SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
September 28, 1999
SKY FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Ohio 1-14473 34-1372535
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
221 South Church Street
Bowling Green, Ohio 43402
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 327-6300
N/A
(Former name or former address, if changed since last report)
<PAGE 2>
Item 7. Financial Statements and Exhibits
As previously reported in its Current Report on Form 8-K filed August 31,
1999, Sky Financial Group, Inc. (the Company) hereby files by way of
amendment the financial statements and pro forma financial information
required pursuant to this Item 7 of Form 8-K with respect to the merger (the
Merger) of First Western Bancorp, Inc. (First Western) with and into the
Company on August 6, 1999:
(a) The Company hereby incorporates by reference from First Western's
Annual Report on Form 10-K for the year ended December 31, 1998 the
Consolidated Balance Sheets of First Western as of December 31, 1998 and 1997
and First Western's Consolidated Statements of Income, Changes in
Shareholders' Equity and Cash Flows for each of the three years in the period
ended December 31, 1998.
The following financial information of First Western is submitted herewith
and is attached as Exhibit 99.1 to this Current Report on Form 8-K/A.
(i) Condensed Consolidated Balance Sheet as of June 30, 1999.
(ii) Condensed Consolidated Statements of Income for the
Six Months Ended June 30, 1999 and 1998.
(iii) Condensed Consolidated Statements of Comprehensive Income
for the Six Months Ended June 30, 1999 and 1998.
(iv) Condensed Consolidated Statement of Changes in Shareholders'
Equity for the Six Months Ended June 30, 1999.
(v) Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1999 and 1998.
(b) The following pro forma financial information giving effect to the
Merger is submitted herewith and is attached as Exhibit 99.2 to this Current
Report on Form 8-K/A.
(i) Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1999.
(ii) Pro Forma Condensed Consolidated Statements of Income for the
Six Months Ended June 30, 1999 and 1998.
(iii) Pro Forma Condensed Consolidated Statements of Income for the
Years Ended December 31, 1998, 1997 and 1996.
<PAGE 3>
(c) Exhibits
Exhibit No. Exhibit
(2) Agreement and Plan of Merger by and between Sky Financial
Group, Inc. and First Western Bancorp, Inc. is hereby
incorporated by reference from the Company's Registration
Statement on Form S-4 (File No. 333-78997).
(23) Consent of Independent Auditors Deloitte & Touche LLP
(99.1) First Western Bancorp, Inc. Financial Information
(99.2) Pro Forma Financial Information
SIGNATURE
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 hereunto duly authorized.
SKY FINANCIAL GROUP, INC.
By: /s/ Kevin T. Thompson
Name: Kevin T. Thompson
Title: Executive Vice President and
Chief Financial Officer
Date: September 28, 1999
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Sky Financial Group, Inc. on Form 8-K/A of our report on First Western
Bancorp, Inc.'s consolidated financial statements dated January 25, 1999,
appearing in the Annual Report on Form 10-K of First Western Bancorp, Inc.
for the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
September 28, 1999
EXHIBIT 99.1
First Western Bancorp, Inc.
