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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): August 16, 1999
JSB FINANCIAL, INC.
(Exact name of registrant as specified in charter)
DELAWARE 001-13157 11-3000874
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
303 MERRICK ROAD, LYNBROOK, NEW YORK 11563
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (516) 887-7000
NOT APPLICABLE
(Former name or former address, if changed since last report)
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<PAGE>
ITEMS 1 THROUGH 4. NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
On August 16, 1999, JSB Financial, Inc., a Delaware corporation
("JSB"), announced that it had entered into an Agreement and Plan of Merger,
dated as of August 16, 1999 ("Merger Agreement"), with North Fork
Bancorporation, Inc., a Delaware corporation ("NFB"). NFB is the bank holding
company parent of North Fork Bank and Trust Company, a New York State chartered
stock commercial bank. The Merger Agreement provides, among other things, that
JSB will merge with and into NFB, with NFB being the surviving corporation
("Merger"). A copy of the Merger Agreement is attached hereto as Exhibit 2.1.
Capitalized terms which are used but not defined herein shall have the meanings
ascribed to such terms in the Merger Agreement.
Pursuant to the Merger Agreement, each share of JSB common stock, par
value $0.01 per share ("JSB Common Stock"), issued and outstanding immediately
prior to the Effective Time will be converted into and become the right to
receive 3.0 shares of NFB common stock, par value $2.50 per share ("NFB Common
Stock"), except for (i) shares of JSB Common Stock held directly or indirectly
by NFB, other than shares held in a fiduciary capacity in satisfaction of a debt
previously contracted, and (ii) shares held by JSB as treasury stock. Each
holder of JSB Common Stock who would otherwise be entitled to receive a fraction
of a share of NFB Common Stock will receive an amount in cash equal to the
product arrived at by multiplying such fraction of a share of NFB Common Stock
by the NFB Market Value.
The Merger will be structured as a tax-free reorganization and it is
expected that it will be accounted for as a pooling-of-interests; the Merger
Agreement, however, is not conditioned upon such accounting treatment.
Consummation of the Merger is subject to the satisfaction of certain customary
conditions, including approval of the Merger Agreement by the stockholders of
both JSB and NFB and approval of the appropriate regulatory agencies.
JSB has the right to terminate the Merger Agreement if (i) the NFB
Market Value on the Valuation Date falls below $16.35 per share and (ii) such
decline in value is 10% greater than the percentage decline of the shares of
stock of a group of similar financial institutions over the same period, unless
NFB elects to increase the Merger Consideration to be received by JSB's
stockholders as set forth in the Merger Agreement.
The Merger Agreement also provides that options to purchase shares of
JSB Common Stock under JSB's stock option plans that are outstanding at the
Effective Time shall be converted into options to purchase shares of NFB Common
Stock in accordance with the procedure set forth in the Merger Agreement. In
connection with the Merger Agreement, JSB granted to NFB a stock option pursuant
to a Stock Option Agreement, dated as of August 16, 1999, which, under certain
defined circumstances, would enable NFB to purchase up to 19.9% of JSB's issued
and outstanding shares of common stock. The Stock Option Agreement provides that
the total profit receivable thereunder may not exceed $30 million plus
reasonable out-of-pocket expenses. A copy of the Stock Option Agreement is
attached hereto as Exhibit 4.1.
JSB and NFB publicly announced the Merger in a press release dated
August 16, 1999, a copy of which is attached hereto as Exhibit 99.1.
-2-
<PAGE>
The press release and analyst presentation incorporated by reference
herein may contain certain forward-looking statements with respect to the
financial condition, results of operations and business of NFB following the
consummation of the Merger, including statements relating to (a) the expected
cost savings and revenue enhancements to be realized from the Merger and (b)
projected 2000 pro forma earnings per share. Factors that may cause actual
results to differ materially from those contemplated by such forward-looking
statements include, among others, the following possibilities: (1) expected cost
savings or revenue enhancements from the Merger cannot be fully realized; (2)
deposit attrition, customer loss or revenue loss following the Merger is greater
than expected; (3) competitive pressure in the banking and financial services
industry increases significantly; (4) changes in the interest rate environment
reduce margins; (5) general economic conditions, either nationally or in the
State of New York, are less favorable than expected; (6) changes in real estate
values; (7) changes in accounting principles; (8) changes in legislation; (9)
changes in other economic, governmental, regulatory and technological factors
affecting each company's operations, pricing, products and services; and (10)
the impact of the Year 2000
ITEM 6. NOT APPLICABLE.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
a. Financial Statements of Businesses Acquired.
