<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST PALMETTO FINANCIAL CORPORATION
----------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
FIRST PALMETTO FINANCIAL CORPORATION
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
First Palmetto Common Stock par value $.01
------------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
35,000
------------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
Based upon one fiftieth of one percent multiplied by transaction value
------------------------------------------------------------------------
of (i) $75.00 per preferred shares multiplied by (ii) 35,000 fractional
------------------------------------------------------------------------
shares.
------------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
$2,625,000.00
------------------------------------------------------------------------
5. Total fee paid:
$525.00
------------------------------------------------------------------------
Fee paid previously with preliminary materials:
[X] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount previously paid:
$525.00
------------------------------------------------------------------------
2. Form, Schedule or Registration Statement No.:
Schedule 13E-3
------------------------------------------------------------------------
3. Filing Party:
First Palmetto Financial Corporation
------------------------------------------------------------------------
4. Date Filed:
February 2, 2000
------------------------------------------------------------------------
<PAGE>
________ __, 2000
Dear Stockholder:
It is our pleasure to invite you to attend the Annual Meeting of
Stockholders of First Palmetto Financial Corporation ("First Palmetto"), the
holding company for First Palmetto Savings Bank, F.S.B. (the "Bank"). The
Annual Meeting will be held at the Bank's main office, 407 DeKalb Street,
Camden, South Carolina, on ______, _________ __, 2000 at ____ _.m., local time.
Notice of the Annual Meeting, together with a Proxy Statement and Proxy
Card, are enclosed and describe in detail the formal business we will conduct.
As an integral part of the Annual Meeting, we will report on First Palmetto's
and the Bank's operations. Our directors and officers will, of course, be
available for your questions.
Detailed information concerning our business activities and operating
results through September 30, 1999 is contained in our Annual Report, which is
enclosed.
Your vote is important, regardless of the number of shares you own. ON
BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE
ANNUAL MEETING. This will not prevent you from voting in person but will assure
that your vote is counted if you are unable to attend the Annual Meeting.
Thank you for your cooperation and continuing support.
Sincerely,
Samuel R. Small
President and Chief Executive Officer
<PAGE>
FIRST PALMETTO FINANCIAL CORPORATION
407 DEKALB STREET
CAMDEN, SOUTH CAROLINA 29020
(803) 432-2265
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON __________ __, 2000
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of First Palmetto Financial Corporation ("First Palmetto"), the
holding company for First Palmetto Savings Bank, F.S.B. (the "Bank"), will be
held at the Bank's main office, 407 DeKalb Street, Camden, South Carolina, on
Monday, ___________ ___, 2000, at ____ _.m., local time, for the following
purposes:
1. The election of two directors of First Palmetto.
2. The approval of a proposal to amend First Palmetto's Restated
Certificate of Incorporation to effect a 1-for-125 reverse stock
split of the Common Stock and to issue shares of Preferred Stock in
exchange for shares of Common Stock held by any First Palmetto
stockholder who, following the reverse stock split, would otherwise
hold less than one share of common stock of record in any separate
account.
3. Such other matters as may properly come before the Annual Meeting or
any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Annual Meeting.
Pursuant to the Bylaws, the Board of Directors has fixed the close of business
on _________ __, 2000 as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting. Only holders of common
stock of record at the close of business on that date will be entitled to notice
of and to vote at the Annual Meeting or any adjournments thereof.
In the event there are not sufficient votes to approve any one or more of the
foregoing proposals at the time of the Annual Meeting, the Annual Meeting may be
adjourned in order to permit further solicitation of proxies by First Palmetto.
You are requested to complete and sign the enclosed Proxy Card, which is
solicited by the Board of Directors, and to mail it promptly in the enclosed
envelope. Your proxy will not be used if you attend and vote at the Annual
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
DARLENE H. LOVE
SECRETARY
Camden, South Carolina
_________ __, 2000
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE FIRST PALMETTO THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. AN ADDRESSED ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
- --------------------------------------------------------------------------------
<PAGE>
FIRST PALMETTO FINANCIAL CORPORATION
407 DEKALB STREET
CAMDEN, SOUTH CAROLINA 29020
(803) 432-2265
- --------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
___________ __, 2000
- --------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of First Palmetto Financial Corporation
("First Palmetto"), the holding company for First Palmetto Savings Bank, F.S.B.
(the "Bank"), to be used at the Annual Meeting of Stockholders of First Palmetto
(the "Annual Meeting") to be held at the Bank's main office, 407 DeKalb Street,
Camden, South Carolina, on __________,_________ __, 2000, at _____ _.m., local
time. It is anticipated that this Proxy Statement will be mailed to
stockholders on or about _________ __, 2000.
If the enclosed form of proxy is properly executed and returned to First
Palmetto in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
Executed but unmarked proxies will be voted FOR the election of the two nominees
of First Palmetto's Board of Directors as directors and FOR the proposed reverse
stock split. Proxies marked as abstentions will not be counted as votes cast. In
addition, shares held in street name which have been designated by brokers on
proxy cards as not voted will not be counted as votes cast. Proxies marked as
abstentions or as broker no votes, however, will be treated as shares present
for purposes of determining whether a quorum is present. Except for procedural
matters incidental to the conduct of the Annual Meeting, First Palmetto does not
know of any other matters that are to come before the Annual Meeting. If any
other matters are properly brought before the Annual Meeting as to which proxies
in the accompanying form confer discretionary authority, the persons named in
the accompanying proxy will vote the shares represented by such proxies on such
matters as determined by a majority of the Board of Directors. The proxies
solicited on behalf of the Board of Directors confer discretionary authority
upon the holders thereof with respect to matters incident to the conduct of the
Annual Meeting and with respect to any other matter presented at the Annual
Meeting if notice of such matter has not been delivered to First Palmetto in
accordance with the Certificate of Incorporation.
The securities which can be voted at the Annual Meeting consist of shares
of common stock of First Palmetto, par value $0.01 per share (the "Common
Stock"). Each share entitles its owner to one vote on all matters, including the
election of directors. The close of business on _________ __, 2000 has been
fixed by the Board of Directors as the record date for determination of
stockholders entitled to vote at the Annual Meeting (the "Record Date"). The
number of shares outstanding on that date was 712,010. The presence, in person
or by proxy, of one-third of the total number of outstanding shares of Common
Stock is necessary to constitute a quorum at the Annual Meeting.
- --------------------------------------------------------------------------------
REVOCATION OF PROXIES
- --------------------------------------------------------------------------------
The presence of a stockholder at the Annual Meeting will not automatically
revoke such stockholder's proxy. However, stockholders may revoke a proxy at any
time prior to its exercise by filing with the Secretary of First Palmetto a
written notice of revocation, by delivering to First Palmetto a duly executed
proxy bearing a later date or by attending the Annual Meeting and voting in
person.
<PAGE>
- --------------------------------------------------------------------------------
STOCK OWNERSHIP OF MANAGEMENT
- --------------------------------------------------------------------------------
The following table sets forth information as of the Record Date with
respect to the shares of Common Stock beneficially owned by each director and
director emeritus of First Palmetto, including the Chief Executive Officer, and
by all directors, executive officers and directors emeritus of First Palmetto as
a group. This information is based on information furnished to First Palmetto
by such persons.
<TABLE>
<CAPTION>
Amount and Nature Percent of
of Beneficial Common Stock
Ownership (1) Outstanding
------------- -----------
<S> <C> <C>
Directors:
H. Davis Green, Jr. 28,281 3.97%
Samuel R. Small 81,660 11.47
Steve G. Williams, Jr. 31,204 4.38
Pierce W. Cantey, Jr. 25,974 3.65
William R. Clyburn 6,500 *
Frank D. Goodale, Jr. 6,140 *
Donald H. Holland 11,300 1.59
Charlie E. Nash 14,221 2.00
Glenn G. Tucker 56,087 7.88
All Directors and Executive Officers
as a Group (9 persons) 261,367 36.71
Directors Emeritus:
H.B. Marshall, Jr. 2,500 *
William F. Tripp, Jr. 2,500 *
All Directors, Executive Officers
and Directors Emeritus as a Group (11 persons) 266,367 37.41
</TABLE>
______________
* Less than 1% of the outstanding Common Stock.
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934
(the "1934 Act"), a person is considered the beneficial owner of any shares
of Common Stock (a) over which he has or shares voting or investment power
or (b) of which he has the right to acquire beneficial ownership at any
time within 60 days of the Record Date. As used herein, "voting power" is
the power to vote or direct the vote of shares, and "investment power" is
the power to dispose or direct the disposition of shares. This table
includes shares owned directly by directors and officers of First Palmetto
as well as shares held by their spouses and minor children and trusts of
which certain of them are trustees, but does not include shares held or
beneficially owned by other relatives as to which they disclaim beneficial
ownership.
Section 16(a) Beneficial Ownership Reporting
Section 16(a) of the 1934 Act requires First Palmetto's officers and
directors, and persons who own more than 10% of a registered class of First
Palmetto's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required to furnish First Palmetto with copies
of all such reports. Based solely on its review of copies of such reports
received by it, or written representations from certain reporting persons that
no annual report of change in beneficial ownership is required, First Palmetto
believes that, during the year ended September 30, 1999, all such filing
requirements were complied with.
2
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL HOLDERS OF COMMON STOCK
- --------------------------------------------------------------------------------
The following table sets forth information as of the Record Date with
respect to the persons believed by First Palmetto to be the beneficial owners of
more than five percent of the outstanding shares of Common Stock. This
information is based upon the most recent Schedule 13D filed by such persons
with the Securities and Exchange Commission or information provided to First
Palmetto by such persons.
Percent
Name and Address Amount and Nature of of Common Stock
of Beneficial Owner Beneficial Ownership (1) Outstanding
- ------------------- ------------------------ -----------
Samuel R. Small 81,660 11.47%
407 DeKalb Street
Camden, South Carolina
Glenn G. Tucker 56,087 7.88%
1510 Lyttleton Street
Camden, South Carolina
______________
(1) For the definition of beneficial ownership and additional information with
respect to the nature of the beneficial ownership, see footnote (1) to the
table in "Stock Ownership of Management."
- --------------------------------------------------------------------------------
PROPOSAL I -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
Pursuant to First Palmetto's Restated Certificate of Incorporation, the
directors are divided into three classes, as nearly equal in number as possible,
with the number of directors as specified in the Bylaws. In general, the term of
office of only one class of directors expires in each year, and their successors
are elected for terms of three years and until their successors are elected and
qualified. Delaware law provides that directors shall be elected by a plurality
of the votes of the shares present in person or represented by proxy at the
Annual Meeting and entitled to vote on the election of directors.
The Board of Directors has nominated Pierce W. Cantey, Jr. and William R.
Clyburn, who are currently directors of First Palmetto (see below), to serve for
terms of three years and until their successors are elected and qualified. It is
the intention of the persons named in the proxy to vote the shares represented
by each properly executed proxy for the election as directors of such nominees
for their respective terms, unless otherwise directed by the stockholder. The
nominees have consented to stand for election and to serve if elected as
directors. If any person nominated by the Board of Directors fails to stand for
election or is unable to accept election, the proxies will be voted for the
election of such other person as the Board of Directors may recommend.
The Board of Directors recommends that stockholders vote "FOR" the election
of the nominees of the Board of Directors. Unless otherwise indicated, properly
executed proxies will be voted in accordance with the Board's recommendation.
3
<PAGE>
Information as to Directors, Directors Emeritus and Executive Officers
The following table sets forth certain information with respect to First
Palmetto's directors and executive officers.
<TABLE>
<CAPTION>
Year First Year
Elected Term
Name Age(1) Position(s) Held Director(2) Expires
- ---- ------ ---------------- ----------- -------
<S> <C> <C> <C> <C>
H. Davis Green, Jr. 62 Chairman of the Board 1970 2001
of First Palmetto
Samuel R. Small 52 President and Chief Executive 1980 2002
Officer of First Palmetto and
Chairman of the Board, President
and Chief Executive Officer of
the Bank
Steve G. Williams, Jr. 43 Senior Vice President and 1989 2001
Treasurer of First Palmetto
and Senior Vice President
Regulatory Administration/
Communications of the Bank
Pierce W. Cantey, Jr. 58 Director 1996 2000
William R. Clyburn 63 Director 1968 2000
Frank D. Goodale, Jr. 66 Director 1979 2002
Donald H. Holland 71 Director 1971 2001
Charlie E. Nash 58 Director 1983 2002
Glenn G. Tucker 50 Director 1980 2001
</TABLE>
_________________
(1) As of December 31, 1999.
(2) Except for Mr. Cantey, year first elected as a director of Palmetto State
Savings Bank of South Carolina or First Federal Savings and Loan Association
of Camden, the predecessors of the Bank, which is First Palmetto's wholly-
owned subsidiary. Each director of First Palmetto is also a director of the
Bank.
The principal occupations and business experience for the past five years
of each director, director emeritus and executive officer of First Palmetto is
set forth below.
Directors:
- ---------
H. Davis Green, Jr. is an appraiser and the owner of H. Davis Green, Jr.
Appraisals in Camden. Mr. Green has been Chairman of the Board of First Palmetto
since 1991.
Samuel R. Small has been President and Chief Executive Officer of First
Palmetto and Chief Executive Officer of the Bank since 1990. In 1991, he became
Chairman of the Board of the Bank.
Steve G. Williams, Jr. has been Senior Vice President and Treasurer of
First Palmetto and an executive officer of the Bank since 1990.
4
<PAGE>
Pierce W. Cantey, Jr. is the managing partner of Cantey, Tiller, Pierce and
Associates, LLP, an accounting firm.
William R. Clyburn is the retired general manager of H&H Chevrolet. He is
President of Bill Clyburn Realty, Inc.
Frank D. Goodale, Jr. is a jeweler and owner of F.D. Goodale, a jewelry
retailer in Camden.
Donald H. Holland is an attorney in Camden. He has served as a South
Carolina State Senator since 1969.
Charlie E. Nash is the retired President of Charlie E. Nash Insurance
Agency, Inc. in Camden.
Glenn G. Tucker has been President of Tucker Down East Resources, Inc., a
recreational services provider, since January 1996. Prior to that, he was the
co-publisher of the Chronicle - Independent in Camden.
Directors Emeritus:
- ------------------
H.B. Marshall, Jr. is a retired insurance agent.
William F. Tripp, Jr. is a retired plant manager of the E.I. DuPont de
Nemours Textile Fibers Plant in Camden.
- --------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
First Palmetto's entire Board of Directors serves as a nominating committee
for the purpose of selecting the Board's nominees for election as directors. The
Board of Directors held one meeting as a nominating committee during fiscal
1999. While the Board of Directors will consider nominees recommended by
stockholders, it has not actively solicited recommendations from First
Palmetto's stockholders for nominees, nor has it established any procedures for
this purpose other than as set forth in the Certificate of Incorporation. To be
timely, a stockholder's notice of nomination or new business must be delivered
to or mailed and received at the principal executive offices of First Palmetto
not later than 30 days nor more than 90 days prior to the annual meeting;
provided, however, that in the event that less than 45 days' notice or prior
public disclosure of the date of the annual meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 15th day following the date on which
notice is mailed or prior public disclosure is made of the date of an annual
meeting. Public disclosure of the date of the Annual Meeting was made by the
issuance of a press release on _________ __, 1999. A stockholder's notice of
nomination or new business must also set forth certain information specified in
First Palmetto's Certificate of Incorporation concerning the stockholder and
each person the stockholder proposes to nominate for election or the business
the stockholder proposes to bring before the annual meeting. Stockholder
nominations and new business may be proposed by any stockholder eligible to vote
at an annual meeting, provided the notice is timely and complies with the
informational requirements of the Certificate of Incorporation. Nominations and
new business by any stockholder eligible to vote at the Annual Meeting were
required to be received by First Palmetto on or before __________ __, 2000.
