EXHIBIT 99
For More Information:
Peter G. Humphrey Douglas L. McCabe
President & CEO President & CEO
(716) 786-1101 (607) 776-2013
For Immediate Release:
November 2, 2000
Financial Institutions, Inc. Acquires Bath National Corporation to Strengthen
Its Position as Central and Western New York's Preeminent Community Bank Holding
Company
WARSAW/BATH, N.Y. - - Financial Institutions, Inc. (Nasdaq: "FISI") and Bath
National Corporation (OTC: "BATH") jointly announce the signing of a definitive
agreement for Financial Institutions to acquire Bath National Corporation and
its banking subsidiary, Bath National Bank.
In the transaction, Bath National Corporation shareholders will receive $48.00
per share in cash for each share of Bath National Corporation stock, for a total
transaction value of approximately $62.6 million. The merger will be accounted
for as a purchase transaction.
At September 30, 2000, Bath National Corporation, including its subsidiary Bath
National Bank, had total assets of $287.3 million and total equity of $27.7
million. Bath operates 11 branches in Steuben, Yates, Ontario and Schuyler
Counties. They have the largest deposit market share in Steuben County.
Bath National Bank, which will continue to operate as a separately chartered and
managed organization, will become the fifth banking subsidiary in Financial
Institution's super community bank franchise. The combined company will have
approximately $1.55 billion in assets.
Financial Institutions' is the holding company for Wyoming County Bank, The
National Bank of Geneva, The Pavilion State Bank and First Tier Bank & Trust.
The Company provides a wide range of consumer and commercial banking products
and services to individuals, municipalities and businesses, including
agribusiness. As of September 30, 2000, the company had $1.26 billion in assets
and operated 31 full-service offices.
Financial Institutions Chief Executive Officer Peter G. Humphrey commented,
"Bath National is a great strategic fit for Financial Institutions. We both have
the same community banking philosophy and our existing franchises are in
contiguous markets. Both companies have a record of outstanding financial
performance and a tradition of highly responsive service to our customers. This
transaction also has the benefit that it leverages our strong capital position.
We believe this acquisition should be tremendously successful."
Douglas L. McCabe, President and Chief Executive Officer of Bath National
replied, "We are thrilled about our pending affiliation with Financial
Institutions. It allows Bath National to better serve its customers with the
very best product and service line while remaining strongly committed to our
local communities. We will continue operating as Bath National Bank with a local
management team and Board of Directors."
Following the merger, Mr. McCabe will join the Board of Directors of Financial
Institutions. Yet to be determined members of Financial Institutions' Board of
Directors will join the subsidiary Board of Bath National Bank.
Financial Institutions expects the acquisition to be neutral to GAAP earnings,
but accretive to cash earnings, in 2001. Those estimates assume only 25% cost
savings from Bath's non-interest expense base. The purchase price equates to
approximately 226% of Bath National's book value.
The agreement is subject to the approval of Bath National's shareholders, as
well as the approval of regulators. It is anticipated that the merger will be
completed early in the second quarter of 2001. As part of the agreement, Bath
National granted Financial Institutions an option to purchase shares of its
outstanding common stock under certain circumstances.
Information regarding the companies and the transaction will be available on
Financial Institutions' Web site at www.fiiwarsaw.com. A conference call to
discuss the acquisition will be held at 11:00 AM Eastern Standard Time on
Friday, November 3, 2000. Interested parties should call 800-818-5664 and
reference Financial Institutions Conference Call. Persons who find that time
inconvenient can call 888-203-1112 and use the passcode 780490 for a taped
rebroadcast.
* * * * *
This news release contains certain forward looking statements with respect to
the success of the merger, Bath National's 2001 earnings, the timing of the
completion of the merger and the financial condition, post-merger earnings and
results of operations of Financial Institutions, Inc. 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 possibilities that the anticipated cost
savings, operational integration and timing currently anticipated with respect
to the merger might not be realized. Additionally, deterioration in economic
conditions adversely affecting the economy and the interest environment could
develop that may affect these forward-looking statements. Additional
considerations are presented at pages 10 through 13 of Financial Institutions,
Inc.'s initial public offering prospectus dated June 25, 1999, which is on file
with the Securities and Exchange Commission.
Bath National Corporation will be filing a proxy statement and other relevant
documents concerning the merger with the Securities and Exchange Commission
("SEC"). We urge investors to read the proxy statement and any other relevant
documents filed with the SEC because they contain important information. Once
the documents are filed (anticipated to be early in the first quarter of 2001),
investors will be able to obtain the documents free of charge at the SEC's
website www.sec.gov. Documents filed with the SEC will also be available free of
charge by contacting Bath National Corporation, 44 Liberty Street, Bath, New
York 14810, telephone (607) 776-2013 (with respect to documents filed by Bath
National) or Financial Institutions, Inc., 220 Liberty Street, Warsaw, New York
14569, telephone (716) 786-1100 (with respect to documents filled by Financial
Institutions). Investors should read the proxy statement carefully before making
a decision concerning the merger.
<PAGE>
Financial Institutions, Inc.
to acquire
Bath National Corporation
To Strengthen Its Position as Central and Western New York's Preeminent
Community Bank Holding Company
November 3, 2000
<PAGE>
Forward Looking Statements
This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. This presentation contains
estimates of future operating results for Financial Institutions, Inc. and Bath
National Corporation on a stand-alone and pro-forma combined basis and estimates
of financial condition and cost savings on a combined basis. These statements
are not historical facts and include expressions about management's confidence
and strategies and management's expectations about new and existing programs,
products, relationships, opportunities, technology and market conditions. Such
forward-looking statements involve certain risks and uncertainties. Actual
results may differ materially from the results discussed in these
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, movements in interest rates, the possibility of
disruption in credit markets, successful implementation and integration of this
and other potential transactions, and the impact of legal and regulatory
barriers and structures. Financial Institutions, Inc. assumes no obligation for
updating such forward-looking statements at any time.