Not Applicable
b. Pro forma Financial Information.
Not Applicable
c. Exhibits: The following Exhibits are filed as part of
this report:
EXHIBIT NO. DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of August
16, 1999, by and between North Fork
Bancorporation, Inc. and JSB Financial, Inc.*
4.1 Stock Option Agreement, dated August 16, 1999,
by and between North Fork Bancorporation, Inc.
and JSB Financial, Inc.*
99.1 Press Release issued August 16, 1999.
99.2 Analyst Presentation.
* to be filed by amendment.
ITEM 8. NOT APPLICABLE.
ITEM 9. NOT APPLICABLE.
-3-
<PAGE>
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 hereunto duly authorized.
JSB FINANCIAL INC.
By: /s/ Thomas R. Lehmann
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Thomas R. Lehmann
Executive Vice President and
Chief Financial Officer
Date: August 17, 1999
-4-
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of August 16,
1999, by and between North Fork Bancorporation, Inc.
and JSB Financial, Inc.*
4.1 Stock Option Agreement, dated as of August 16, 1999, by
and between North Fork Bancorporation, Inc. and JSB
Financial, Inc.*
99.1 Press Release issued August 16, 1999.
99.2 Analyst Presentation.
- ------------------
* to be filed by amendment.
-5-
Exhibit 99.1
NORTH FORK BANCORP
275 BROAD HOLLOW RD.
MELVILLE, NY 11747
(516) 844-1004 FAX (516) 694-1536
PRESS RELEASE
FOR IMMEDIATE RELEASE
NORTH FORK BANCORPORATION, INC. TO ACQUIRE
JSB FINANCIAL, INC. IN A COMMON STOCK TRANSACTION
VALUED AT APPROXIMATELY $570 MILLION
MELVILLE, N.Y. - AUGUST 16, 1999 - NORTH FORK BANCORPORATION, INC.,
(NYSE:NFB) AND JSB FINANCIAL, INC. (NYSE:JSB) jointly announced today that they
have signed a definitive merger agreement whereby North Fork Bancorporation,
Inc. ("North Fork") would acquire JSB Financial, Inc. ("JSB") in a
stock-for-stock merger valued at approximately $570 million. JSB is the holding
company for Jamaica Savings Bank FSB, a savings institution with branch
locations in the New York Metropolitan area. Under terms of the agreement, each
share of JSB will be converted into North Fork common stock at a fixed exchange
ratio of three shares of North Fork for each share of JSB. Approximately 27.9
million shares of North Fork will be issued in connection with the merger. It is
expected that it will be accounted for as a pooling-of-interests transaction for
financial reporting purposes and will be a tax-free reorganization. The merger
agreement, however, is not conditioned upon such accounting treatment. The
exchange ratio was based upon the price of North Fork's stock utilizing its
closing price on August 13, 1999 of $20.44 for a total value to JSB shareholders
of $61.31. The closing price of JSB common stock on that date was $58.75. The
merger is expected to close in the first quarter of 2000 following receipt of
all regulatory approvals and approval by the shareholders of both companies. Due
diligence by both companies has been completed. The agreement provides that
North Fork receives an option to acquire up to 19.9% of JSB's outstanding shares
at $58.75 per share should certain events occur. Also, JSB has a right to
terminate the agreement should the closing price of North Fork's shares decline
beyond a specified price and index, unless North Fork elects to increase the
exchange ratio.