There are no standing committees of the Board of Directors of First
Palmetto. The Board of Directors of the Bank carries out many of its duties
through committees.
The Bank's Audit Committee, currently composed of directors Cantey, Holland
and Nash, is responsible for the review and evaluation of First Palmetto's and
the Bank's internal controls and accounting procedures. It also periodically
reviews audit reports with the independent auditors and recommends the annual
appointment of such auditors. The Audit Committee held one meeting during fiscal
1999.
The Bank's Compensation Committee, currently composed of directors Cantey,
Green, Holland, Nash and Tucker held one meeting during fiscal 1999.
5
<PAGE>
During fiscal 1999, First Palmetto's Board of Directors held five meetings
and the Bank's Board of Directors held 12 meetings. No director of First
Palmetto and the Bank attended fewer than 75% of the total meetings of the
boards of directors and committees on which such director served during this
period.
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The following table sets forth cash and noncash compensation awarded to or
earned by the Chief Executive Officer of First Palmetto during fiscal 1999, 1998
and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
----------------------------------------------------------------------
Awards Payouts
----------------------------------------
Other
Annual Restricted Securities All Other
Compen- Stock Underlying LTIP Compen-
Name and Salary Bonus sation (2) Awards(s) Options/SARs Payouts sation (3)
Principal Position (1) Year ($) ($) ($) ($) (#) ($) ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Samuel R. Small 1999 200,000 10,000 -- -- -- (4) -- 30,350
President and Chief 1998 182,000 -- -- -- -- -- 17,562
Executive Officer 1997 167,667 -- -- -- -- -- 8,400
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No other executive officer earned in excess of $100,000 in salary and bonus
in fiscal 1999, 1998 and 1997.
(2) Executive officers of First Palmetto receive indirect compensation in the
form of certain perquisites and other personal benefits. The amount of such
benefits in fiscal 1999, 1998 and 1997 by the named executive officer did
not exceed 10% of the executive's annual salary and bonus.
(3) Represents directors' fees for each of fiscal 1999, 1998 and 1997 and
unused vacation for fiscal 1999, 1998 and 1997.
(4) No options were granted or outstanding during fiscal 1999.
Directors' Compensation
During fiscal 1999, each director of the Bank received an annual fee of
$9,000. Non-employee directors also receive a fee of $100 per committee meeting
attended.
Report of the Compensation Committee
As members of the Compensation Committee of the Bank, it is our duty to
review compensation policies applicable to executive officers; to consider the
relationship of corporate performance to that compensation; to recommend salary
and bonus levels for executive officers for consideration by the Board of
Directors of the Bank; and to administer various incentive plans of First
Palmetto and the Bank.
Overview. Under the compensation policies of the Bank, which are endorsed
by the Compensation Committee, compensation is paid based both on the executive
officer's performance and the performance of First Palmetto and the Bank. In
assessing the performance of First Palmetto and the Bank for purposes of
compensation decisions, the Compensation Committee considers a number of
factors, including profits of First Palmetto and the Bank during the past year
relative to their profit plans, changes in the value of First Palmetto's stock,
reports of federal regulatory examinations of First Palmetto and the Bank,
growth, business plans for future periods, and regulatory capital levels. The
Compensation Committee assesses individual executive performance based upon its
determination of the officer's contributions to the performance of First
Palmetto and the Bank and the accomplishment of First Palmetto's and the Bank's
strategic goals. In assessing performance for the year ended September 30, 1999
and previous years, the members of the Compensation Committee did not make use
of a
6
<PAGE>
mechanical weighting formula or use specific performance targets, but instead
weighed the described factors as they deemed appropriate in the total
circumstances.
Base Salary. The 1999 salary levels of First Palmetto's senior officers
were established in 1998 consistent with this compensation policy. In its 1998
review of base compensation, the Compensation Committee determined that the
performance of Mr. Small in managing First Palmetto and the Bank was
satisfactory, based upon the 1998 financial performance of First Palmetto,
including the growth in assets, income, and capitalization during 1998; the
financial performance trends for 1998 and the preceding four years, which
included growth in assets, net income, and stockholders' equity in each year;
the results of confidential regulatory examinations; his continued involvement
in community affairs in the communities served by the Bank; First Palmetto's
planned levels of financial performance for 1999; and a general level of
satisfaction with the management of First Palmetto and the Bank. Based upon the
results of this review, the salary of Mr. Small was established at $200,000 per
year for 1999, which represented an increase of 9.9% over his 1998 base salary.
The Compensation Committee believes that Mr. Small's total compensation for 1999
appropriately reflected his contribution to First Palmetto and the Bank based on
the factors considered for compensation decisions.
December 31, 1999
H. Davis Green
Donald H. Holland
Charlie E. Nash
Glenn G. Tucker
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is a former or current officer or
employee of First Palmetto or the Bank.
Donald H. Holland, a member of the Compensation Committee and an attorney
in Camden, South Carolina, renders legal services to the Bank in connection with
loan closings and other corporate matters.
Stock Performance Comparisons
The following graph, which was prepared by SNL Securities LC,
Charlottesville, Virginia, shows the cumulative total return on the Common Stock
of First Palmetto over the last five years compared with the S&P 500 Index and a
portfolio of all publicly traded thrifts and thrift holding companies.
Cumulative total return on the stock or the index equals the total increase in
value since September 30, 1994 assuming reinvestment of all dividends paid into
the stock or the index, respectively. The graph was prepared assuming that $100
was invested on September 30, 1994 in the Common Stock, and the securities
included in the indexes. There is not an established public trading market for
the Common Stock.
7
<PAGE>
CUMULATIVE TOTAL STOCKHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
September 30, 1994 through September 30, 1999
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Period Ending
---------------------------------------------------------------------------------
Index 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Palmetto Financial Corp. 100.00 103.27 132.34 168.65 224.31 341.30
S&P 500 100.00 129.75 156.12 219.10 238.94 305.28
SNL Thrift Index 100.00 130.96 158.17 274.83 246.40 234.70
</TABLE>
Certain Transactions
First Palmetto and the Bank have had, and expect to have in the future,
transactions in the ordinary course of business with directors and executive
officers and members of their immediate families, as well as with principal
stockholders. All loans included in such transactions were made in the ordinary
course of business, on substantially the same terms, including interest rates
and collateral, as those prevailing for comparable transactions with non-
affiliated persons. It is the belief of management that such loans neither
involved more than the normal risk of collectibility nor presented other
unfavorable features.
8
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL II --REVERSE STOCK SPLIT
- --------------------------------------------------------------------------------
Summary
The Board of Directors has authorized, and recommends for your approval, a
proposal (the "Reverse Stock Split Proposal") to amend First Palmetto's Restated
Certificate of Incorporation to effect a 1-for-125 reverse stock split of the
Common Stock and to issue shares of preferred stock, par value $.01 per share
(the "Preferred Stock"), in exchange for shares of Common Stock held by any
First Palmetto stockholder who, following the reverse stock split, would hold
less than one share of Common Stock of record in any separate account.
Stockholders of record whose shares of Common Stock would otherwise be
converted into less than 1 share of Common Stock in the reverse stock split will
receive one share of Preferred Stock for each such share, while registered
stockholders whose shares of Common Stock are converted into 1 or more shares of
Common Stock will receive "new" Common Stock. We refer to the reverse stock
split and the conversion of shares of Common Stock into Preferred Stock as the
"Transaction." We also refer to our stockholders whose shares of Common Stock
are registered in their names as "registered stockholders." If approved, the
Reverse Stock Split Proposal will take effect on the date of filing with the
Secretary of State of Delaware of a Certificate of Amendment, unless First
Palmetto specifies otherwise (the "Effective Date"). In order to complete the
Reverse Stock Split Proposal, a majority of the stockholders entitled to vote at
the Annual Meeting must approve amendments to First Palmetto's Restated
Certificate of Incorporation (the "Charter"). Each member of the Board of
Directors and all executive officers of First Palmetto have indicated that they
intend to vote in favor of the Reverse Stock Split Proposal.
We attach the proposed amendments to the Charter to this Proxy Statement as
Appendix A. If approved, the Reverse Stock Split Proposal will affect First
Palmetto stockholders as follows after completion:
<TABLE>
<CAPTION>
Stockholder as of Effective Date Net Effect After Reverse Stock Split
- -------------------------------- ------------------------------------
<S> <C>
Registered stockholders holding 125 shares Shares of Common Stock will be converted into one
of Common Stock in a record account. whole share of new Common Stock on a 1-for-125
basis.
Registered stockholders holding fewer than Shares of Common Stock will be converted into
125 shares of Common Stock in a record whole shares of Preferred Stock on a one-for-one
account. basis.
Registered stockholders holding more than Shares of Common Stock will be converted into
125 shares of Common Stock in a record one or more shares of new Common Stock on a
account. 1-for-125 basis and the remainder, if any, will
be converted into whole shares of Preferred Stock
on a one-for-one basis.
Stockholders holding Common Stock in street Nominees (such as a bank or broker) may have
name through a nominee (such as a bank or required procedures, and First Palmetto stockholders
broker) holding Common Stock in street name should contact
their nominees to determine how they will be
affected by the reverse stock split.
</TABLE>
Reasons for Transaction
The Board of Directors recommends that First Palmetto stockholders approve
the Reverse Stock Split Proposal for the following reasons, among others:
9
<PAGE>
. First Palmetto has approximately 394 registered stockholders. There is
no established public trading market in which shares of the Common
Stock are regularly traded, nor are there any uniformly quoted prices
for such shares. As a result, the market for the Common Stock is
relatively illiquid.
. The Common Stock is registered under the 1934 Act. As a result, First
Palmetto is subject to the periodic reporting and proxy solicitation
requirements of the Securities and Exchange Commission ("SEC") under
the 1934 Act. The out-of-pocket and internal costs to First Palmetto
associated with the preparation and filing of such reports when
compared to the limited number of stockholders and relatively illiquid
market for the Common Stock is, in the opinion of the Board of
Directors, unwarranted. First Palmetto estimates that, upon
termination of its obligation to file such reports with the SEC, it
will achieve savings of approximately $50,000 annually.
Recommendation of Board of Directors; Fairness of Reverse Stock Split Proposal
The Board believes that the Reverse Stock Split Proposal, taken as a whole,
is fair to, and in the best interests of First Palmetto and its stockholders,
including those who will receive Preferred Stock in exchange for their Common
Stock, those who will receive shares of new Common Stock and those who will
receive both Preferred Stock and new Common Stock. The Board also believes that
the process by which the Transaction is to be approved is fair. The Board
unanimously approved the Reverse Stock Split Proposal. The Board recommends that
the stockholders vote for approval and adoption of the Reverse Stock Split
Proposal. Each member of the Board and each executive officer of First Palmetto
who owns shares of Common Stock has advised First Palmetto that he intends to
vote his shares in favor of the Reverse Stock Split Proposal.
The Board has retained for itself the absolute authority to reject (and not
implement) the Reverse Stock Split Proposal (even after approval thereof) if it
determines subsequently that the Reverse Stock Split Proposal is not then in the
best interests of First Palmetto and its stockholders.
First Palmetto did not obtain an independent fairness opinion in connection
with the proposed Reverse Stock Split Proposal. However, the Board considered a
number of factors in determining whether it was in the best interests of First
Palmetto and its stockholders to undertake the Transaction and reduce the number
of stockholders to fewer than 300 persons in order to terminate the registration
of its Common Stock under the 1934 Act. The Board of Directors reviewed and
discussed with management of First Palmetto materials which had been prepared by
management and distributed to the Board relating to cost savings to be achieved
by terminating the registration of the Common Stock. The Board of Directors
determined that cost savings of approximately $50,000 per year could be achieved
if First Palmetto terminated the registration. The Board of Directors also
considered the time and effort currently required of management to comply with
the reporting and other requirements associated with continued registration of
the Common Stock under the 1934 Act. The Board of Directors considered the
effect that terminating the registration of the Common Stock might have on the
market for the Common Stock and the ability of stockholders to buy and sell
shares. The Board of Directors determined that the cost savings, reduced burden
on management and increased confidentiality of proprietary information to be
achieved by terminating registration of the Common Stock under the 1934 Act
outweighed any potential detriment from termination of registration.
The Board of Directors considered an independent analysis and evaluation of
the estimated fair market value of the Preferred Stock to be issued to
stockholders holding fewer than 125 shares of Common Stock of record in any one
account. See "-- Evaluation of RP Financial."
The Board of Directors considered several alternative transactions,
including an issuer tender offer and open market purchases, to accomplish the
reduction in the number of stockholders to fewer than 300 persons, but
ultimately determined the Reverse Stock Split Proposal was the preferred method.
The Transaction is not structured so that approval of at least a majority
of unaffiliated stockholders is required. No independent committee of the Board
of Directors has reviewed the fairness of the Reverse Stock Split Proposal. No
unaffiliated representative acting solely on behalf of the stockholders for the
purpose of negotiating the terms of the Reverse Stock Split Proposal or
preparing a report covering the fairness of the Reverse Stock Split Proposal was
retained by First Palmetto or by a majority of directors who are not employees
of First Palmetto. The Board of Directors believes that the Transaction is
substantively fair to all unaffiliated stockholders notwithstanding
10
<PAGE>
the absence of such a committee or representative for the following reasons: all
current stockholders will retain an ownership interest in First Palmetto;
stockholders who receive shares of Preferred Stock will acquire a security which
the Evaluation has determined to be substantially equivalent in value to their
Common Stock interests, will have dividend rights equivalent to those of the
Common Stock, will have liquidation rights in preference to holders of new
Common Stock, will be redeemable by First Palmetto in two years at a redemption
price which is the greater of the current fair market value of the Preferred
Stock as determined by the Board of Directors or 115% of a current appraisal of
such value, in the event of a negotiated acquisition of First Palmetto will be
valued by the Board on a basis equivalent to the Common Stock, and prior to
certain transfers may be repurchased by First Palmetto at a price which is the
greater of the current fair market value of the Preferred Stock as determined by
the Board of Directors or 115% of a current appraisal of such value.
The Board believes that the Transaction is procedurally fair because the
reverse stock split is being effected in accordance with Delaware law and hence
will require the affirmative vote of the holders of a majority of First
Palmetto's outstanding Common Stock; First Palmetto's officers and directors as
a group do not own of record or beneficially a sufficient number of shares to
assure approval of the Reverse Stock Split Proposal; between the date hereof and
the Effective Date (defined below) of the reverse stock split, all stockholders
of First Palmetto will have an opportunity to adjust the number of shares of
Common Stock owned by them so that holders who would otherwise be converted to
only Preferred Stock can become continuing holders of new Common Stock, and
continuing holders can so divide or otherwise adjust their existing holdings as
to become Preferred holders as to some or all of their shares. After
consideration of all the facts, all of the directors, including those who are
not employees of First Palmetto, have determined that the Reverse Stock Split
Proposal is fair to unaffiliated stockholders. In its determination, the Board
of Directors considered all factors equally, and did not assign weights to any
factors.