Condensed Consolidated Balance Sheet
(Dollars in thousands)
June 30, 1999
ASSETS
Cash and due from banks $ 47,818
Federal funds sold and
interest-earnings deposits 2,719
Securities available for sale 701,260
Loans held for sale 3,585
Loans, net of unearned income of $35,658 1,142,037
Less: Allowance for credit losses 18,469
Net loans 1,123,568
Premises and equipment 21,683
Bank owned life insurance 27,131
Intangible assets 43,326
Other assets 24,829
TOTAL ASSETS $ 1,995,919
LIABILITIES
Deposits:
Noninterest-bearing demand $ 167,055
Interest-bearing demand 52,720
Savings 415,331
Time deposits 695,187
Total deposits 1,330,293
Federal funds purchased and
repurchase agreements 227,913
Debt and Federal Home Loan Bank Advances 262,024
Other liabilities 29,807
TOTAL LIABILITIES 1,850,037
SHAREHOLDERS' EQUITY
Preferred stock, no stated value, none issued ---
Common stock $5.00 par value
20,000,000 shares authorized
11,898,989 shares issued and
11,179,430 shares outstanding 59,495
Surplus 4,868
Retained earnings 102,342
Accumulated other comprehensive income (6,073)
Treasury stock, 685,273 shares at cost (14,150)
Unallocated common stock held by ESOP (600)
TOTAL SHAREHOLDERS' EQUITY 145,882
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,995,919
EXHIBIT 99.1
First Western Bancorp, Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
For the Six Months Ended
June 30, 1999 June 30, 1998
Interest Income
Interest and fees on loans $ 45,226 $ 44,205
Interest on deposits with other banks 39 49
Interest on securities available for sale 24,451 13,526
Interest and dividends on securities
Taxable --- 4,182
Tax-exempt --- 1,984
Interest on federal funds sold 194 14
Total interest income 69,910 63,960
Interest Expense
Interest on deposits 23,846 23,059
Interest on borrowed funds 13,560 12,813
Total interest expense 37,406 35,872
Net Interest Income 32,504 28,088
Provision For Credit Losses 2,250 2,000
Net Interest Income After Provision
for Credit Losses 30,254 26,088
Other Income
Trust fees 1,549 1,520
Service charges on deposit accounts 3,150 2,222
Net securities gains 222 58
Net gains on loan sales 283 1,774
Other operating income 3,148 3,614
Total other income 8,352 9,188
Other Expenses
Salaries and wages 8,175 8,191
Employee benefits 2,791 2,476
Net occupancy expense 1,834 1,664
Equipment rental, depreciation
and maintenance 1,354 1,337
Amortization of intangible assets 2,242 542
Marketing 583 1,021
Other operating expenses 6,290 6,610
Total other expenses 23,269 21,841
Income Before Income Taxes 15,337 13,435
Income Taxes 4,415 3,788
Net Income $ 10,922 $ 9,647
Basic earnings per share $ 0.98 $ 0.86
Diluted earnings per share $ 0.96 $ 0.85
EXHIBIT 99.1
First Western Bancorp, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Dollars in thousands)
For the Six Months Ended
June 30, 1999 June 30, 1998
Net income $ 10,922 $ 9,647
Other comprehensive income, net of tax:
Unrealized holding (losses) gains
arising during period (11,364) 543
Less: reclassification adjustment for
gains included in net income (144) (38)
Other comprehensive (loss) income (11,508) 505
Comprehensive (loss) income $ (586) $ 10,152
First Western Bancorp, Inc.
Condensed Consolidated Statement of Changes in Shareholders' Equity
(Dollars in thousands)
For the Six Months Ended
June 30, 1999
Balance as of December 31, 1998 $ 149,021
Net income 10,922
Cash dividends paid (3,347)
Common stock issued 732
Net change in accumulated other
comprehensive income (11,508)
Other items 62
Balance as of June 30, 1999 $ 145,882
EXHIBIT 99.1
First Western Bancorp, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
For the Six Months Ended
June 30, 1999 June 30, 1998
Cash Flows From Operating Activities:
Net income $ 10,922 $ 9,647
Adjustments to reconcile net income to
net cash provided by operating activities 30,137 127,896
Net cash provided by operating activities 41,059 137,543
Cash Flows From Investing Activities:
Proceeds from sales of securities
available for sale 118,466 5,127
Proceeds from maturity or paydown of
securities available for sale 181,111 110,419
Purchase of securities available for sale (143,522) (446,323)
Proceeds from maturity or paydown of
investment securities --- 40,207
Purchase of investment securities --- (20,901)
Net increase in loans (50,898) (53,269)
Decrease in deposits with other banks 241 5,236
Purchase of premises and equipment (404) (2,646)
Proceeds from sale of premises and equipment 181 94
Proceeds from sale of other real estate owned 436 576
Cash paid for branch office sales (95,917) (40,884)
Cash received for branch office purchases 4,765 258,830
Net cash provided by (used in)
investing activities 14,459 (143,534)
Cash Flows From Financing Activities:
Net decrease in deposits (31,424) (4,258)
Net decrease in federal funds purchased and
other short-term borrowings (30,250) (2,876)
Net (decrease) increase in repurchase
agreements and secured lines of credit (19,407) 7,458
Net increase in advances from the Federal
Home Loan Bank 30,000 7,400
Proceeds from issuance of long-term debt --- 23,000
Payments on long-term debt --- (3,508)
Proceeds from exercise of stock options 226 41
Proceeds from common stock issued 506 1,115
Treasury stock issued --- 42
Dividends paid on common stock (3,347) (3,353)
Net cash (used in) provided by
financing activities (53,696) 25,061
Net increase in cash and due from banks 1,822 19,070
Cash and due from banks - beginning of year 45,997 40,973
Cash and due from banks - end of period $ 47,819 $ 60,043
EXHIBIT 99.1
First Western Bancorp, Inc.