The combination will increase North Fork's stated and tangible book
value per share by 25% and 30%, respectively, to $7.18 and $6.70. It is also
expected to be accretive to North Fork's earnings per share by $0.03 in the full
year 2000. Additionally, North Fork's projected capital ratio will be 10.4% or
an increase of 22%. North Fork's common shares outstanding will rise to
approximately 171 million for an estimated market capitalization of $3.4
billion. "Mr. Adikes and his entire board should be commended for having created
and preserved the value of this pristine organization. This balance sheet speaks
for itself. We are proud to have been selected as their merger partner," stated
John Adam Kanas, Chairman, President and Chief Executive Officer of North Fork.
He went on to say "The consummation of this transaction is very encouraging. We
believe it marks the return of a more rational trend in thrift consolidation to
this market."
<PAGE>
JSB had total assets of $1.6 billion, deposits of $1.2 billion and
stockholders' equity of $375 million at June 30, 1999. It conducts its business
from thirteen full service offices: ten located in the New York City borough of
Queens, one in the borough of Manhattan and two on Long Island. All of these
locations are complimentary to North Fork's branch network and will remain after
the merger is complete. JSB has consistently ranked among the highest performing
thrift companies in the nation. This well managed company brings a stable
deposit base, access to many customers and a solid capital position to the
combination with North Fork. Park T. Adikes, Chairman and Chief Executive
Officer of JSB will join North Fork's Board of Directors. "In this transaction,
our shareholders and employees will become part of one of the best performing
banks in the country. We are excited about the prospects of our future
together," stated Mr. Adikes.
Following the merger, North Fork will have approximately $13.2 billion
in assets, deposits of $7.6 billion and stockholders' equity of $1.2 billion. In
connection with the merger, North Fork will reissue approximately seven million
shares purchased under its 10% share repurchase program. Simultaneously, with
the approval of the merger transaction, North Fork's Board of Directors
rescinded the share repurchase program.
NORTH FORK PLANS AN ANALYST CONFERENCE CALL FOR TUESDAY, AUGUST 17,
1999 AT 2:00 P.M. EDT, to elaborate on the strategic rational and financial
implications of the acquisition. THE TELEPHONE NUMBER TO CALL IN THE UNITED
STATES IS 800-553-0351. An international telephone number is also available for
this conference. THE INTERNATIONAL TELEPHONE NUMBER IS 612-332-0932. The
presentation that will be used during the conference call may be obtained on
Tuesday, August 17, 1999 by logging on to WWW.NORTHFORKBANK.COM.
This press release contains certain forward looking statements with
respect to the financial condition, results of operations and business of North
Fork following the consummation of the merger that are subject to various
factors which could cause actual results to differ materially from such
projections or estimates. Such factors include, but are not limited to, the
possibility that anticipated cost savings and revenue enhancements might not be
realized and that adverse general economic conditions or an adverse interest
rate environment could develop. North Fork's current report on Form 8K filed on
or about August 16, 1999 discloses more fully these factors.
North Fork, with total assets of approximately $11.5 billion, operates
over 110 branch locations throughout the New York Metropolitan area and
Connecticut. It is ranked among the Top 50 Commercial Bank Holding Companies in
the United States, and its profitability and efficiency are ranked among the
industry's best.
CONTACTS: NORTH FORK BANCORP
DANIEL M. HEALY
EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
(516) 298-5000
OR
JSB FINANCIAL, INC.
THOMAS R. LEHMANN
EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
EDWARD LEKSTUTIS, VICE PRESIDENT
(516) 887-7000
EXHIBIT 99.2
NORTH FORK BANCORPORATION, INC. (NYSE:NFB) [NFB LOGO]
Acquisition of
JSB Financial, Inc.
- Parent Company of -
JAMAICA SAVINGS BANK, FSB
August 16, 1999
Conference Call Logistics
North Fork Bancorp will host a conference call at 2:00 P.M. E.D.T. Tomorrow,
Tuesday, AUGUST 17. The number to call in the United States is 800-553-0351 and
Internationally (612) 332-0932. Persons who find this time inconvenient can call
after 6:00 p.m. E.D.T. at USA 800-475-6701, or Internationally (320) 365-3844
Access Code#465955 for a taped rebroadcast that will be continuously played for
30 hours. A copy of this presentation can be accessed on the internet at
www.northforkbank.com.