Evaluation of RP Financial
The Board of Directors of First Palmetto has retained RP Financial, LC ("RP
Financial") as its financial advisor in connection with the Reverse Stock Split
Proposal and requested RP Financial to provide an independent analysis and
evaluation (the "Evaluation") of the estimated fair market value of the
Preferred Stock to be issued to holders of fewer than 125 shares of Common
Stock. In requesting the Evaluation, the Board of Directors did not give any
special instructions to or impose any limitations upon the scope of the
investigation which RP Financial might wish to conduct to enable it to give its
opinion. RP Financial has delivered the Evaluation to First Palmetto to the
effect that:
. as of December 17, 1999, the estimated value of the Common Stock was
$75.00 per share; and
. the fair market value of the Preferred Stock is substantially
equivalent to $75.00 per share.
RP Financial. RP Financial, Arlington, Virginia, is a financial consulting
firm that, among other things, specializes in the fair market valuation of the
equity and debt securities issued by financial institutions and their subsidiary
companies. RP Financial has been approved as a qualified financial institution
appraisal firm by the Office of Thrift Supervision, the Federal Deposit
Insurance Corporation, and numerous state banking agencies. The principals and
staff of RP Financial have served as fair market appraisers and consultants for
over 500 financial institutions pursuant to initial and secondary offerings
(including rights offerings), business combinations, mutual-to-stock
conversions, mutual holding company formations, employee stock ownership plans
and stock option plans, audited financial statement disclosure and other
purposes. Neither RP Financial nor its employees have any present or
contemplated future interest in the stock of First Palmetto or its principals or
any other interest that might tend to prevent RP Financial from making a fair
and unbiased appraisal.
Valuation of Common Stock. A fair market valuation of the Common Stock was
made by RP Financial in reliance upon information contained herein, First
Palmetto's audited financial statements for the fiscal years ended September 30,
1995 through September 30, 1999, and First Palmetto's internal and regulatory
data for the period covering September 30, 1995 through September 30, 1999. RP
Financial also considered the following factors, among others:
11
<PAGE>
. the present operating results and financial condition of First
Palmetto, and the economic and demographic conditions in First
Palmetto's existing market area;
. historical, financial and other information relating to First
Palmetto;
. a comparative evaluation of the operating and financial statistics of
First Palmetto with those of other similarly situated publicly-traded
thrift institutions;
. the current dividend policy of First Palmetto;
. the pro forma impact of the proposed reverse 1-for-125 stock split;
and
. the trading market for securities of comparable institutions and
general conditions in the market for such securities.
RP Financial's valuation approach focused on first deriving a value for the
Common Stock on a comparable publicly-traded basis, and then applied a discount
to the comparable public value to account for the closely held nature of the
Common Stock and the lack of marketability resulting from the illiquid
characteristics of the Common Stock. To derive the publicly-traded equivalent
value for the Common Stock, RP Financial applied market value approaches --
specifically price-to-earnings (P/E) and price-to-tangible book value (P/TB) --
and the discounted earnings approach. The applications of the market value
approaches were based on the pricing multiples of a selected group of comparable
publicly-traded institutions (the "Peer Group"), taking into account RP
Financial's comparative analysis of First Palmetto relative to the Peer Group.
1. Price-to-Earnings. The application of the P/E valuation method
-----------------
calculated the Common Stock market value by applying a valuation P/E multiple,
derived from the Peer Group's core P/E multiple as of December 17, 1999, times
First Palmetto's recurring or core earnings for the 12 months ended September
30, 1999.
2. Price-to-Book. The application of the P/TB valuation method
-------------
calculated the Common Stock market value by applying a valuation P/TB ratio,
derived from the Peer Group's P/TB ratio as of December 17, 1999, to the Bank's
tangible book value as of September 30, 1999.
3. Discounted Earnings. The discounted earnings approach calculated the
-------------------
Common Stock market value through applying a discount rate to First Palmetto's
core or recurring earnings for the twelve months ended September 30, 1999.
On the basis of the foregoing, RP Financial has advised First Palmetto
that, in its Fair Market Valuation dated December 17, 1999, the value of the
Common Stock, without give effect to the proposed reverse stock split, was
$75.00 per share.
Analysis and Evaluation of Preferred Stock. In reaching its conclusion
that the fair market value of the Preferred Stock and Common Stock were
substantially equivalent, RP Financial took into consideration the comparative
rights of the Preferred Stock and the Common Stock.
. RP Financial considered the loss of voting rights by the holders of
the Preferred Stock and the ability of First Palmetto to redeem the
Preferred Stock at its option, both of which were considered to be
negative valuation considerations for the Preferred Stock relative to
the Common Stock. It is RP Financial's view that the negative
valuation considerations associated with the loss of voting rights and
the redemption feature were offset by other positive valuation
considerations associated with the Preferred Stock, which included the
dividend preference and liquidation preference for the Preferred
Stock, the probability of a more liquid trading market for the
Preferred Stock and the premium price to be received by the holders of
the Preferred Stock in the event of a redemption.
. RP Financial anticipates that the Preferred Stock will have a more
liquid trading market relative to the Common Stock, since the 1-for-
125 reverse stock split of the Common Stock will result in fewer
shares of Common Stock outstanding in comparison to the number of
shares of Preferred Stock that
12
<PAGE>
will be outstanding. Additionally, the reverse stock split adjusted
price of the Common Stock will be significantly higher than the price
of the Preferred Stock, which RP Financial also believes will result
in a relatively more liquid trading market for the Preferred Stock.
. If the Preferred Stock is redeemed by First Palmetto, the redemption
price will be the greater of the current fair market value of the
Preferred Stock as determined by the Board of Directors or 115% of a
current independent appraisal of such value. The premium associated
with the redemption price is believed by RP Financial to adequately
compensate the holders of the Preferred Stock at the time of
redemption for foregoing potential increases in value. RP Financial's
conclusion in this regard considered historical control premium data
for thrift acquisitions announced in 1998 and 1999, which indicate
that the average control premium paid for such acquisitions equaled
24.0% and 38.7%, respectively, based on the closing stock prices of
the acquired institutions one day prior to the announcement date of
their acquisition. RP Financial concluded that the 15% premium upon
redemption reasonably reflects the uncertainty of future events, yet
still compensates the holders of Preferred Stock adequately for
foregoing potential increases in value, given that there is no
certainty as to the timing or probability that a negotiated
acquisition of First Palmetto would be completed following the
redemption.
. RP Financial noted that, overall, the Preferred Stock has the same
dividend and price under a merger as the Common Stock. RP Financial
determined that the downward valuation adjustment relative to the
Common Stock for lack of voting rights and redemption provision are
substantially and equally offset by the Preferred Stock's dividend
preference, liquidation preference, anticipated greater liquidity and
premium in redemption. These factors were all considered in RP
Financial's conclusion that the Preferred Stock has a fair market
value substantially equivalent to the Common Stock.
A copy of the Evaluation is set forth as Appendix B to this Proxy Statement
---------------------------------------------------------------------------
and should be read in its entirety by First Palmetto stockholders.
- -----------------------------------------------------------------
Conduct of First Palmetto's Business after Reverse Stock Split
First Palmetto expects its business and operations to continue as they are
currently being conducted and, except as disclosed below, the reverse stock
split is not anticipated to have any effect upon the conduct of its business.
If the Reverse Stock Split Proposal is effected, First Palmetto believes
that, based on First Palmetto's stockholder records, fewer than 300 stockholders
of record of new Common Stock will remain. In addition, individuals who are
members of the Board of Directors and executive officers of First Palmetto now
owning approximately 37% of the Common Stock will own approximately 39% of the
new Common Stock after the Reverse Stock Split. See "Stock Ownership of
Management."
First Palmetto plans, as a result of the reverse stock split, to become a
privately held company. The registration of the Common Stock under the 1934 Act
will be terminated. In addition, because the new Common Stock will no longer be
publicly held, First Palmetto will be relieved of the obligation to comply with
the proxy rules of Regulation 14A under Section 14 of the 1934 Act, and its
officers and directors and stockholders owning more than 10% of the Common Stock
will be relieved of certain obligations under the 1934 Act. First Palmetto
estimates that termination of the registration of the Common Stock under the
1934 Act will save First Palmetto approximately $50,000 per year in legal,
accounting and other expenses.
Other than as described in this Proxy Statement, neither First Palmetto nor
its management has any current plans or proposals to effect any extraordinary
corporate transaction, such as a merger, reorganization or liquidation; to sell
or transfer any material amount of its assets; to change its Board of Directors
or management; to change materially its indebtedness or capitalization; or
otherwise to effect any material change in its corporate structure or business.
13
<PAGE>
Structure of Reverse Stock Split
The reverse stock split is of the Common Stock. If the Reverse Stock Split
Proposal is approved and occurs, the reverse stock split will occur on the
Effective Date. Assuming stockholder approval of the Reverse Stock Split
Proposal is obtained, First Palmetto plans to file the Certificate of Amendment
at a time to be determined by the officers of First Palmetto, but in any event
not later than ______________. The Board, however, has retained for itself the
absolute authority to reject (and not implement) the Reverse Stock Split
Proposal (even after approval thereof), if it subsequently determines that the
Reverse Stock Split Proposal is not then in the best interests of First Palmetto
and its stockholders. All registered stockholders on the Effective Date will
receive 1 share of new Common Stock for every 125 shares of Common Stock held in
record accounts at that time. Any registered stockholder who holds fewer than
125 shares of Common Stock in a record account will receive one share of
Preferred Stock for each share of Common Stock.
Purpose of Reverse Stock Split
The purpose of the Reverse Stock Split Proposal is to reduce the number of
stockholders of record of Common Stock to fewer than 300 persons in order to
relieve First Palmetto of the administrative burden and cost and competitive
disadvantages associated with filing reports and otherwise complying with the
requirements of registration under the 1934 Act, by deregistering its Common
Stock under the 1934 Act. If the Reverse Stock Split is implemented, holders of
more than 125 shares will benefit by an increase in their percentage ownership
of the Common Stock.
The Transaction will provide those registered stockholders with fewer than
125 shares with the opportunity to maintain an equity interest in First Palmetto
through the ownership of Preferred Stock. Moreover, First Palmetto will benefit
from substantial cost savings as a result of the Reverse Stock Split Proposal.
The Board believes that the disadvantages of having First Palmetto continue
to be a 1934 Act registrant outweigh any advantages. The Board has no present
intention to raise capital through sales of securities in a public offering in
the future or to acquire other business entities using stock as the
consideration for any such acquisition. Accordingly, First Palmetto is not
likely to make use of any advantage (for raising capital, effecting acquisitions
or other purposes) that First Palmetto's status as a reporting company may
offer.
First Palmetto incurs direct and indirect costs associated with compliance
with the SEC's filing and reporting requirements imposed on public companies.
First Palmetto also incurs substantial indirect costs as a result of, among
other things, the executive time expended to prepare and review such filings.
Since First Palmetto has relatively few executive personnel, these indirect
costs can be substantial. Based on its experience in prior years, First
Palmetto's direct costs, which include the fees and expenses of independent
auditors, SEC legal counsel, printing, mailing, and SEC filing fees are
estimated to approximate $50,000 annually.
Estimates of the annual savings to be realized if the Reverse Stock Split
Proposal is approved and implemented are based upon actual costs to First
Palmetto of the services and disbursements in each of the above categories that
were reflected in its recent historical financial statements. The costs of the
services and disbursements in each category for the fiscal years ended September
30, 1999 and 1998, respectively, were as follows: independent auditors and other
accountants - $104,000 and $79,000; SEC legal counsel - $9,000 and $4,400; and
miscellaneous costs - $6,400 and $6,400. Management's estimates are based on
information provided or upon verifiable assumptions. For example, its auditors
have informed First Palmetto, informally, that there will be a reduction in
auditing fees if First Palmetto ceases to be public, and it is clear that no SEC
legal counsel will be needed if First Palmetto no longer reports to the SEC.
Other estimates are more subjective, e.g. the lower printing and mailing costs
attributable to such reduction and the less complicated disclosure required by
First Palmetto's private status; the lower risk of liability that attends
private (as distinguished from public) company status expected to result; and
the reduction in direct miscellaneous clerical and other expenses (e.g., the
word processing, edgarizing, telephone and fax charges associated with SEC
filings) and elimination of the charges of brokers and banks in forwarding
materials to beneficial holders.
14
<PAGE>
The estimates set forth above are just that--estimates; the actual savings
to be realized may be higher or lower than such estimates. It is expected that a
portion of the estimated savings will be realized in the current fiscal year
ending September 30, 2000.
In light of First Palmetto's size and resources, the Board does not believe
such direct and indirect costs are justified.
Management conducted an analysis of the options, risks and expenses
relating to remaining a public company, including the continued illiquidity of
the Common Stock.
In making this analysis, management considered the following alternative
strategies:
. A cash tender offer, but the Board believed it would not result in
shares being tendered by a sufficient number of record stockholders so
as to accomplish the going private objective and reducing recurring
costs. It was thought unlikely that many holders of small numbers of
shares would make the effort to tender their shares; and
. A purchase of shares in the open market. There is no established
trading market for the Common Stock; therefore, it would be highly
unlikely that shares could be acquired by First Palmetto from a
sufficient number of holders to accomplish the Board's objectives.
The Board has determined that the Reverse Stock Split Proposal is the most
expeditious and economical way of changing First Palmetto's status from that of
a reporting company to that of a more closely held, non-reporting company. The
Board has determined the reverse split ratio to be 1-for-125.
The Board also believes that it is in the best interests of First Palmetto
and the Bank to exchange shares of Preferred Stock for shares of Common Stock
which will not be converted into shares of new Common Stock.
. The issuance of Preferred Stock in lieu of the payment of cash for
such Common Stock interests allows First Palmetto and the Bank to
retain capital for other corporate purposes.
. Many holders of Common Stock are customers of the Bank who appreciate
an ongoing equity interest in First Palmetto.
. Based on the Evaluation, the issuance of Preferred Stock in exchange
for fractional Common Stock interests should be tax free. See "--
Material Federal Income Tax Consequences".
The reverse stock split is structured to be a "going private" transaction
as defined in Rule 13e-3 promulgated under the 1934 Act because it is intended
to, and, if completed, will likely terminate First Palmetto's reporting
requirements under the 1934 Act. In connection with the Reverse Stock Split
Proposal, First Palmetto has filed with the SEC a Schedule 13E-3 pursuant to
Rule 13e-3 under the 1934 Act.
The Reverse Stock Split Proposal, if approved, will have divergent effects
depending on whether you hold more, or fewer, than 125 shares of Common Stock in
a record account immediately prior to the reverse stock split.
Effect of Reverse Stock Split Proposal on First Palmetto Stockholders
Registered Stockholders with Fewer Than 125 Shares. If the Reverse Stock
Split Proposal is implemented and you are a stockholder holding fewer than 125
shares of Common Stock in a record account immediately prior to the reverse
stock split:
. You will not receive a fractional share of new Common Stock as a
result of the reverse split.