Condensed Consolidated Statements of Cash Flows (continued)
(Dollars in thousands)
For the Six Months Ended
June 30, 1999 June 30, 1998
Supplemental Disclosure of Cash Flow
Information
Cash paid during the period for:
Interest $ 39,797 $ 35,171
Income taxes 3,522 3,262
Supplemental Disclosure of Noncash
Investing Activities
Deposits assumed in branch acquisition $ 8,101 $ 383,842
Loans acquired in branch acquisition --- 73,677
Deposits sold in branch disposition 135,486 46,702
Securities purchased settling after June 30 7,900 1,006
Transfers to other real estate owned 497 1,043
Net change in unrealized (depreciation)
appreciation in securities available for
sale, net of income tax effects (11,508) 505
EXHIBIT 99.2
Sky Financial Group, Inc.
Wood Bancorp, Inc.
First Western Bancorp, Inc.
Pro Forma Condensed Consolidated Balance Sheet
June 30, 1999
(Dollars in thousands)
Sky Wood First Pro Forma Pro Forma
Financial Bancorp Western Adjustment Combined
ASSETS
Cash and due
from banks $ 156,127 $ 1,454 $ 47,818 $ 205,399
Federal funds
sold and
interest-
earnings
deposits 22,743 4,582 2,719 30,044
Securities 974,419 18,769 701,260 1,694,448
Loans, net 3,389,716 135,783 1,127,153 4,652,652
Premises and
equipment 87,764 2,582 21,683 112,029
Other assets 154,923 1,985 95,286 252,194
TOTAL ASSETS $4,785,692 $165,155 $1,995,919 $6,946,766
LIABILITIES
Deposits $3,718,280 $130,921 $1,330,293 $5,179,494
Federal funds
purchased and
repurchase
agreements 246,338 227,913 474,251
Debt and Federal
Home Loan
Advances 406,323 7,596 263,127 677,046
Other liabilities 63,589 1,422 28,704 93,715
TOTAL LIABILITIES 4,434,530 139,939 1,850,037 6,424,506
SHAREHOLDERS'
EQUITY 351,162 25,216 145,882 522,260
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $4,785,692 $165,155 $1,995,919 $6,946,766
EXHIBIT 99.2
Sky Financial Group, Inc.
Wood Bancorp, Inc.
First Western Bancorp, Inc.
Pro Forma Condensed Consolidated Statements of Income
Six Months Ended June 30, 1999
(Dollars in thousands)
Sky Wood First Pro Forma Pro Forma
Financial Bancorp Western Adjustment Combined
Interest Income
Loans, including
fees $146,863 $ 5,871 $ 45,226 $ 197,960
Securities and
other 28,884 717 24,684 54,285
Total interest
income 175,747 6,588 69,910 252,245
Interest Expense
Deposits 66,505 2,681 23,846 93,032
Borrowings (1) 15,298 269 12,309 $ 1,251 29,127
Total interest
expense 81,803 2,950 36,155 1,251 122,159
Net Interest Income 93,944 3,638 33,755 (1,251) 130,086
Provision For
Credit Losses 5,082 60 2,250 7,392
Net Interest Income
After Provision
for Credit Losses 88,862 3,578 31,505 (1,251) 122,694
Other Income 50,672 578 8,352 59,602
Other Expenses (1) 80,372 2,070 24,520 (1,251) 105,711
Income Before
Income Taxes 59,162 2,086 15,337 76,585
Income Taxes 18,653 785 4,415 23,853
Net Income $ 40,509 $ 1,301 $ 10,922 $ -- $ 52,732
Earnings Per
Common Share
Basic $ 0.90 $ 0.46 $ 0.98 $ 0.87
Diluted $ 0.89 $ 0.46 $ 0.96 $ 0.86
Weighted Average
Shares Outstanding
Basic 45,070 2,827 11,162 60,655
Diluted 45,541 2,843 11,402 61,429
(1) Reclassification of interest expense on First Western's trust preferred
securities from other expenses to conform classification with that of Sky
Financial Group.