<PAGE>
Transaction Rationale
o Neutral to GAAP earnings in 2001 and accretive in 2002
o Accretive to cash earnings in 2001 and 2002
o Combines two high performing community banks
o Conservative cost savings estimate of 25% for contiguous franchise
o Effectively leverages Financial Institutions' strong capital
position
o Expands franchise into Steuben and Schuyler counties and bolsters
position in Ontario and Yates Counties
o Pricing in line with comparable transactions
o Low risk integration
<PAGE>
Transaction Summary
Price Per Share: $48.00 per BATH share
Consideration: Cash
Transaction Value: $62.6 million
Accounting: Purchase
Est. One-Time Merger Costs: $2.4 million after tax
Expected Shareholder Approval: 1st Quarter - 2001
Expected Closing: 2nd Quarter - 2001
Proposed Trust Preferred Offering: $20.0 million
<PAGE>
Transaction Multiples
Price Per BATH Share: $48.00
Premium to Recent Market Price: 29.7%
Price / Stated 9/30/00 Book Value Per Share: 226%
Price / Stated 9/30/00 Tangible Book Value Per Share: 227%
Price / 2001 Internal GAAP EPS Estimate: 15.6x
Core Deposit Premium: 17.2%
<PAGE>
Branch Locations
Marketplace map not included.
<PAGE>
Market Shares by County
Market
Institution County # of Br. Rank Share % Deposits
----------- ------ -------- ---- ------- --------
Bath National Corporation Market Shares:
Ontario, NY 1 10 1.21 11,914
Proforma FISI/BATH Ontario, NY 4 2 22.76 223,673
Yates, NY 2 3 17.57 38,549
Proforma FISI/BATH Yates, NY 3 1 62.63 137,393
Steuben, NY 7 1 25.91 176,046
Schuyler, NY 1 5 2.17 2,385
Other Financial Institutions County Market Shares:
Wyoming, NY 6 1 44.12 201,752
Livingston, NY 6 2 28.74 149,252
Genesee, NY 4 3 8.21 89,777
Cattaraugus, NY 5 4 11.82 79,798
Seneca, NY 1 5 7.48 20,976
Allegany, NY 1 5 2.05 6,498
<PAGE>
Deposit Mix
<TABLE>
<CAPTION>
Financial Bath Pro Forma % of
Institutions National Combined Total
------------ -------- -------- -----
<S> <C> <C> <C> <C>
Demand Deposits ............................. $ 142,375 $ 36,669 $ 179,044 14%
Savings, Money Market & Int. Bearing Checking 317,115 86,059 403,174 32%
Certificates of Deposit ..................... 590,380 93,414 683,794 54%
Total Deposits ......................... $1,049,870 $ 216,142 $1,266,012
Borrowed Funds .............................. $ 69,266 $ 40,924 $ 110,190
Average Cost of Interest Bearing Liabilities 4.19% 4.07% 4.16%
Cost of Funds ............................... 3.98% 3.52% 3.88%
Net Interest Margin ......................... 4.84% 4.86% 4.85%
</TABLE>
<PAGE>
Earnings Impact
<TABLE>
<CAPTION>
2001 Estimate (1) 2002 Estimate (1)
Pro Forma Earnings Dollars Per Share Dollars Per Share
------- --------- ------- ---------
<S> <C> <C> <C> <C>
Financial Institutions .................. $ 18,148 $ 1.65 $ 19,599 $ 1.78
Bath National ........................... 3,000 $ 2.30 4,200 $ 3.22
After-Tax Cost Savings (2) .............. 978 1,509
Amortization of Intangibles ............. (1,383) (1,844)
Additional Merger Related Adjustments (3) (2,561) (3,414)
Pro Forma Earnings to Common ............ $ 18,183 $ 1.65 $ 20,050 $ 1.82
Net GAAP EPS Accretion .................. 0.2% 2.3%
Pro Forma Cash Earnings ................. $ 20,270 $ 1.84 $ 22,598 $ 2.05
Net Cash EPS Accretion .................. 8.4% 11.3%
Preferred Dividends ..................... 1,500 1,500
Pro Forma Total Earnings ................ $ 19,683 $ 21,550
Pro Forma Diluted Shares ................ 10,999 10,999
</TABLE>
(1) IBES consensus estimates used for FISI for 2001; for illustrative purposes
8% increase in FISI earnings assumed for 2002. Internal estimates used for
BATH, assumes transaction closes 3/31/01.
(2) Assumes fully phased-in cost savings in 2002
(3) Primarily includes opportunity cost of capital
<PAGE>
Pro Forma Balance Sheet
<TABLE>
<CAPTION>
9/30/00 9/30/00 Estimated
Financial Bath 3/31/01
Institutions National Pro Forma
------------ -------- ---------
<S> <C> <C> <C>
Intangible Assets ............. 2,557 227 39,000
Total Assets .................. $1,261,740 $ 287,343 $1,550,000
Total Deposits ................ $1,049,870 $ 216,142 $1,300,000
Trust Preferred Securities .... $ -- $ -- $ 20,000
Preferred Equity .............. $ 17,758 $ -- $ 17,758
Common Equity ................. $ 108,707 $ 27,743 $ 115,500
Period End Shares Outstanding . 10,987 1,304 10,987
Book Value Per Share .......... $ 9.89 $ 21.28 $ 10.51
Tangible Book Value Per Share . $ 9.66 $ 21.11 $ 6.96
Tangible Common Equity / Assets 8.43% 9.58% 5.06%
Leverage Ratio ................ 10.37% 9.73% 7.66%
</TABLE>