. You will receive one share of Preferred Stock for each share of Common
Stock.
15
<PAGE>
. After the reverse split, you will have no further interest in the new
Common Stock, and as a holder of Preferred Stock, you will no longer
be entitled to vote, except as required by Delaware law. You will be
entitled to receive dividends, if and when declared. No dividend may
be paid on the new Common Stock unless an equivalent dividend is paid
concurrently on the Preferred Stock. See "-- Description of Preferred
Stock."
. You will not have to pay any service charges or brokerage commissions
in connection with the reverse stock split.
. As soon as practicable after the Effective Date, you will receive
Preferred Stock for the Common Stock you held in your record account
immediately prior to the reverse split in accordance with the
procedures described below.
. If you hold stock certificate(s) representing your shares, you
will receive a transmittal letter from First Palmetto as soon as
practicable after the Effective Date. The letter of transmittal
will contain instructions on how to surrender your existing
Common Stock certificate(s) for your Preferred Stock. You will
not receive your Preferred Stock until you surrender your
outstanding certificate(s) in accordance with the letter of
transmittal. Please do not send your certificates until you
----------------------------------------------
receive your letter of transmittal.
----------------------------------
Registered Stockholders With 125 or More Shares. If you are a registered
stockholder with 125 or more shares of Common Stock in your record account as of
the Effective Date, we will convert your shares into one-one hundred and twenty-
fifth (1/125) of the number of shares you held immediately prior to the reverse
split. For example, if you are a registered owner of 1,250 shares of Common
Stock immediately prior to the reverse split, your shares will be converted to
10 shares of new Common Stock in the reverse split.
Beneficial Owners of First Palmetto Stock. Nominees (such as a bank or
broker) may have required procedures, and stockholders holding Common Stock in
street name should contact their nominees to determine how they will be affected
by the reverse stock split.
NOTE: If you are a beneficial owner of fewer than 125 shares of Common Stock
and want to have your shares exchanged for Preferred Stock in the reverse stock
split, you should instruct your nominee to transfer your shares into a record
account in your name in a timely manner so that you will be considered a holder
of record immediately prior to the reverse split.
Financial Effect of Reverse Stock Split
The reverse stock split and the expenditure of approximately $50,000 for
professional fees and other expenses related to the Transaction are not expected
to have any material adverse effect on First Palmetto's capitalization,
liquidity, results of operations or cash flow.
The following pro forma financial information presents the effect on First
Palmetto's capitalization of the reverse stock split. The unaudited pro forma
data reflect the Transaction as if it occurred on September 30, 1999. The
unaudited pro forma data is not necessarily indicative of what First Palmetto's
financial position would have been if the reverse stock split had been effected
on the date indicated, or will be in the future.
The unaudited pro forma data should be read in conjunction with the
historical financial statements and accompanying footnotes of First Palmetto.
16
<PAGE>
<TABLE>
<CAPTION>
September 30, 1999
----------------------------------------------------------------
Reverse Stock
As Reported Split Pro Forma
----------- ------------- ---------
(In thousands, except share and per share data)
<S> <C> <C> <C>
LIABILITIES
- -----------
Deposits............................................... $361,764 $ -- $ 361,764
FHLB advance........................................... 83,000 -- 83,000
Accrued expenses and other liabilities................. 2,756 -- 2,756
-------- -------------------- ---------
Total liabilities............................. 447,520 -- 447,520
-------- -------------------- ---------
STOCKHOLDERS' EQUITY
- --------------------
Preferred stock, at par................................ -- -- --
Common stock, at par................................... 8 -- 8
Additional paid-in capital............................. 6,979 -- 6,979
Retained earnings, substantially restricted............ 21,869 -- 21,869
Treasury stock, at cost................................ (625) -- (625)
Total stockholders' equity................... 28,321 -- 28,321
-------- -------------------- ---------
TOTAL.................................................. $475,521 $ -- $ 475,521
======== ==================== =========
Number of preferred shares outstanding................. -- -- 34,135
Book value per preferred share......................... -- -- $ 39.65
Number of common shares outstanding.................... 712,010 -- 5,423
Book value per common share............................ $ 39.65 -- $4,956.25
Capital ratios:
Tier 1 capital (to total assets)................... 5.68% -- 5.68%
Tier 1 capital (to risk-weighted assets)........... 9.20% -- 9.20%
Total capital (to risk-weighted assets)............ 10.46% -- 10.46%
</TABLE>
Conversion to Preferred Stock
In order to reduce the number of holders of record of Common Stock to below
300, First Palmetto will issue Preferred Stock for shares owned by registered
stockholders who would hold less than one share in a record account after the
reverse stock split. If stockholders approve the Reverse Stock Split Proposal at
the Annual Meeting and the reverse stock split is completed, First Palmetto will
issue shares of Preferred Stock for such Common Stock on a one-for-one basis.
Under the Charter, the First Palmetto Board of Directors is authorized to
issue up to 500,000 shares of serial preferred stock and to fix the powers,
designations, preferences and relative, participating, optional or other special
rights of such shares and the qualifications, limitations and restrictions
thereof. The serial preferred stock may rank prior to the Common Stock as to
dividend rights, liquidation preferences or both and may have full or limited
voting rights.
If the Reverse Stock Split Proposal is approved at the Annual Meeting, the
Board will issue shares of Preferred Stock with the following rights to holders
of fractional share interests:
1. The Preferred Stock will be nonvoting, except as required by Delaware
law.
2. The Preferred Stock will be entitled to receive dividends. No dividend
may be paid on the new Common Stock unless an equivalent dividend is paid
concurrently on the Preferred Stock. Unless otherwise determined by the Board,
an equivalent dividend will be based on the 1-for-125 reverse stock split ratio.
For example, if the Board declares and pays a dividend of $1.00 per share of
Preferred Stock, an equivalent new Common Stock dividend would be $125.00 per
share.
17
<PAGE>
3. In the unlikely event of a liquidation, the Preferred Stock would have
a preference over the Common Stock.
4. The Preferred Stock will be redeemable by First Palmetto at the option
of First Palmetto, following a two-year period subsequent to the Effective Date.
The redemption price will be the greater of the current fair market value of the
Preferred Stock as determined by the Board of Directors or 115% of a current
independent appraisal of such value. First Palmetto expects to obtain such an
appraisal on an annual basis.
5. In the event of a negotiated acquisition of First Palmetto, the
Preferred Stock will be valued by the Board on the same basis as the Common
Stock, subject to the 1-for-125 reverse stock split ratio.
6. Prior to any transfer of the Preferred Stock which would result in a
greater number of registered holders thereof, First Palmetto will have a right
of first refusal to purchase such shares at the greater of the current fair
market value of the Preferred Stock as determined by the Board of Directors or
the most recent appraisal of such value. First Palmetto expects to obtain such
an appraisal on an annual basis.
Termination of 1934 Act Registration of Common Stock
The Reverse Stock Split Proposal will affect the public registration of the
Common Stock with the SEC under the 1934 Act, as the First Palmetto intends to
apply for such termination as soon as practicable after approval by
stockholders.
The Common Stock is currently registered under the 1934 Act. Such
registration may be terminated by First Palmetto if the Common Stock is no
longer held by 300 or more stockholders of record. Termination of registration
of the Common Stock under the 1934 Act would substantially reduce the
information required to be furnished by First Palmetto to its stockholders and
to the SEC and would make certain provisions of the 1934 Act, such as the short-
swing profit recovery provisions of Section 16(b) of the 1934 Act, proxy
statement disclosure in connection with stockholders meetings and the related
requirement of an annual report to stockholders, no longer applicable to First
Palmetto. Accordingly, for a total expenditure by First Palmetto of
approximately $25,000, First Palmetto estimates it will eliminate costs and
expenses associated with continuance of the 1934 Act registration, which First
Palmetto estimates approximately $50,000 on an annual basis.
One related benefit from the termination of registration of the Common
Stock under the 1934 Act will be the retention of certain proprietary
information of First Palmetto. First Palmetto's 1934 Act filings can be readily
analyzed by First Palmetto's competitors.
With respect to the executive officers and directors of First Palmetto, in
the event the registration of the Common Stock is terminated under the 1934 Act:
(a) executive officers, directors and other affiliates would no longer be
subject to many of the reporting requirements and restrictions of the 1934 Act,
including without limitation the reporting and short-swing profit provisions of
Section 16, and (b) executive officers, directors and other affiliates of First
Palmetto may be deprived of the ability to dispose of shares of Common Stock
pursuant to Rule 144 under the Securities Act of 1933 (the "1933 Act").
Upon termination of 1934 Act registration, First Palmetto will continue to
be subject to the general anti - fraud provisions of federal and applicable
state securities laws.
Consequences Under Federal Securities Laws
First Palmetto has not filed with the SEC a registration statement under
the 1933 Act for the registration of the new Common Stock and the Preferred
Stock to be issued and exchanged pursuant to the Reverse Stock Split Proposal.
Instead, the new Common Stock and the Preferred Stock will be issued in reliance
on exemptions contained in Section 3(a)(9) and Rule 145(a)(1) under the 1933
Act. Shares of new Common Stock and Preferred Stock received by First Palmetto
stockholders upon consummation of the reverse stock split are expected to be
freely transferable under the 1933 Act by those stockholders of First Palmetto
not deemed to be "affiliates" of First Palmetto. Shares of new Common Stock and
Preferred Stock acquired by persons who are "affiliates" of First Palmetto will
be subject to the resale restrictions of Rule 144 under the 1933 Act. Affiliates
are generally defined as
18
<PAGE>
persons who control, are controlled by, or are under common control with First
Palmetto at the time of the Annual Meeting (generally executive officers and
directors).
Under paragraph (e) of Rule 144, each affiliate of First Palmetto, together
with any other person whose sales are required to be aggregated with those of
the affiliate under Rule 144, would be able to sell in the public market,
without registration, a number of shares not to exceed, in any three-month
period, the greater of (i) 1% of the outstanding shares or (ii) the average
weekly trading volume in such shares during the preceding four calendar weeks.
Pursuant to paragraph (f) of Rule 144, the shares are required to be sold in
"brokers' transactions," as defined in paragraph (g) of Rule 144, or in
transactions directly with a "market maker," as defined in Section 3(a)(38) of
the 1934 Act, as well as comply with certain other manner of sale requirements
set forth in paragraph (f). Pursuant to paragraph (c) of Rule 144, the ability
of affiliates to resell shares of stock received in the reverse stock split
under Rule 144 will be subject to First Palmetto's having satisfied certain 1934
Act reporting requirements for specified periods prior to the time of sale.
However, if the Reserve Stock Split Proposal is approved, First Palmetto will
terminate the Common Stock's 1934 Act registration as soon as practicable
thereafter and will not register the Preferred Stock under the 1934 Act.
Therefore, the ability of affiliates to dispose of shares pursuant to Rule 144
may be deprived. See "-- Termination of 1934 Act Registration of Common Stock."
Affiliates also would be permitted to resell the stock received in reverse stock
split pursuant to an effective registration statement under the 1933 Act or an
available exemption from the 1933 Act registration requirements.
Effect on Market for Shares
First Palmetto's Charter currently authorizes the issuance of 1,500,000
shares of Common Stock and 500,000 shares of serial preferred stock. The
Reverse Stock Split Proposal, if approved and effected, will reduce
significantly the number of holders of Common Stock and the number of
outstanding shares of Common Stock. First Palmetto believes that completion of
the Reverse Stock Split and deregistration of the Common Stock under the 1934
Act will cause the public market for shares of new Common Stock to be
eliminated.
First Palmetto has no current plans to issue additional shares of stock,
but First Palmetto reserves the right to do so at any time and from time to time
at such prices and on such terms as the Board of Directors determines to be in
the best interests of First Palmetto and its then stockholders. Persons who
continue as stockholders following implementation of the Reverse Stock Split
Proposal will not have any preemptive or other preferential rights to purchase
any of First Palmetto's stock that may be issued by First Palmetto in the
future, unless such rights are specifically granted to the stockholders.
Potential Detriments of Reverse Stock Split Proposal to Stockholders; Accretion
in Ownership and Control of Certain Stockholders
Potential detriments to stockholders who remain as holders of new Common
Stock and Preferred Stock if the reverse stock split is effected include
decreased access to information and decreased liquidity. If the Reverse Stock
Split Proposal is effected, First Palmetto intends to terminate the registration
of its Common Stock under the 1934 Act. As a result of such termination, First
Palmetto will no longer be subject to the periodic reporting requirements and
the proxy rules of the 1934 Act. The liquidity and market value of the shares of
Common Stock held by unaffiliated stockholders may be adversely affected by the
reverse stock split and by termination of the registration of the Common Stock
under the 1934 Act.
The Board of Directors did not retain either an investment bank or other
financial adviser to render a report or opinion with respect to the fairness of
the Reverse Stock Split Proposal to First Palmetto or its stockholders or an
unaffiliated representative to represent the unaffiliated stockholders of First
Palmetto in negotiating the terms of the Reverse Stock Split Proposal. The
Board of Directors considered the Evaluation relating to the value of the
Preferred Stock to be issued to stockholders holding fewer than 125 shares of
Common Stock in any one record account. See "-- Evaluation of RP Financial."
19
<PAGE>
Stock Certificates
If First Palmetto's stockholders approve the Reverse Stock Split Proposal,
it is the present intention of First Palmetto to file a Certificate of Amendment
to its Restated Certificate of Incorporation with the Secretary of State of the
State of Delaware. The Reverse Stock Split Proposal will become effective on
the date of that filing. Assuming stockholder approval of the Proposal is
obtained, First Palmetto plans to file the Certificate of Amendment at a time to
be determined by the officers of First Palmetto, expected to be as promptly as
possible, but in any event not later than ____________. First Palmetto Savings
Bank has been appointed exchange agent (the "Transfer Agent") to carry out the
exchange of certificates for new Common Stock and/or Preferred Stock.
On the Effective Date, each 125 shares of Common Stock will automatically
be combined and changed into one share of new Common Stock, and shares of
Preferred Stock will be issued in exchange for Common Stock interests of less
than 125 shares. No additional action on the part of First Palmetto or any
stockholder will be required in order to effect the reverse stock split.
Stockholders of record will be requested to exchange their certificates
representing shares of Common Stock held prior to the reverse stock split for
certificates representing shares of new Common Stock and Preferred Stock issued
as a result of the reverse stock split. Such stockholders will be furnished the
necessary materials and instructions to effect such exchange promptly following
the Effective Date. Certificates representing shares of Common Stock
subsequently presented for transfer will not be transferred on the books and
records of First Palmetto until the certificates representing the shares of
Common Stock have been exchanged for certificates representing shares of new
Common Stock and Preferred Stock. Stockholders should not submit any
----------------------------------
certificates until requested to do so. In the event any certificate
- -------------------------------------
representing shares of Common Stock is not presented for exchange upon request
by the Company, any dividends that may be declared after the Effective Date with
respect to the new Common Stock or Preferred Stock represented by such
certificate will be withheld by First Palmetto until such certificate has been
properly presented for exchange, at which time all such withheld dividends which
have not yet been paid to the public official pursuant to relevant abandoned
property laws will be paid to the holder thereof or his designee, without
interest.