Non-recurring merger related charges to effect the First Western Bancorp, Inc.
and Wood Bancorp, Inc. mergers are expected to total $35.1 million after-tax
and will be recorded in the third quarter of 1999.
EXHIBIT 99.2
Sky Financial Group, Inc.
Wood Bancorp, Inc.
First Western Bancorp, Inc.
Pro Forma Condensed Consolidated Statements of Income
Six Months Ended June 30, 1998
(Dollars in thousands)
Sky Wood First Pro Forma Pro Forma
Financial Bancorp Western Adjustment Combined
Interest Income
Loans, including
fees $145,903 $ 5,977 $ 44,205 $ 196,085
Securities and
other 34,316 802 19,755 54,873
Total interest
income 180,219 6,779 63,960 250,958
Interest Expense
Deposits 73,145 2,720 23,059 98,924
Borrowings (1) 14,358 597 11,599 $ 1,214 27,768
Total interest
expense 87,503 3,317 34,658 1,214 126,692
Net Interest Income 92,716 3,462 29,302 (1,214) 124,266
Provision For
Credit Losses 6,387 60 2,000 8,447
Net Interest Income
After Provision
for Credit Losses 86,329 3,402 27,302 (1,214) 115,819
Other Income 48,265 473 9,188 57,926
Other Expenses (1) 93,265 1,989 23,055 (1,214) 117,095
Income Before
Income Taxes 41,329 1,886 13,435 56,650
Income Taxes 12,708 696 3,788 17,192
Net Income $ 28,621 $ 1,190 $ 9,647 $ -- $ 39,458
Earnings Per
Common Share
Basic $ 0.63 $ 0.46 $ 0.86 $ 0.65
Diluted $ 0.62 $ 0.43 $ 0.85 $ 0.64
Weighted Average
Shares Outstanding
Basic 45,209 2,583 11,163 60,616
Diluted 45,802 2,745 11,391 61,604
(1) Reclassification of interest expense on First Western's trust preferred
securities from other expenses to conform classification with that of Sky
Financial Group.
EXHIBIT 99.2
Sky Financial Group, Inc.
Wood Bancorp, Inc.
First Western Bancorp, Inc.
Pro Forma Condensed Consolidated Statements of Income
Year Ended December 31, 1998
(Dollars in thousands)
Sky Wood First Pro Forma Pro Forma
Financial Bancorp Western Adjustment Combined
Interest Income
Loans, including
fees $296,682 $12,001 $ 90,546 $ 399,229
Securities and
other 66,998 1,547 49,187 117,732
Total interest
income 363,680 13,548 139,733 516,961
Interest Expense
Deposits 146,385 5,513 52,745 204,643
Borrowings (1) 30,171 995 24,888 $ 2,473 58,527
Total interest
expense 176,556 6,508 77,633 2,473 263,170
Net Interest Income 187,124 7,040 62,100 (2,473) 253,791
Provision For
Credit Losses 24,968 120 4,000 29,088
Net Interest Income
After Provision
for Credit Losses 162,156 6,920 58,100 (2,473) 224,703
Other Income 97,214 1,136 17,241 115,591
Other Expenses (1) 232,708 4,268 50,646 (2,473) 285,149
Income Before
Income Taxes 26,662 3,788 24,695 55,145
Income Taxes 8,854 1,419 6,772 17,045
Net Income $ 17,808 $ 2,369 $ 17,923 $ -- $ 38,100
Earnings Per
Common Share
Basic $ 0.39 $ 0.91 $ 1.61 $ 0.63
Diluted $ 0.39 $ 0.86 $ 1.58 $ 0.62
Weighted Average
Shares Outstanding
Basic 45,124 2,602 11,150 60,530
Diluted 45,686 2,757 11,369 61,471
(1) Reclassification of interest expense on First Western's trust preferred
securities from other expenses to conform classification with that of Sky
Financial Group.
