18
The financial statements and related financial statement schedules of
CFX Corporation incorporated in this Prospectus by reference from the Company's
Current Report on Form 8-K, filed on April 22, 1998, have been audited by Wolf &
Company, P.C., independent certified public accountants, as stated in their
report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon its authority as experts in
accounting and auditing.
The financial statements and related financial statement schedules of
Portsmouth Bank Shares, Inc. incorporated in this Prospectus by reference from
the Company's Current Report on Form 8-K, filed on April 22, 1998, have been
audited by Shatswell, MacLeod & Company, P.C., independent certified public
accountants, as stated in their report, which is incorporated herein by
reference, and has been so incorporated in reliance upon the report of such firm
given upon its authority as experts in accounting and auditing.
17
<PAGE> 19
================================================================================
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus, and,
if given or made, such information and representation must not be relied upon as
having been authorized by the Company or any other person. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state to any person to whom it is unlawful to
make such offer in such state. Neither the delivery of this Prospectus nor any
sales made hereunder shall, under any circumstances, create any implication that
the information contained herein is correct as of any time subsequent to the
date hereof.
TABLE OF CONTENTS
Page
Where You Can Find More Information..................................... 2
Risk Factors............................................................ 4
The Company............................................................. 9
Selected Consolidated Financial Data.................................... 10
Common Stock and Dividend Information................................... 12
Use of Proceeds........................................................ 13
Selling Stockholders .................................................. 13
Plan of Distribution................................................... 15
Legal Matters.......................................................... 16
Experts................................................................ 16
186,377 Shares
PEOPLES HERITAGE
FINANCIAL GROUP, INC.
Common Stock
------------
Prospectus
------------
================================================================================
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) List of Exhibits:
Exhibit No. Exhibit Location
- ----------- ------- --------
3(a)(1) Amended and Restated Articles of Incorporation
of the Company (1)
3(a)(2) Amendment to the Amended and Restated Articles of
Incorporation of the Company (2)
3(b) Bylaws of the Company (3)
4(a) Specimen Common Stock certificate (3)
5 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. *
regarding legality of securities being registered
23(a) Consent of Elias, Matz, Tiernan & Herrick L.L.P. *
(contained in the opinion included as Exhibit 5)
23(b) Consents of KPMG Peat Marwick LLP *
23(c) Consent of Wolf & Company, P.C. *
23(d) Consent of Shatswell, MacLeod & Company, P.C. *
24 Powers of Attorney (included in the signature page to
the initial filing of this Registration Statement) --
- ----------
* Previously filed.
(1) Exhibit is incorporated by reference to the Form 8-K report filed by
the Company with the Securities and Exchange Commission on November 3, 1997.
(2) Exhibit is incorporated by reference to the proxy statement filed by
the Company with the Commission on March 23, 1998.
(3) Exhibit is incorporated by reference to the Form S-4 Registration
Statement (No. 33-20243) filed by the Company with the Securities and Exchange
Commission on February 22, 1988.
(b) Financial Statement Schedules.
No financial statement schedules are filed because the required
information is not applicable or is included in the consolidated financial
statements or related notes.
II-1
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Portland,
State of Maine on the 10th day of December 1998.
PEOPLES HERITAGE FINANCIAL GROUP, INC.
By: /s/ William J. Ryan
-----------------------------------------------
William J. Ryan
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Robert P. Bahre* Date: December 10, 1998
- --------------------------------------
Robert P. Bahre
Director
/s/ Peter J. Baxter* Date: December 10, 1998
- ---------------------------------------
Peter J. Baxter
Vice Chairman, Executive Vice President
and Chief Operating Officer
/s/ P. Kevin Condron* Date: December 10, 1998
- --------------------------------------
P. Kevin Condron
Director
II-2
<PAGE> 22
/s/ Everett W. Gray* Date: December 10, 1998
- ----------------------------------
Everett W. Gray
Director
/s/ Andrew W. Greene* Date: December 10, 1998
- ----------------------------------
Andrew W. Greene
Director
/s/ Katherine M. Greenleaf* Date: December 10, 1998
- ----------------------------------
Katherine M. Greenleaf
Director
/s/ Douglas S. Hatfield* Date: December 10, 1998
- ----------------------------------
Douglas S. Hatfield
Director
/s/ Dana S. Levenson* Date: December 10, 1998
- ----------------------------------
Dana S. Levenson
Director
/s/ Robert A. Marden, Sr.* Date: December 10, 1998
- ----------------------------------
Robert A. Marden, Sr.
Vice Chairman
II-3
<PAGE> 23
/s/ Philip A. Mason* Date: December 10, 1998
- ------------------------------------
Philip A. Mason
Director
/s/ Malcolm W. Philbrook, Jr.* Date: December 10, 1998
- ------------------------------------
Malcolm W. Philbrook, Jr.
Director
/s/ Pamela P. Plumb* Date: December 10, 1998
- ------------------------------------
Pamela P. Plumb
Vice Chairman
/s/ Seth Resnicoff* Date: December 10, 1998
- ------------------------------------
Seth Resnicoff
Director
/s/ William J. Ryan Date: December 10, 1998
- ------------------------------------
William J. Ryan
Chairman, President and Chief
Executive Officer
(principal executive officer)
/s/ Curtis M. Scribner* Date: December 10, 1998
- ------------------------------------
Curtis M. Scribner
Director
/s/ Paul R. Shea* Date: December 10, 1998
- ------------------------------------
Paul R. Shea
Director
II-4
<PAGE> 24
/s/ John E. Veasey* Date: December 10, 1998
- ----------------------------------------------
John E. Veasey
Director
/s/ Peter J. Verrill Date: December 10, 1998
- ----------------------------------------------
Peter J. Verrill
Executive Vice President, Chief
Financial Officer and Treasurer
(principal financial and accounting officer)
- ---------------
* By Peter J. Verrill, Attorney-in-fact.
II-5