As described above, stockholders with share certificates will receive a
letter of transmittal after the reverse stock split is completed. These
stockholders must complete and sign the letter of transmittal and return it with
their stock certificate(s) to the Transfer Agent before they can receive new
Common Stock and/or Preferred Stock for those shares.
No service charges will be payable by stockholders in connection with the
exchange of certificates or the issuance of new Common Stock and Preferred
Stock, all expenses of which will be borne by First Palmetto.
Material Federal Income Tax Consequences
We summarize below the material federal income tax consequences to First
Palmetto and stockholders resulting from the Reverse Stock Split Proposal. This
summary is based on existing U.S. federal income tax law, which may change, even
retroactively. This summary is not binding on the IRS. There can be no assurance
and none is given that the IRS or the courts will not adopt a position that is
contrary to the statements contained in this summary. This summary does not
discuss all aspects of federal income taxation which may be important to you in
light of your individual circumstances. Many stockholders may be subject to
special tax rules. In addition, this summary does not discuss any state, local,
foreign, or other tax considerations.
This summary assumes that you are a one of the following: (1) a citizen or
resident of the United States; (2) a corporation or other entity taxable as a
corporation created or organized under U.S. law (federal or state); (3) an
estate the income of which is subject to U.S. federal income taxation regardless
of its sources; (4) a trust if a U.S. court is able to exercise primary
supervision over administration of the trust and one or more U.S. persons have
authority to control all substantial decisions of the trust; or (5) any other
person whose worldwide income and gain is otherwise subject to U.S. federal
income taxation on a net basis. This summary also assumes that you have held and
will continue to hold your shares as capital assets for investment purposes
under the Internal Revenue Code of 1986, as amended.
You should consult your tax advisor as to the particular federal, state,
------------------------------------------------------------------------
local, foreign, and other tax consequences, in light of your specific
- ---------------------------------------------------------------------
circumstances.
- --------------
20
<PAGE>
We believe that the Reverse Stock Split Proposal should be treated as a
tax-free "recapitalization" for federal income tax purposes. This should result
in no material federal income tax consequences to First Palmetto.
If you continue to hold new Common Stock after the reverse stock split, you
should not recognize any gain or loss in the reverse stock split, and you should
have the same adjusted tax basis and holding period in your new Common Stock as
you had in the Common Stock immediately prior to the reverse stock split.
If you receive Preferred Stock in the reverse stock split, and based on the
Evaluation as to the value of the Preferred Stock in relation to the Common
Stock fractional interests, you should not recognize any gain or loss in the
reverse stock split, and you should have the same adjusted tax basis and holding
period in the Preferred Stock as you had in the Common Stock immediately prior
to the reverse stock split. See "-- Evaluation of RP Financial." If you receive
both new Common Stock and Preferred Stock in the reverse stock split, then the
adjusted tax basis you had in the Common Stock immediately prior to the reverse
stock split should be allocated between the new Common Stock and Preferred Stock
in proportion to their respective fair market values, which should reflect the
1-to-125 reverse stock split ratio.
If you receive both new Common Stock and Preferred Stock, then the
Preferred Stock you receive may constitute "Section 306" stock. In general, IRS
rulings have stated that stock that is redeemable by the issuing corporation for
a fixed price can be Section 306 stock. We will have the right to redeem the
Preferred Stock for the greater of the fair market value of the Preferred Stock
as determined by the Board of Directors or 115% of an independent appraisal of
the fair market value of the Preferred Stock. Because the redemption price of
the Preferred Stock is based on fair market value rather than a fixed price, we
believe that the Preferred Stock should not be classified as Section 306 stock.
The IRS and the courts, however, are not bound by our conclusion and may
disagree with us.
If we exercise our right to redeem the Preferred Stock and the Preferred
Stock is Section 306 stock, then to the extent you recognize gain or loss on the
redemption, such gain or loss will be ordinary rather than capital. If you sell
or otherwise dispose of your Preferred Stock and the Preferred Stock is Section
306 stock, then to the extent you realize gain on the disposition, such gain
will be ordinary rather than capital, and to the extent you realize loss on the
disposition, such loss will not be recognized. You are strongly urged to consult
with your tax advisor as to the federal tax consequences of holding Section 306
stock.
Appraisal Rights
No appraisal rights are available under the Delaware General Corporation
Law or under the Charter or Bylaws of First Palmetto to any stockholder who
dissents from the proposal to approve the Reverse Stock Split Proposal. There
may exist other rights or actions under state law for stockholders who are
aggrieved by reverse stock splits generally. Although the nature and extent of
such rights or actions are uncertain and may vary depending upon the facts or
circumstances, stockholder challenges to corporate action in general are related
to the fiduciary responsibilities of corporate officers and directors and to the
fairness of corporate transactions.
Reservation of Rights
Although the Board of Directors requests stockholder approval of the
proposed amendment to the Restated Certificate of Incorporation, the Board
reserves the right to decide, in its discretion, to withdraw the Reverse Stock
Split Proposal from the agenda of the Annual Meeting prior to any stockholder
vote thereon or to abandon the Reverse Stock Split Proposal after such vote
before the Effective Date even if the Proposal is approved. Although the Board
presently believes that the Proposal is in the best interests of First Palmetto
and its stockholders, and thus has recommended a vote for the Proposal, the
Board nonetheless believes that it is prudent to recognize that, between the
date of this Proxy Statement and the Effective Date, factual circumstances could
possibly change such that it might not be appropriate or desirable to effect the
Reverse Stock Split Proposal at that time. If the Board decides to withdraw the
Reverse Stock Split Proposal from the agenda of the Annual Meeting, the Board
will notify the stockholders of such decision promptly by mail and by
announcement at the Annual Meeting. If the Board decides to abandon the Reverse
Stock Split Proposal after the Annual Meeting and before the Effective Date, the
Board will notify the stockholders of such decision promptly by mail.
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<PAGE>
The Board recommends that you vote FOR the Reverse Stock Split Proposal.
-----------------------------------------------------------------------
Proxies solicited by the Board of Directors will be voted FOR this Proposal,
unless you specify otherwise in your proxy.
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors expects to appoint KPMG LLP to audit First
Palmetto's financial statements for the fiscal year ending September 30, 2000.
KPMG LLP served as First Palmetto's independent auditors for the year ended
September 30, 1999 and has served as First Palmetto's independent auditors since
1991. A representative of KPMG LLP is expected to be present at the Annual
Meeting. He will be available to respond to appropriate questions and will have
the opportunity to make a statement if he desires to do so.
- --------------------------------------------------------------------------------
SOLICITATION INFORMATION
- --------------------------------------------------------------------------------
The cost of soliciting proxies in the form enclosed herewith will be borne
by First Palmetto. In addition to solicitation of proxies by mail, First
Palmetto, through its directors, officers and regular employees, may also
solicit proxies personally or by telegraph or telephone without additional
compensation. First Palmetto will request persons, firms and corporations
holding shares in their names or in the names of their nominees, which are
beneficially owned by others, to send proxy materials to and obtain proxies from
such beneficial owners and will reimburse such holders for their reasonable
expenses in doing so.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
If Proposal II is not approved at the Annual Meeting or the Reverse Stock
Split Proposal is not implemented prior to next year's Annual Meeting of
Stockholders, any proposal intended to be presented by any stockholder for
action at next year's Annual Meeting must be received by the Secretary of First
Palmetto at First Palmetto's main office, 407 DeKalb Street, Camden, South
Carolina 29020 not later than __________ in order for the proposal to be
considered for inclusion in the proxy materials relating to that Annual Meeting.
First Palmetto's Certificate of Incorporation provides that due notice of
business to be bought before an annual meeting by a stockholder must be
delivered to the principal executive offices of First Palmetto neither fewer
than 30 nor more than 90 days prior to the meeting, unless notice or prior
public disclosure of the date of the meeting occurs fewer than 45 days prior to
the date of the meeting, in which event the Certificate of Incorporation
provides that due notice of business to be brought before the meeting by a
stockholder must be delivered not later than the close of business on the 15th
day following the day on which notice of the day of the meeting was mailed or
public disclosure was made. To be timely under the Certificate of Incorporation,
a stockholder's proposal for new business in connection with next year's Annual
Meeting of Stockholders (to be held on or about _______ __, 2000) must be
delivered on or before __________ __, 2000 (if 45 days' notice or prior public
disclosure is given). Nothing in this paragraph shall be deemed to require First
Palmetto to include in its proxy materials any stockholder proposal which does
not meet all of the requirements for inclusion established by the Securities and
Exchange Commission or First Palmetto's Certificate of Incorporation or Bylaws
in effect at the time such proposal is received.
22
<PAGE>
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Financial Information
A copy of First Palmetto's Annual Report to Stockholders for fiscal 1999
accompanies this Proxy Statement. First Palmetto has filed an Annual Report on
Form 10-K (File No. 0-18932) for the fiscal year ended September 30, 1999 with
the SEC (the "Form 10-K"). Stockholders may obtain, free of charge, a copy of
the Form 10-K by writing to the Secretary of First Palmetto at Post Office Box
861, Camden, South Carolina 29020. The Form 10-K is incorporated by reference in
this Proxy Statement.
Available Information
First Palmetto is subject to the information requirements of the 1934 Act
and in accordance therewith files reports, proxy statements and other
information with the SEC. Such reports, proxy statements and other information
can be inspected and copied at the public reference facilities of the SEC at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and
at the regional offices of the SEC located at 7 World Trade Center, 13/th/
Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center,
14/th/ Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. In addition, such reports, proxy statements and other
information are available from the Edgar filings obtained through the SEC
Internet Website (http://www.sec.gov.)
BY ORDER OF THE BOARD OF DIRECTORS
DARLENE H. LOVE
SECRETARY
Camden, South Carolina
____________ __, 2000
23
<PAGE>
Appendix A
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST PALMETTO FINANCIAL CORPORATION
-------------------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
-------------------------------------------------
FIRST PALMETTO FINANCIAL CORPORATION, a Delaware corporation, does hereby
certify as follows:
FIRST: The first paragraph of Article IV of the Corporation's Restated
Certificate of Incorporation is hereby amended to read in its entirety as set
forth below:
The aggregate number of shares of all classes of
capital stock which the Corporation has authority to issue is
five hundred twelve thousand (512,000), of which twelve thousand
(12,000) shall be common stock, par value $1.25 per share,
amounting in the aggregate to fifteen thousand dollars ($15,000),
and of which five hundred thousand (500,000) shall be serial
preferred stock, par value $0.01 per share, amounting in the
aggregate to five thousand dollars ($5,000). The shares may be
issued by the Corporation from time to time as approved by its
Board of Directors without the approval of its stockholders. The
consideration for the issuance of the shares shall be paid in
full before issuance and shall not be less than the par value per
share. Neither promissory notes nor future services shall
constitute payment or part payment for the issuance of the shares
of the Corporation. The consideration for the shares shall be
cash, services actually performed for the Corporation, personal
property (tangible or intangible), real property, leases of real
property or any combination of the foregoing. In the absence of
actual fraud in the transaction, the judgment of the Board of
Directors as to the value of such consideration shall be
conclusive. Upon payment of such consideration such shares shall
be deemed to be fully paid and nonassessable.
SECOND: The foregoing amendment was duly adopted in accordance with
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has cause this Certificate to be duly
executed in its corporate name this _____ day of __________, 2000.
FIRST PALMETTO FINANCIAL CORPORATION
By: _______________________________
Name:
Title:
ATTEST:
By: _______________________________
Name:
Title:
24
<PAGE>
Appendix B
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
January 3, 2000
Board of Directors
First Palmetto Financial Corporation
407 DeKalb Street
Camden, South Carolina 29020
Members of the Board of Directors:
At your request, we have completed and hereby provide an independent
analysis and evaluation ("Evaluation") of the estimated fair market value of the
Preferred Stock of First Palmetto Financial Corporation ("First Palmetto"),
which is to be issued to holders of First Palmetto Common Stock in lieu of
fractional share interests resulting from a reverse stock split. All capitalized
terms not otherwise defined in this letter have the meanings given such terms in
the Proxy Statement authorized by the Board of Directors of First Palmetto,
which sets forth a proposal to amend First Palmetto's Restated Certificate of
Incorporation to effect a 1-for-125 reverse stock split of the Common Stock.
RP Financial, LC.
- -----------------
RP Financial, LC. of Arlington, Virginia, is a financial consulting firm
that, among other things, specializes in the fair market valuation of the equity
and debt securities issued by financial institutions and their subsidiary
companies. RP Financial has been approved as a qualified financial institution
appraisal firm by the Office of General Counsel of the Office of Thrift
Supervision ("OTS"), the Federal Deposit Insurance Corporation ("FDIC"), and
numerous state banking agencies. The principals and staff of RP Financial have
served as fair market appraisers and consultants for over 500 financial
institutions pursuant to initial and secondary offerings (including rights
offerings), business combinations, mutual-to-stock conversions, mutual holding
company formations, ESOPs and stock option plans, audited financial statement
disclosure and other purposes.
Neither RP Financial nor its employees have any present or contemplated
future interest in the Common Stock or Preferred Stock of First Palmetto or its
principals or any other interest that might tend to prevent RP Financial in
making a fair and unbiased evaluation.
Definition of Fair Market Value
- -------------------------------
Throughout this letter, the terms "market value" and "fair market value"
are considered to represent the value at which a willing buyer and willing
seller, both being informed of the relevant facts about the business, could
reasonably conduct a transaction, neither party acting under any compulsion to
do so.
Among other factors, our Evaluation takes into consideration all elements
of appraisal listed in Internal Revenue Service Ruling 59-60, which provides
guidelines for the appraisal of closely held stocks. Revenue ruling 59-60 states
that all relevant factors should be taken into consideration, including the
following:
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Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210 Telephone: (703) 528-1700
Arlington, VA 22209 Fax No: (703) 528-1788
<PAGE>
RP Financial, LC.
Board of Directors
January 3, 2000
Page 2
(1) The nature of the business and the history of the
enterprise from its inception;
(2) The economic outlook in general and the condition
and outlook of the specific industry in particular;
(3) The book value of the stock and the financial
condition of the business;
(4) The earning capacity of the company;
(5) The dividend-paying capacity of the company;
(6) Whether or not the enterprise has goodwill or
other intangible value;
(7) Sales of the stock and the size of the block of
stock to be valued; and,
(8) The market price of stocks of corporations engaged
in the same or similar line of business having their
stocks actively traded in a free and open market,
either on an exchange or over the counter.
Limiting Factors and Considerations
- -----------------------------------
Our valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing shares of the
Common Stock or the Preferred Stock. Moreover, because such valuation is
necessarily based upon estimates and projections of a number of matters, all of
which are subject to change from time to time, no assurance can be given that
persons who purchase shares of Common Stock or Preferred Stock will thereafter
be able to buy or sell such shares at prices related to the foregoing valuation.
RP Financial's valuation was determined based on the financial condition
and operations of First Palmetto, as of September 30, 1999.
RP Financial is not a seller of securities within the meaning of any
federal and state securities laws and any report prepared by RP Financial shall
not be used as an offer or solicitation with respect to the purchase or sale of
any securities. RP Financial maintains a policy which prohibits RP Financial,
its principals or employees from purchasing stock of its client institutions.