<PAGE>
NORTH FORK BANCORP [NFB LOGO]
This presentation contains certain forward looking statements with respect to
the financial condition, results of operations and business of North Fork
following the consummation of the merger that are subject to various factors
which could cause actual results to differ materially from such projections or
estimates. Such factors include, but are not limited to, the possibility that
the anticipated cost savings, revenue enhancements and timing might not be
realized. Additionally, a deterioration in economic conditions adversely
effecting the interest rate environment could develop that may effect these
forward looking statements. North Fork's current report on Form 8-K filed on
August 16, 1999 discloses more fully these factors.
<PAGE>
DESCRIPTION OF JSB FINANCIAL [NFB LOGO]
Principal subsidiary is Jamaica Savings Bank, FSB with 13 locations in Queens,
Nassau, Suffolk and Manhattan.
JSB SUMMARY FINANCIAL HIGHLIGHTS AS OF JUNE 30, 1999
Total Assets $1.6 billion
Loans, net $1.2 billion
Securities $0.3 billion
Deposits $1.1 billion
Shareholders' Equity $375 million
Equity to Assets 22.8%
<PAGE>
THE MERGER TRANSACTION [NFB LOGO]
Fixed Exchange Ratio 3.0 shares of NFB for each share of
JSB
Acquisition Price Per Share $61.31 (based on 8/13/99 closing)
Aggregate Price $569 million
Price to JSB Book Value 152%
Price to JSB 2000 EPS Multiple 18.0 x
Premium to Market 4.4%
Pro forma Ownership NFB: 84% , JSB: 16%
Anticipated Closing First Quarter 2000
Anticipated Accounting Treatment Pooling-of-Interests and tax free
exchange
Approvals Regulatory and Shareholders'
Stock Option 19.9% of JSB
Walk away Double trigger walk away-- 20%
absolute price decline for NFB AND a
10% relative price decline from a
selected index
Due Diligence Completed, including Y2K
REISSUANCE OF 7.3 MILLION NFB TREASURY SHARES COINCIDENT WITH THE CLOSING.
<PAGE>
RATIONALE FOR TRANSACTION [NFB LOGO]
o Immediately increases tangible book value 30%.
o Immediately accretive to earnings per share.
o Provides $1.1 billion of additional core deposits.
o Adds 130,000 retail customers with new markets for commercial banking
products.
o In-market transaction, substantial cost savings and exceptional revenue
potential.
o Significantly increases our New York City market penetration.
o Very low execution risk.
<PAGE>
SIGNIFICANT INCREASE IN NORTH FORK'S BOOK VALUE [NFB LOGO]
[Following is a statistical data table in lieu of a graphic image in the printed
document]
TBV SBV At June 30, 1999
NFB $5.20 $5.79 o Tangible Book Value
ProForma $6.70 $7.18 increases 30% to $6.70.
o Stated Book Value
increases 25% to $7.18.
BASED ON ANALYST ESTIMATES OF NFB PROSPECTIVE EPS AND DIVIDEND PAYOUT, IT WOULD
TAKE 17 MONTHS TO REACH THESE BOOK VALUE LEVELS WITHOUT THIS TRANSACTION.
<PAGE>
CAPITAL POSITIONING WITH FLEXIBILITY [NFB LOGO]
[Following is a statistical data table in lieu of a graphic image in the printed
document]
"Well Capitalized" NFB Pro Forma
Leverage 5.00% 8.50% 10.35%
o North Fork's Leverage Ratio
rises to 10.35% from 8.50% at
June 30, 1999.
o Creates substantial capital
capacity for future strategic
and operating initiatives.
<PAGE>
ACCRETIVE TO NFB EARNINGS [NFB LOGO]
2000 After 2000
(in 000's except per share amounts) Tax Earnings EPS
---------------------- ------------------
North Fork Bancorp * $237,160 $1.75
JSB Financial * 32,198
Share Issuance (1) 7,118
ESTIMATED BENEFITS OF THE MERGER:
Cost Savings 13,154
Revenue Enhancements 4,680
Tax efficiencies (2) 4,707
Portfolio Optimization (3) 5,655
Pro Forma Combined $304,672 $1.78
THIS EARNINGS MODEL ASSUMES NO LEVERAGE ON ADDITIONAL CAPITAL.