EXHIBIT 99.2
Sky Financial Group, Inc.
Wood Bancorp, Inc.
First Western Bancorp, Inc.
Pro Forma Condensed Consolidated Statements of Income
Year Ended December 31, 1997
(Dollars in thousands)
Sky Wood First Pro Forma Pro Forma
Financial Bancorp Western Adjustment Combined
Interest Income
Loans, including
fees $281,902 $10,804 $ 89,831 $ 382,537
Securities and
other 65,629 1,831 37,492 104,952
Total interest
income 347,531 12,635 127,323 487,489
Interest Expense
Deposits 142,216 4,958 47,464 194,638
Borrowings (1) 24,701 1,149 20,155 $ 2,252 48,257
Total interest
expense 166,917 6,107 67,619 2,252 242,895
Net Interest Income 180,614 6,528 59,704 (2,252) 244,594
Provision For
Credit Losses 10,928 120 4,836 15,884
Net Interest Income
After Provision
for Credit Losses 169,686 6,408 54,868 (2,252) 228,710
Other Income 82,167 585 17,231 99,983
Other Expenses (1) 164,783 4,371 42,995 (2,252) 209,897
Income Before
Income Taxes 87,070 2,622 29,104 118,796
Income Taxes 27,750 947 8,822 37,519
Net Income $ 59,320 $ 1,675 $ 20,282 $ -- $ 81,277
Net Income Available
to Common
Shareholders $ 58,715 $ 1,675 $ 20,282 $ -- $ 80,672
Earnings Per
Common Share
Basic $ 1.29 $ 0.62 $ 1.80 $ 1.32
Diluted $ 1.27 $ 0.59 $ 1.77 $ 1.30
Weighted Average
Shares Outstanding
Basic 45,402 2,681 11,242 60,977
Diluted 46,699 2,817 11,446 62,621
(1) Reclassification of interest expense on First Western's trust preferred
securities from other expenses to conform classification with that of Sky
Financial Group.
EXHIBIT 99.2
Sky Financial Group, Inc.
Wood Bancorp, Inc.
First Western Bancorp, Inc.
Pro Forma Condensed Consolidated Statements of Income
Year Ended December 31, 1996
(Dollars in thousands)
Sky Wood First Pro Forma Pro Forma
Financial Bancorp Western Adjustment Combined
Interest Income
Loans, including
fees $257,355 $ 9,471 $ 92,321 $ 359,147
Securities and
other 65,695 1,614 33,162 100,471
Total interest
income 323,050 11,085 125,483 459,618
Interest Expense
Deposits 137,288 4,875 46,111 188,274
Borrowings (1) 13,648 414 21,103 35,165
Total interest
expense 150,936 5,289 67,214 223,439
Net Interest Income 172,114 5,796 58,269 236,179
Provision For
Credit Losses 7,713 120 8,288 16,121
Net Interest Income
After Provision
for Credit Losses 164,401 5,676 49,981 220,058
Other Income 62,244 460 15,714 78,418
Other Expenses (1) 149,131 3,474 42,264 194,869
Income Before
Income Taxes 77,514 2,662 23,431 103,607
Income Taxes 24,364 994 6,304 31,662
Net Income $ 53,150 $ 1,668 $ 17,127 $ -- $ 71,945
Net Income Available
to Common
Shareholders $ 50,743 $ 1,668 $ 17,127 $ -- $ 69,538
Earnings Per
Common Share
Basic $ 1.14 $ 0.60 $ 1.49 $ 1.15
Diluted $ 1.11 $ 0.57 $ 1.47 $ 1.12
Weighted Average
Shares Outstanding
Basic 44,510 2,789 11,510 60,489
Diluted 47,812 2,902 11,669 64,066