Description and Purpose of Transaction
- --------------------------------------
The Board of Directors is proposing to amend First Palmetto's Restated
Certificate of Incorporation to effect a 1-for-125 reverse stock split of the
Common Stock, and to issue shares of Preferred Stock in lieu of fractional share
interests to any First Palmetto stockholder who, following the reverse split,
would hold less than one share of Common Stock in any discrete account (the
"Reverse Stock Split Proposal"). Accordingly, if the Reverse Stock Split
Proposal is approved, all registered shareholders on the Effective Date will
receive 1 share of new Common Stock for every 125 shares of Common Stock held of
record in their accounts at that time. Any registered stockholder who holds
fewer than 125 shares of Common Stock in a record account will receive one share
of Preferred Stock for each share of Common Stock instead of a fractional share.
All fractional shares in a record account that exceed 125 shares of Common Stock
will also be converted into one share of Preferred Stock for each share of
Common Stock instead of a fractional share. For example, if a stockholder holds
150 shares of Common Stock in a record account as of the Effective Date, the
stockholder holder would
<PAGE>
RP Financial, LC.
Board of Directors
January 3, 2000
Page 3
receive 1 share of Common Stock and 25 shares of Preferred Stock after the
reverse stock split instead of 1.2 shares of Common Stock.
The Board of Directors of First Palmetto has stated that the purpose of the
Reverse Stock Split is to reduce the number of stockholders of record of Common
Stock to fewer than 300 persons in order to relieve First Palmetto of the
administrative burden and cost and competitive disadvantages associated with
filing reports and otherwise complying with the requirements of the Security and
Exchange Commission ("SEC") under the 1934 Act, by deregistering the Common
Stock under the 1934 Act. If the Reverse Stock Split Proposal is effected, the
Board of Directors believes that, based on First Palmetto's stockholder records,
there will be fewer than 300 stockholders of record of new Common Stock. In
connection with the deregistering of its Common Stock under the 1934 Act, First
Palmetto plans to become a privately held company.
First Palmetto incurs direct and indirect costs associated with the SEC's
filing and reporting requirements imposed on public companies. First Palmetto
estimates that termination of the registration of Common Stock under the 1934
Act will save First Palmetto approximately $50,000 per year in legal, accounting
and other expenses. First Palmetto also incurs indirect costs as a result of,
among other things, the executive time expended to prepare and review such
filings. The Board believes that the disadvantages of having First Palmetto
continue to be a 1934 Act registrant outweigh any advantages. The Board has no
present intention to raise capital through sales of securities in a public
offering in the future or to acquire other business entities using stock as
consideration for any such acquisition. Accordingly, First Palmetto is not
likely to make use of any advantage that First Palmetto's status as a reporting
company may offer.
Rights of Preferred Stockholders
- --------------------------------
As described in the Proxy materials, the Preferred Stock issued by First
Palmetto will have the following rights:
1. The Preferred stock will be non-voting, except as required by
Delaware law.
2. The Preferred Stock will be entitled to receive dividends. No dividend
may be paid on the new Common Stock unless an equivalent dividend is
paid concurrently on the Preferred Stock. Unless otherwise determined by
the Board, an equivalent dividend will be based on the 1-for-125
reverse stock split ratio.
3. In the unlikely event of a liquidation, the Preferred Stock would
have a preference over the Common Stock.
4. The Preferred Stock will be redeemable by First Palmetto at the option
of First Palmetto, following a two year period subsequent to the
Effective Date. The redemption price will be the greater of the current
fair market value of the Preferred Stock as determined by the Board of
Directors or 115 percent of a current independent appraisal of such
value.
<PAGE>
RP Financial, LC.
Board of Directors
January 3, 2000
Page 4
5. In the event of a negotiated acquisition of First Palmetto, the
Preferred Stock will be valued by the Board on the same basis as the
Common Stock, subject to the 1-for-125 reverse stock split ratio.
6. Prior to any transfer of the Preferred Stock which would result in a
greater number of registered holders thereof, First Palmetto will have a
right of first refusal to purchase such shares at the greater of the
current fair market value of the Preferred Stock as determined by the
Board of Directors or the most recent appraisal of such value. First
Palmetto expects to obtain such an appraisal on an annual basis.
Valuation of Common Stock
- -------------------------
RP Financial prepared an independent appraisal of the Common Stock ("Common
Stock Appraisal"), dated December 17, 1999, which concluded with a fair market
value of the Common Stock of $75.00 per share. The Common Stock Appraisal is
hereby incorporated by reference. The valuation approaches, methodologies and
conclusions are fully described in the Common Stock Appraisal.
Analysis and Evaluation of Preferred Stock
- ------------------------------------------
RP Financial concluded that as of December 17, 1999, the estimated value of
the Common Stock was $75.00 per share. RP Financial considered a number of
factors described in more detail below, in its analysis and evaluation of the
Preferred Stock. Based on these factors, RP Financial concluded that the fair
market value of the Preferred Stock is substantially equivalent to $75.00 per
share. In reaching our conclusion that the fair market values of the Preferred
Stock and Common Stock were substantially equivalent, we took into consideration
the comparative rights of the Preferred Stock and the Common Stock.
Our assessment of the comparative rights of the Preferred Stock and Common
Stock took into consideration the loss of voting rights by the holders of the
Preferred Stock and the ability of First Palmetto to redeem the Preferred Stock
at its option, both of which were considered to be negative valuation
considerations for the Preferred Stock relative to the Common Stock. It is our
view that the negative valuation considerations associated with the loss of
voting rights and the redemption feature were offset by other positive valuation
considerations associated with the Preferred Stock, which included the dividend
preference and liquidation preference of the Preferred Stock, the probability of
a more liquid trading market for the Preferred Stock and the premium price to be
received by the holders of the Preferred Stock in the event of a redemption.
It is anticipated that the Preferred Stock will have a more liquid trading
market relative to the Common Stock, since the 1-for-125 reserve stock split of
the Common Stock will result in fewer shares of Common Stock outstanding in
comparison to the number of shares of Preferred Stock that will be outstanding.
Additionally, the reverse split adjusted price of the Common Stock will be
significantly higher than price of the Preferred Stock, which we also believe
will result in a relatively more liquid trading market for the Preferred Stock.
In the event the Preferred Stock is redeemed by First Palmetto, the
redemption price will be the greater of the current fair market value of the
Preferred Stock as determined by the
<PAGE>
RP Financial, LC.
Board of Directors
January 3, 2000
Page 5
Board of Directors or 115 percent of a current independent appraisal of such
value. The premium associated with the redemption price is believed to
adequately compensate the holders of the Preferred Stock at the time of
redemption for foregoing potential increases in value. Our conclusion in this
regard considered historical control premium data for thrift acquisitions
announced in 1998 and 1999, which indicate that the average control premium paid
for thrift acquisitions announced in 1998 and year-to-date 1999 equaled 24.0
percent and 39.0 percent, respectively, based on the closing stock prices of the
acquired institutions one day prior to the announcement date of their
acquisitions (see Exhibits I and II). We concluded that the 15 percent premium
upon redemption reasonably reflects the uncertainty of future events, yet still
compensates the Preferred Stock holders adequately for foregoing potential
increases in value, given that there is no certainty as to the timing or
probability that a negotiated acquisition of First Palmetto would be completed
following the redemption.
Overall, the Preferred Stock has the same dividend and price under a merger
as the Common Stock. The downward valuation adjustment relative to the Common
Stock for the lack of voting rights and redemption provision are substantially
and equally offset by the Preferred Stock's dividend preference, liquidation
preference, anticipated greater liquidity and premium on redemption. These
factors were all considered in RP Financial's conclusion that the Preferred
Stock has a fair market value substantially equivalent to the Common Stock.
Respectfully submitted,
RP FINANCIAL, LC.
/s/ RP Financial, LC.
<PAGE>
EXHIBITS
<PAGE>
RP Financial, LC.
LIST OF EXHIBITS
Exhibit
Number Description
------- -----------
I Thrift Acquisitions Announced in 1998
II Thrift Acquisitions Announced in 1999
<PAGE>
EXHIBIT I
Thrift Acquisitions Announced in 1998
<PAGE>
Exhibit I
Thrift Acquisitions Announced in 1998
<TABLE>
<CAPTION>
Price/ Book Price/ Earnings
Announcement Announcement
Announced Completion Buyer Name Seller Name (%) (x)
Date Date
<S> <C> <C> <C> <C> <C>
04/23/98 11/16/98 Ambanc Holding Co. Inc. AFSALA Bancorp Inc. 144.62 22.58
08/28/98 06/03/99 American General Corporation Standard Pacific Savings, FA NA NA
04/03/98 10/01/98 Astoria Financial Corporation Long Island Bancorp Inc. 299.09 32.11
02/25/98 09/30/98 BB&T Corporation Maryland Federal Bancorp Inc. 233.87 25.55
05/07/98 09/03/98 Blackhawk Bancorp, Inc. First Financial Bancorp Inc. 161.46 NM
02/27/98 06/26/98 Blue River Bancshares Shelby County Bancorp 136.28 18.95
09/29/98 03/31/99 Capital Bank Home Savings Bank of Siler City Inc. SSB 147.37 58.07
06/29/98 09/30/98 Carolina First Corporation Poinsett Financial Corporation 319.74 NM
05/29/98 09/30/98 Cecil Bancorp Inc. Columbian Bank, A FSB 159.60 21.19
05/07/98 08/03/98 Central Bancshares Inc. Pioneer Financial Corporation 220.46 15.18
10/28/98 03/29/99 Centura Banks Inc. First Coastal Bankshares Inc. 262.11 28.33
08/26/98 02/05/99 Centura Banks Inc. Scotland Bancorp Inc. 147.61 23.50
04/24/98 10/16/98 Charter One Financial Inc. CS Financial Corporation 251.83 28.18
06/15/98 11/30/98 Charter One Financial Inc. ALBANK Financial Corporation 257.80 23.06
10/12/98 02/26/99 Coal City Corporation Avondale Financial Corp. NM NM
02/12/98 07/31/98 Commercial Federal Corporation AmerUs Bank 193.12 13.74
03/09/98 08/14/98 Commercial Federal Corporation First Colorado Bancorp, Inc. 240.96 24.59
04/22/98 12/14/98 Community West Bancshares Palomar Savings & Loan Association 220.00 19.71
11/18/98 08/02/99 Crown Group Inc. Delaware First Financial Corporation 111.35 NM
12/16/98 05/21/99 Dime Bancorp Inc. Lakeview Financial Corp. 195.49 9.95
07/20/98 01/21/99 Dime Community Bancshares Inc. Financial Bancorp Inc. 246.50 24.40
03/20/98 08/31/98 Emclaire Financial Corp. Peoples Savings Financial Corporation 129.48 29.21
07/06/98 11/20/98 Enterprise Federal Bancorp Inc. Security Savings Holding Co. Inc. 165.67 22.00
09/09/98 04/30/99 FBOP Corporation Calumet Bancorp Inc. 115.36 11.47
09/28/98 03/19/99 Fidelity Financial of Ohio Inc. Glenway Financial Corp. NM NM
01/14/98 06/26/98 Fifth Third Bancorp CitFed Bancorp, Inc. 338.79 28.24
09/25/98 05/14/99 Fifth Third Bancorp Enterprise Federal Bancorp Inc. 283.92 34.31
01/05/98 06/19/98 Fifth Third Bancorp State Savings Company 338.73 27.33
05/18/98 09/30/98 First Charter Corporation HFNC Financial Corp. 142.07 18.62
08/17/98 04/13/99 First Federal Savings Bank of Siouxland Mid-Iowa Financial Corp. 194.05 19.48
12/07/98 04/02/99 First National Bank of Shelby First Carolina Federal Savings Bank 204.86 NM
07/09/98 12/18/98 First Source Bancorp Inc. Pulse Bancorp Inc. 221.15 18.18
08/13/98 12/31/98 First Western Bank Mitchell Bancorp 127.23 40.00
09/03/98 12/29/98 FirstCapital Bank SSB Liberty Savings Association NA NA
04/05/98 10/23/98 FirstMerit Corporation Security First Corporation 349.37 27.36
05/14/98 12/31/98 FLAG Financial Corporation The Brown Bank 203.32 53.02
06/25/98 12/31/98 German American Bancorp 1ST Bancorp 243.84 28.74
02/05/98 09/11/98 Golden State Bancorp Inc. First Nationwide Holdings NM NM
09/08/98 04/01/99 Greater Community Bancorp First Savings Bancorp of Little Falls 227.77 26.20