* Mean IBES estimates
(1) Earnings on cash proceeds without leverage.
(2) Benefit derived from NFB's lower effective tax rate.
(3) Yield improvement on JSB liquid assets acquired.
<PAGE>
PRO FORMA BALANCE SHEET [NFB LOGO]
<TABLE>
<CAPTION>
June 30, 1999, in millions, except North Fork JSB Pro Forma %
per share amounts Bancorp Financial Combined Increase
--------------------- ------------------ ----------------- -------------
<S> <C> <C> <C> <C>
Assets $11,522 $1,620 $13,189 +14%
Investments $4,856 $319 $5,222 + 8%
Loans, net of unearned $6,064 $1,190 $7,254 +20%
Total Deposits $6,489 $1,110 $7,599 +17%
Total Borrowings $3,850 $50 $3,900 +1%
Capital Securities $199 -- $199 --
Stockholders' Equity $804 $375 $1,226 +53%
Intangibles $82 -- $82 --
Stated Book Value $5.79 $40.43 $7.18 +25%
Tangible Book Value $5.20 $40.43 $6.70 +30%
</TABLE>
<PAGE>
MERGER AND RESTRUCTURE CHARGE [NFB LOGO]
($ IN MILLIONS) Pre Tax After Tax
------- ---------
Merger Expenses $4.1 $3.5
RESTRUCTURE CHARGES:
Contracts and Severance $32.6 $22.1
Facility and Equipment 5.6 3.3
Other 0.9 0.5
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Total Restructure Charge $39.1 $25.9
Tax Bad Dept Recapture $11.6 $7.5
Total Merger and Restructure Charge $54.8 $36.9
<PAGE>
COMPARABLE M&A TRANSACTION PRICING [NFB LOGO]
($ IN MILLIONS)
<TABLE>
<CAPTION>
PRICE AS A MULTIPLE OF:
-------------------------------------
ANNOUNCE. ACQUIROR TARGET ANNOUNCED PREMIUM BOOK TANG. BOOK FORWARD
DATE VALUE TO MARKET VALUE VALUE EPS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
08/16/99 NORTH FORK JSB FINANCIAL $569.4 4.4% 1.52X 1.52X 18.0X
BANCORP
1999 YTD
07/28/99 BB&T Corporation Premier Bancshares $597.7 (3.3%) 3.27x 3.35x 21.5x
06/29/99 Hudson United Bncp JeffBanks Inc. 386.9 18.5 2.74 2.85 19.9
06/07/99 Sky Financial Group Mahoning Natl Bncp 306.6 54.5 3.16 3.16 18.6
06/02/99 Peoples Heritage Banknorth Group Inc. 776.9 22.8 2.35 3.06 14.2
05/07/99 Zions Bancorp Pioneer Bancorp. 346.5 NM 5.13 5.13 22.7
05/19/99 U.S. Bancorp Western Bancorp. 958.0 13.8 2.61 4.37 22.1
04/19/99 Citizens Bkng Corp. F&M Bncp Inc. 822.5 27.8 3.27 3.42 21.1
02/22/99 Union Planters Corp. Republic Bnkg Corp. 412.0 10.8 2.42 2.60 19.3
02/18/99 U.S. Bancorp Bank of Commerce 306.3 15.9 4.55 4.55 19.6
02/18/99 Summit Bancorp Prime Bancorp Inc. 302.5 0.5 3.25 3.35 21.4
1999 MEDIAN: 15.9% 3.20X 3.35X 20.5X
</TABLE>
<PAGE>
IN SHORT THIS TRANSACTION. . . [NFB LOGO]
... adds to book value.
... adds to GAAP earnings.
... adds over $1 billion in core deposits.
... adds 130,000 more customers.
... does not add to credit risk.
.... is very simple to execute.