03/31/98 08/21/98 Hudson United Bancorp Dime Financial Corporation 249.19 12.10
03/31/98 08/14/98 Hudson United Bancorp IBS Financial Corp. 187.06 38.38
01/27/98 11/10/98 Jackson National Life Insurance Company First FS&LA of San Bernardino 128.02 NM
10/15/98 03/31/99 Kearny Federal Savings Bank 1st Bergen Bancorp 177.91 28.57
07/02/98 03/01/99 Lutheran Brotherhood Financial Metro Community Bank, FSB 169.66 NM
08/17/98 12/31/98 MAF Bancorp Inc. Westco Bancorp Inc. 152.94 17.54
<CAPTION>
Price/ Assets
Announcement 1 Day Premium
Announced Completion Buyer Name Seller Name (%) (%)
Date Date
<S> <C> <C> <C> <C> <C>
04/23/98 11/16/98 Ambanc Holding Co. Inc. AFSALA Bancorp Inc. 18.70 1.20
08/28/98 06/03/99 American General Corporation Standard Pacific Savings, FA NA NA
04/03/98 10/01/98 Astoria Financial Corporation Long Island Bancorp Inc. 29.08 3.33
02/25/98 09/30/98 BB&T Corporation Maryland Federal Bancorp Inc. 21.50 16.68
05/07/98 09/03/98 Blackhawk Bancorp, Inc. First Financial Bancorp Inc. 15.47 17.65
02/27/98 06/26/98 Blue River Bancshares Shelby County Bancorp 11.11 NA
09/29/98 03/31/99 Capital Bank Home Savings Bank of Siler City Inc. SSB 24.99 33.45
06/29/98 09/30/98 Carolina First Corporation Poinsett Financial Corporation 20.22 NA
05/29/98 09/30/98 Cecil Bancorp Inc. Columbian Bank, A FSB 10.66 NA
05/07/98 08/03/98 Central Bancshares Inc. Pioneer Financial Corporation 28.66 129.07
10/28/98 03/29/99 Centura Banks Inc. First Coastal Bankshares Inc. 20.69 27.79
08/26/98 02/05/99 Centura Banks Inc. Scotland Bancorp Inc. 37.16 29.65
04/24/98 10/16/98 Charter One Financial Inc. CS Financial Corporation 18.81 NA
06/15/98 11/30/98 Charter One Financial Inc. ALBANK Financial Corporation 26.31 42.87
10/12/98 02/26/99 Coal City Corporation Avondale Financial Corp. NM 0.00
02/12/98 07/31/98 Commercial Federal Corporation AmerUs Bank 14.65 NA
03/09/98 08/14/98 Commercial Federal Corporation First Colorado Bancorp, Inc. 34.04 6.19
04/22/98 12/14/98 Community West Bancshares Palomar Savings & Loan Association 15.52 NA
11/18/98 08/02/99 Crown Group Inc. Delaware First Financial Corporation 17.71 51.22
12/16/98 05/21/99 Dime Bancorp Inc. Lakeview Financial Corp. 19.99 3.08
07/20/98 01/21/99 Dime Community Bancshares Inc. Financial Bancorp Inc. 23.71 26.56
03/20/98 08/31/98 Emclaire Financial Corp. Peoples Savings Financial Corporation 27.42 NA
07/06/98 11/20/98 Enterprise Federal Bancorp Inc. Security Savings Holding Co. Inc. 17.77 NA
09/09/98 04/30/99 FBOP Corporation Calumet Bancorp Inc. 22.46 18.52
09/28/98 03/19/99 Fidelity Financial of Ohio Inc. Glenway Financial Corp. NM 8.90
01/14/98 06/26/98 Fifth Third Bancorp CitFed Bancorp, Inc. 22.02 42.87
09/25/98 05/14/99 Fifth Third Bancorp Enterprise Federal Bancorp Inc. 19.05 50.03
01/05/98 06/19/98 Fifth Third Bancorp State Savings Company 32.24 NA
05/18/98 09/30/98 First Charter Corporation HFNC Financial Corp. 24.52 2.50
08/17/98 04/13/99 First Federal Savings Bank of Siouxland Mid-Iowa Financial Corp. 20.88 22.45
12/07/98 04/02/99 First National Bank of Shelby First Carolina Federal Savings Bank 15.38 NA
07/09/98 12/18/98 First Source Bancorp Inc. Pulse Bancorp Inc. 19.70 12.28
08/13/98 12/31/98 First Western Bank Mitchell Bancorp 50.93 24.03
09/03/98 12/29/98 FirstCapital Bank SSB Liberty Savings Association NA NA
04/05/98 10/23/98 FirstMerit Corporation Security First Corporation 37.63 30.85
05/14/98 12/31/98 FLAG Financial Corporation The Brown Bank 11.26 NA
06/25/98 12/31/98 German American Bancorp 1ST Bancorp 22.00 NA
02/05/98 09/11/98 Golden State Bancorp Inc. First Nationwide Holdings NM NA
09/08/98 04/01/99 Greater Community Bancorp First Savings Bancorp of Little Falls 12.67 NA
03/31/98 08/21/98 Hudson United Bancorp Dime Financial Corporation 21.99 6.25
03/31/98 08/14/98 Hudson United Bancorp IBS Financial Corp. 32.77 3.63
01/27/98 11/10/98 Jackson National Life Insurance Company First FS&LA of San Bernardino 5.89 50.00
10/15/98 03/31/99 Kearny Federal Savings Bank 1st Bergen Bancorp 21.51 33.33
07/02/98 03/01/99 Lutheran Brotherhood Financial Metro Community Bank, FSB 16.47 NA
08/17/98 12/31/98 MAF Bancorp Inc. Westco Bancorp Inc. 25.79 14.31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price/ Book Price/ Earnings
Announcement Announcement
Announced Completion Buyer Name Seller Name (%) (x)
Date Date
<S> <C> <C> <C> <C> <C>
06/25/98 01/01/99 Mutual Bancorp of the Berkshires Inc. Lenox Financial Services Corporation NA NA
05/22/98 12/01/98 National City Bancshares Princeton Federal Bank, FSB 175.71 25.00
04/09/98 12/15/98 Ohio Valley Banc Corp. Jackson Savings Bank 119.51 24.16
07/20/98 01/01/99 Peoples Heritage Financial Group SIS Bancorp Inc. 312.77 32.34
10/20/98 03/26/99 Peoples Holding Company Inter-City Federal Savings Bank 227.14 33.33
11/03/98 05/12/99 Perpetual Federal Savings & Loan Assoc. Progressive Federal Savings Bank NA NA
03/31/98 07/31/98 Private Investor - Marshall T. Reynolds Summit Savings, FSB 146.39 16.20
08/28/98 12/23/98 Provident Savings Bank Monarch Bank FSB NA NA
03/11/98 08/05/98 R&G Financial Corp. Fajardo Federal Savings Bank 206.74 26.64
12/01/98 05/17/99 Republic Bancorp Inc. D & N Financial Corporation 246.69 18.16
02/10/98 11/09/98 Republic Bancshares Inc. Bankers Savings Bank 300.86 NM
04/22/98 11/05/98 Republic Bancshares Inc. Lochaven Federal Savings & Loan Association 206.77 NM
05/28/98 10/29/98 Republic Security Financial Corporation First Palm Beach Bancorp Inc. 237.88 30.75
03/26/98 07/02/98 Republic Security Financial Corporation UniFirst Federal Savings Bank 168.20 45.76
07/20/98 03/22/99 Richmond County Financial Corp. Bayonne Bancshares Inc. 175.40 39.98
05/26/98 02/17/99 Roslyn Bancorp Inc. TR Financial Corp. 403.07 27.23
03/09/98 10/01/98 Royal Bank of Canada Security First Network Bank 190.00 NM
02/02/98 12/03/98 Seacoast Financial Services Corp. Sandwich Bancorp 295.89 26.12
05/04/98 11/19/98 Second Bancorp Inc. Trumbull Financial Corp. 327.90 34.60
02/06/98 06/30/98 Signal Corp. First Shenango Bancorp Inc. 205.08 21.18
12/17/98 07/19/99 Sky Financial Group Inc. Wood Bancorp Inc. 239.22 23.65
02/26/98 06/30/98 Southside Bancshares Corp. Public Service Bank FSB 194.78 31.60
10/21/98 04/01/99 Southwest Bancorporation of Texas Inc. Fort Bend Holding Corp. 173.72 23.14
09/08/98 06/30/99 Sovereign Bancorp Peoples Bancorp Inc. 111.70 44.98
06/30/98 01/22/99 St Francis Capital Corp. Reliance Bancshares Inc. 107.41 47.62
06/02/98 12/15/98 State Financial Services Corp. Home Bancorp of Elgin Inc. 139.78 51.32
04/23/98 11/13/98 Sterling Financial Corporation Big Sky Bancorp Inc. 148.08 20.27
06/18/98 11/23/98 Summit Bancorp NSS Bancorp 257.34 25.14
04/15/98 09/01/98 Synovus Financial Corporation Community Bank Capital Corporation 366.13 17.98
01/15/98 08/11/98 Telebanc Financial Corporation Direct Financial Corporation 153.93 NM
11/16/98 06/30/99 Temple-Inland Inc. HF Bancorp Inc. 140.90 NM
04/21/98 04/21/98 UCBH Holdings Inc. USB Holdings 145.36 12.87
07/02/98 01/31/99 Union Planters Corp. First Mutual Bancorp 127.41 46.25
02/18/98 10/01/98 United Bankshares Inc. Fed One Bancorp 213.40 27.42
09/22/98 03/31/99 United National Bancorp Raritan Bancorp Inc. 284.98 24.36
10/26/98 09/01/99 United Payors & United Providers Inc. Quantum Financial Holdings Inc. 132.35 25.25
03/06/98 08/31/98 USB Holding Company Tappan Zee Financial Inc. 151.10 30.56
05/29/98 10/16/98 Valley National Bancorp Wayne Bancorp Inc. 200.44 35.08
09/16/98 01/28/99 VIB Corp. Bank of Stockdale FSB 284.97 37.68
03/17/98 10/01/98 Washington Mutual Inc. H.F. Ahmanson & Company 390.67 22.38
07/15/98 02/01/99 Westbank Corporation Cargill Bancorp Inc. 157.22 31.89
12/04/98 06/14/99 Winton Financial Corporation BenchMark Federal Savings Bank 158.77 NM
Average: 209.18 27.62
Median: 201.88 28.21
<CAPTION>
Price/ Assets
Announcement 1 Day Premium
Announced Completion Buyer Name Seller Name (%) (%)
Date Date
<S> <C> <C> <C> <C> <C>
06/25/98 01/01/99 Mutual Bancorp of the Berkshires Inc. Lenox Financial Services Corporation NA NA
05/22/98 12/01/98 National City Bancshares Princeton Federal Bank, FSB 24.78 NA
04/09/98 12/15/98 Ohio Valley Banc Corp. Jackson Savings Bank 20.79 NA
07/20/98 01/01/99 Peoples Heritage Financial Group SIS Bancorp Inc. 23.97 27.19
10/20/98 03/26/99 Peoples Holding Company Inter-City Federal Savings Bank 26.59 NA
11/03/98 05/12/99 Perpetual Federal Savings & Loan Assoc. Progressive Federal Savings Bank NA NA
03/31/98 07/31/98 Private Investor - Marshall T. Reynolds Summit Savings, FSB 8.82 NA
08/28/98 12/23/98 Provident Savings Bank Monarch Bank FSB NA NA
03/11/98 08/05/98 R&G Financial Corp. Fajardo Federal Savings Bank 21.73 NA
12/01/98 05/17/99 Republic Bancorp Inc. D & N Financial Corporation 14.69 30.71
02/10/98 11/09/98 Republic Bancshares Inc. Bankers Savings Bank 18.26 NA
04/22/98 11/05/98 Republic Bancshares Inc. Lochaven Federal Savings & Loan Association 9.96 NA
05/28/98 10/29/98 Republic Security Financial Corporation First Palm Beach Bancorp Inc. 16.70 50.81
03/26/98 07/02/98 Republic Security Financial Corporation UniFirst Federal Savings Bank 9.50 NA
07/20/98 03/22/99 Richmond County Financial Corp. Bayonne Bancshares Inc. 27.10 11.13
05/26/98 02/17/99 Roslyn Bancorp Inc. TR Financial Corp. 27.81 46.62
03/09/98 10/01/98 Royal Bank of Canada Security First Network Bank 31.25 NA
02/02/98 12/03/98 Seacoast Financial Services Corp. Sandwich Bancorp 25.27 10.82
05/04/98 11/19/98 Second Bancorp Inc. Trumbull Financial Corp. 24.80 NA
02/06/98 06/30/98 Signal Corp. First Shenango Bancorp Inc. 27.26 27.34
12/17/98 07/19/99 Sky Financial Group Inc. Wood Bancorp Inc. 35.48 29.59
02/26/98 06/30/98 Southside Bancshares Corp. Public Service Bank FSB 12.06 NA
10/21/98 04/01/99 Southwest Bancorporation of Texas Inc. Fort Bend Holding Corp. 19.85 14.47
09/08/98 06/30/99 Sovereign Bancorp Peoples Bancorp Inc. 43.44 26.31
06/30/98 01/22/99 St Francis Capital Corp. Reliance Bancshares Inc. 55.69 21.21
06/02/98 12/15/98 State Financial Services Corp. Home Bancorp of Elgin Inc. 37.13 13.87
04/23/98 11/13/98 Sterling Financial Corporation Big Sky Bancorp Inc. 19.97 28.96
06/18/98 11/23/98 Summit Bancorp NSS Bancorp 22.46 28.24
04/15/98 09/01/98 Synovus Financial Corporation Community Bank Capital Corporation 23.47 NA
01/15/98 08/11/98 Telebanc Financial Corporation Direct Financial Corporation 8.15 NA
11/16/98 06/30/99 Temple-Inland Inc. HF Bancorp Inc. 11.58 8.82
04/21/98 04/21/98 UCBH Holdings Inc. USB Holdings 7.68 NA
07/02/98 01/31/99 Union Planters Corp. First Mutual Bancorp 17.40 5.71
02/18/98 10/01/98 United Bankshares Inc. Fed One Bancorp 25.34 8.87
09/22/98 03/31/99 United National Bancorp Raritan Bancorp Inc. 22.48 15.89
10/26/98 09/01/99 United Payors & United Providers Inc. Quantum Financial Holdings Inc. 8.65 NA
03/06/98 08/31/98 USB Holding Company Tappan Zee Financial Inc. 26.73 15.79
05/29/98 10/16/98 Valley National Bancorp Wayne Bancorp Inc. 27.21 NA
09/16/98 01/28/99 VIB Corp. Bank of Stockdale FSB 20.52 NA
03/17/98 10/01/98 Washington Mutual Inc. H.F. Ahmanson & Company 21.22 22.69
07/15/98 02/01/99 Westbank Corporation Cargill Bancorp Inc. 12.56 NA
12/04/98 06/14/99 Winton Financial Corporation BenchMark Federal Savings Bank 10.07 NA
Average: 22.00 24.04
Median: 21.62 21.83
</TABLE>
<PAGE>
EXHIBIT II
Thrift Acquisitions Announced in 1999
<PAGE>
Exhibit II
Thrift Acquisitions Announced in 1999
<TABLE>
<CAPTION>
Price/ Book Price/ Earnings
Announcement Announcement
Announced Completion Buyer Name Seller Name (%) (x)
Date Date
<C> <C> <S> <C> <C> <C>
01/05/99 06/07/99 Anchor BanCorp Wisconsin Inc. FCB Financial Corp. 223.20 24.53
01/27/99 07/09/99 BB&T Corporation First Citizens Corporation 297.92 23.43
04/28/99 11/19/99 BB&T Corporation First Liberty Financial Corp. 366.90 27.76
03/18/99 08/11/99 Belvedere Capital Partners Inc. Placer Savings Bank 233.01 21.70
02/17/99 NA Bremer Financial Corporation Northwest Equity Corporation 173.81 18.32
01/25/99 07/01/99 BSB Bancorp Inc. Skaneateles Bancorp Inc. 215.19 26.56
08/06/99 01/06/00 Camco Financial Corporation Westwood Homestead Financial Corporation 120.81 20.80
07/27/99 12/20/99 Camden National Corporation KSB Bancorp Inc. 203.50 15.51
04/14/99 10/04/99 CCB Financial Corporation Stone Street Bancorp Inc. 126.98 24.01
05/19/99 12/15/99 Central Bancompany Fulton Bancorp Inc. 124.59 29.02
08/05/99 NA Century South Banks Inc. Haywood Bancshares Inc. 122.27 NM
05/17/99 10/01/99 Charter One Financial Inc. St. Paul Bancorp Inc. 229.66 38.15
05/03/99 10/12/99 Citizens Bancshares Company MBLA Financial Corp. 106.20 16.54
01/23/99 06/01/99 CNB Bancorp Inc. Adirondack Financial Services Bancorp 162.48 47.77
11/05/99 NA Compass Bancshares Inc. MegaBank Financial Corporation 290.92 18.29
01/15/99 05/14/99 Concordia Capital Corporation Wilkinson County Savings Bank 188.80 28.66
06/01/99 01/13/00 E*TRADE Group Inc. Telebanc Financial Corp. NM NM
11/17/99 NA East Texas Financial Services Inc. Gilmer Financial Services Inc. 138.55 25.66
07/21/99 NA ESB Financial Corporation SHS Bancorp Inc. 114.65 31.00
10/27/99 NA Exchange National Bancshares Inc. CNS Bancorp Inc. 117.26 34.23
07/19/99 07/19/99 FBOP Corporation Sterling Savings Bank NA NA
03/01/99 08/06/99 Fifth Third Bancorp Emerald Financial Corporation 371.84 27.53
08/09/99 NA Financial Institutional Partners Mortgage Mission Savings & Loan Association, FA NA NA
12/16/99 NA First Bancorp First Savings Bancorp Inc. 115.64 16.06
06/30/99 10/29/99 First Busey Corporation Eagle BancGroup Inc. 140.66 30.28
11/11/99 NA First Community Bancshares Inc. Blue River Federal Savings Bank 147.46 25.60
07/08/99 11/19/99 First M & F Corp. Community Federal Bancorp Inc. 133.24 23.42
11/23/99 NA First Place Financial Corp. Ravenna Savings Bank 192.91 14.25
03/12/99 08/27/99 FLAG Financial Corporation Thomaston Federal Savings Bank 227.02 20.17
10/18/99 NA FNB Corp. Carolina Fincorp Inc. 178.48 27.80
05/28/99 08/31/99 FNB Financial Services Corporation Black Diamond Savings Bank FSB 206.29 15.91
10/21/99 NA Friedman, Billings, Ramsey Group Inc. Money Management Associates NA NA
09/14/99 NA FVNB Corp. Mid-Coast Savings Bank SSB NA NA
09/10/99 NA Glacier Bancorp Inc. Mountain West Bank 256.01 35.76
08/11/99 11/05/99 Hamilton Federal Savings & Loan Associate Belmar Federal Savings & Loan Association NA NA
05/17/99 09/03/99 Hudson River Bancorp Inc. SFS Bancorp Inc. 128.45 13.72
01/26/99 05/21/99 Hudson United Bancorp Little Falls Bancorp Inc. 144.77 28.01
04/13/99 01/07/00 Independence Community Bank Corp. Statewide Financial Corporation 173.75 29.44
03/24/99 09/15/99 Independent Bank Corp. Mutual Savings Bank FSB 173.40 23.93
07/13/99 NA IndyMac Mortgage Holdings Inc. SGV Bancorp Inc. 170.07 25.25
04/26/99 06/30/99 Lehman Brothers Holdings Inc. DSB Bancorp Inc. NA NA
</TABLE>
<TABLE>
<CAPTION>
Price/ Assets
Announcement 1 Day Premium
Announced Completion Buyer Name Seller Name (%) (%)
Date Date
<C> <C> <S> <C> <C> <C>
01/05/99 06/07/99 Anchor BanCorp Wisconsin Inc. FCB Financial Corp. 32.73 57.68
01/27/99 07/09/99 BB&T Corporation First Citizens Corporation 32.86 37.66
04/28/99 11/19/99 BB&T Corporation First Liberty Financial Corp. 29.41 43.01
03/18/99 08/11/99 Belvedere Capital Partners Inc. Placer Savings Bank 14.43 NA
02/17/99 NA Bremer Financial Corporation Northwest Equity Corporation 21.37 28.00
01/25/99 07/01/99 BSB Bancorp Inc. Skaneateles Bancorp Inc. 15.65 46.78
08/06/99 01/06/00 Camco Financial Corporation Westwood Homestead Financial Corporation 19.31 23.76
07/27/99 12/20/99 Camden National Corporation KSB Bancorp Inc. 17.29 61.79
04/14/99 10/04/99 CCB Financial Corporation Stone Street Bancorp Inc. 30.41 65.98
05/19/99 12/15/99 Central Bancompany Fulton Bancorp Inc. 26.83 12.65
08/05/99 NA Century South Banks Inc. Haywood Bancshares Inc. 17.84 50.80
05/17/99 10/01/99 Charter One Financial Inc. St. Paul Bancorp Inc. 20.23 16.06
05/03/99 10/12/99 Citizens Bancshares Company MBLA Financial Corp. 14.95 38.99
01/23/99 06/01/99 CNB Bancorp Inc. Adirondack Financial Services Bancorp 21.34 NA
11/05/99 NA Compass Bancshares Inc. MegaBank Financial Corporation 32.28 NA
01/15/99 05/14/99 Concordia Capital Corporation Wilkinson County Savings Bank 16.62 NA
06/01/99 01/13/00 E*TRADE Group Inc. Telebanc Financial Corp. NM 40.53
11/17/99 NA East Texas Financial Services Inc. Gilmer Financial Services Inc. 14.55 118.52
07/21/99 NA ESB Financial Corporation SHS Bancorp Inc. 15.37 57.80
10/27/99 NA Exchange National Bancshares Inc. CNS Bancorp Inc. 27.50 52.29
07/19/99 07/19/99 FBOP Corporation Sterling Savings Bank NA NA
03/01/99 08/06/99 Fifth Third Bancorp Emerald Financial Corporation 33.30 36.68
08/09/99 NA Financial Institutional Partners Mortgage Mission Savings & Loan Association, FA NA NA
12/16/99 NA First Bancorp First Savings Bancorp Inc. 24.87 14.96
06/30/99 10/29/99 First Busey Corporation Eagle BancGroup Inc. 14.81 17.00
11/11/99 NA First Community Bancshares Inc. Blue River Federal Savings Bank 13.66 NA
07/08/99 11/19/99 First M & F Corp. Community Federal Bancorp Inc. 25.97 32.85
11/23/99 NA First Place Financial Corp. Ravenna Savings Bank 12.40 NA
03/12/99 08/27/99 FLAG Financial Corporation Thomaston Federal Savings Bank 22.89 NA
10/18/99 NA FNB Corp. Carolina Fincorp Inc. 24.41 31.96
05/28/99 08/31/99 FNB Financial Services Corporation Black Diamond Savings Bank FSB 14.68 NA
10/21/99 NA Friedman, Billings, Ramsey Group Inc. Money Management Associates NA NA
09/14/99 NA FVNB Corp. Mid-Coast Savings Bank SSB NA NA
09/10/99 NA Glacier Bancorp Inc. Mountain West Bank 20.03 NA
08/11/99 11/05/99 Hamilton Federal Savings & Loan Associate Belmar Federal Savings & Loan Association NA NA
05/17/99 09/03/99 Hudson River Bancorp Inc. SFS Bancorp Inc. 17.85 16.07
01/26/99 05/21/99 Hudson United Bancorp Little Falls Bancorp Inc. 15.79 NA
04/13/99 01/07/00 Independence Community Bank Corp. Statewide Financial Corporation 14.91 19.48
03/24/99 09/15/99 Independent Bank Corp. Mutual Savings Bank FSB 10.91 52.67
07/13/99 NA IndyMac Mortgage Holdings Inc. SGV Bancorp Inc. 12.62 NA
04/26/99 06/30/99 Lehman Brothers Holdings Inc. DSB Bancorp Inc. NA NA
</TABLE>
<PAGE>
Exhibit II
Thrift Acquisitions Announced in 1999
<TABLE>
<CAPTION>
Price/ Book Price/ Earnings
Announcement Announcement
Announced Completion Buyer Name Seller Name (%) (x)
Date Date
<C> <C> <S> <C> <C> <C>
05/26/99 10/15/99 Local Financial Corporation Guthrie Savings Inc. 126.82 20.80
02/02/99 09/30/99 Mahaska Investment Company Midwest Bancshares Inc. 151.07 12.88
03/04/99 06/25/99 Manufacturers Bank of Florida Partners Bank of Florida FSB 157.67 NM
12/03/99 NA Midland States Bancorp Inc. CSB Financial Group Inc. 115.11 41.03
02/04/99 08/31/99 NBC Capital Corporation FFBS BanCorp Inc. 188.10 29.27
08/09/99 12/01/99 NewSouth Bancorp Inc. Green Street Financial Corp. 101.60 21.48
08/30/99 NA Niagara Bancorp Inc. (MHC) Albion Banc Corp. 182.50 40.38
07/13/99 12/10/99 North Central Bancorp Columbus Financial Corporation 188.15 23.75
01/15/99 07/01/99 North Country Savings Bank Canton Federal Savings & Loan Association NA NA
08/16/99 NA North Fork Bancorporation JSB Financial Inc. 153.86 13.84
08/30/99 NA North Fork Bancorporation Reliance Bancorp Inc. 199.06 16.87
10/01/99 NA Northern Star Financial Inc. First Federal Holding Co. of Morris 229.43 19.75
03/11/99 10/01/99 Oak Hill Financial Inc. Towne Financial Corporation 187.93 17.94
02/24/99 07/09/99 Old Kent Financial Corp. CFSB Bancorp Inc. 332.99 20.49
06/03/99 11/30/99 PAB Bankshares Inc. Baxley Federal Savings Bank 129.91 15.32
08/26/99 01/07/00 Peapack-Gladstone Fin. Corp. Chatham Savings FSB 225.01 20.24
09/21/99 NA Peoples Bancorp Three Rivers Financial Corp. 122.32 20.63
10/01/99 NA Peoples Building Loan & Sav. Co. Harvest Home Financial Corporation 160.43 31.03
10/01/99 NA Peoples Building Loan & Sav. Co. Oakley Improved Building & Loan Company (The) NA NA
04/13/99 10/29/99 Phoenix Home Life Mutual Ins. Co. New London Trust FSB NA NA
08/16/99 NA Provident Financial Group Inc. Fidelity Financial of Ohio Inc. 197.00 42.86
08/03/99 12/03/99 Provident Financial Group Inc. OHSL Financial Corp. 209.85 25.57
06/06/99 NA Southwest Securities Group Inc. ASBI Holdings Inc. NA NA
07/01/99 11/12/99 Union Financial Bancshares Inc. South Carolina Community Bancshares Inc. 103.80 23.03
08/03/99 NA Uwharrie Capital Corp. Anson Bancorp Inc. 105.81 59.66
09/15/99 NA Virginia Commonwealth Fin. Co. Caroline Savings Bank 157.87 26.37
12/02/99 NA Webster Financial Corp. MECH Financial Inc. 214.90 16.61
Average: 179.96 25.25
Median: 173.58 24.27
</TABLE>
<TABLE>
<CAPTION>
Price/ Assets
Announcement 1 Day Premium
Announced Completion Buyer Name Seller Name (%) (%)
Date Date
<C> <C> <S> <C> <C> <C>
05/26/99 10/15/99 Local Financial Corporation Guthrie Savings Inc. 20.14 48.33
02/02/99 09/30/99 Mahaska Investment Company Midwest Bancshares Inc. 11.71 43.62
03/04/99 06/25/99 Manufacturers Bank of Florida Partners Bank of Florida FSB 7.52 NA
12/03/99 NA Midland States Bancorp Inc. CSB Financial Group Inc. 25.14 42.22
02/04/99 08/31/99 NBC Capital Corporation FFBS BanCorp Inc. 30.44 8.40
08/09/99 12/01/99 NewSouth Bancorp Inc. Green Street Financial Corp. 36.59 16.19
08/30/99 NA Niagara Bancorp Inc. (MHC) Albion Banc Corp. 15.75 27.27
07/13/99 12/10/99 North Central Bancorp Columbus Financial Corporation 12.14 NA
01/15/99 07/01/99 North Country Savings Bank Canton Federal Savings & Loan Association NA NA
08/16/99 NA North Fork Bancorporation JSB Financial Inc. 36.80 4.36
08/30/99 NA North Fork Bancorporation Reliance Bancorp Inc. 14.45 12.55
10/01/99 NA Northern Star Financial Inc. First Federal Holding Co. of Morris 19.30 NA
03/11/99 10/01/99 Oak Hill Financial Inc. Towne Financial Corporation 16.48 NA
02/24/99 07/09/99 Old Kent Financial Corp. CFSB Bancorp Inc. 27.63 34.62
06/03/99 11/30/99 PAB Bankshares Inc. Baxley Federal Savings Bank 18.44 98.33
08/26/99 01/07/00 Peapack-Gladstone Fin. Corp. Chatham Savings FSB 18.85 NA
09/21/99 NA Peoples Bancorp Three Rivers Financial Corp. 13.72 66.91
10/01/99 NA Peoples Building Loan & Sav. Co. Harvest Home Financial Corporation 16.56 25.22
10/01/99 NA Peoples Building Loan & Sav. Co. Oakley Improved Building & Loan Company (The) NA NA
04/13/99 10/29/99 Phoenix Home Life Mutual Ins. Co. New London Trust FSB NA NA
08/16/99 NA Provident Financial Group Inc. Fidelity Financial of Ohio Inc. 24.06 70.55
08/03/99 12/03/99 Provident Financial Group Inc. OHSL Financial Corp. 20.60 47.54
06/06/99 NA Southwest Securities Group Inc. ASBI Holdings Inc. NA NA
07/01/99 11/12/99 Union Financial Bancshares Inc. South Carolina Community Bancshares Inc. 21.13 22.81
08/03/99 NA Uwharrie Capital Corp. Anson Bancorp Inc. 40.49 42.68
09/15/99 NA Virginia Commonwealth Fin. Co. Caroline Savings Bank 18.98 NA
12/02/99 NA Webster Financial Corp. MECH Financial Inc. 18.79 14.55
Average: 20.80 39.03
Median: 19.14 37.66
</TABLE>
<PAGE>
REVOCABLE PROXY
FIRST PALMETTO FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
___________ __, 2000
- --------------------------------------------------------------------------------
The undersigned hereby constitutes and appoints Samuel R. Small and Charlie
E. Nash, and each of them, the proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Stockholders (the "Annual
Meeting") of First Palmetto Financial Corporation ("First Palmetto"), the
holding company for First Palmetto Savings Bank, F.S.B. (the "Bank"), to be held
at the Bank's main office, 407 DeKalb Street, Camden, South Carolina, on
________, _________ __, 2000, at _____ _.m., local time, and at any adjournments
thereof, and to vote all the shares of stock of First Palmetto which the
undersigned may be entitled to vote, upon the following matters:
FOR WITHHOLD
--- --------
I. The election as directors of the nominees
listed below. [_] [_]
Pierce W. Cantey, Jr.
William R. Clyburn
INSTRUCTION: To withhold your vote for any
nominee(s), write that nominee's name on
the line below.
__________________________________________
FOR AGAINST ABSTAIN
--- ------- -------
II. The approval of a proposal (the [_] [_] [_]
"Reverse Stock Split Proposal") to
amend First Palmetto's Restated
Certificate of Incorporation to effect
a 1-for-125 reverse stock split of
the common stock and to issue
shares of preferred stock in
exchange for shares of common stock held
by any First Palmetto stockholder who,
following the reverse stock
split, would otherwise hold less
than one share of common stock of
record in any separate account.
III. The transaction of such other business as
may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors recommends a vote "FOR" election of the nominees
listed above and "FOR" approval of the Reverse Stock Split Proposal.
- -------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS MARKED HEREIN. IF
NO INSTRUCTIONS TO THE CONTRARY ARE MARKED HEREIN, THIS PROXY WILL BE VOTED FOR
THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED ABOVE, FOR THE REVERSE STOCK
SPLIT PROPOSAL AND AS DETERMINED BY A MAJORITY OF THE BOARD OF DIRECTORS AS TO
OTHER MATTERS AS TO WHICH THIS PROXY CONFERS DISCRETIONARY AUTHORITY.
- -------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder hereby acknowledges receipt of a copy of the
accompanying Notice of Annual Meeting of Stockholders and Proxy Statement and
hereby revokes any proxy or proxies heretofore given. This proxy may be revoked
at any time prior to its exercise.
Dated: ___________________, 2000
__________________________ _____________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ ___________________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the enclosed card. When signing as
attorney, executor, administrator, trustee or guardian, etc., please give your
full title. If the signer is a corporation, please sign the full name by a duly
appointed officer. If shares are held jointly, each holder should sign.
- -------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
