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No fee required.
January 7, 2014
Dear Stockholder:
We cordially invite you
The Notice of Annual Meetingan advisory (non-binding) basis, on a proposal to approve the compensation that may be paid or become payable to our named executive officers in connection with the merger and Proxy Statement describea proposal to adjourn or postpone the formal businessspecial meeting, if necessary or appropriate, to be transacted. The business to be conductedsolicit additional proxies in the event that there are insufficient votes at the annual meeting consiststime of the election of two directors andspecial meeting to approve the ratification of the appointment of S.R. Snodgrass, A.C. as the independent registered public accounting firm for the fiscal year ending September 30, 2014. During the annual meeting we will also report on the operations of Standard Financial Corp.
Ourmerger agreement.
considered at the special meeting
.
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STANDARD FINANCIAL CORP.
2640 Monroeville Boulevard
Monroeville, Pennsylvania 15146
(412) 856-0363
NOTICE OF
2014 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On February 18, 2014
Notice is hereby given that the 2014 Annual Meeting of Stockholders of Standard Financial Corp. will be held at the Doubletree Hotel Pittsburgh/Monroeville Convention Center, 101 Mall Boulevard, Monroeville, Pennsylvania 15146, on February 18, 2014 at 9:00 a.m., Eastern time.
The annual meeting is for the purpose of considering and acting upon:
1.The election of two directors;
2.The ratification of the appointment of S.R. Snodgrass, A.C. as the independent registered public accounting firm for the fiscal year ending September 30, 2014; and
such other matters as may properly come before the annual meeting, or any adjournments thereof. The Board of Directors is not aware of any other business to come before the meeting.
Any action may be taken on the foregoing proposals at the annual meeting on the date specified above, or on any date or dates to which the annual meeting may be adjourned. Stockholders of record at the close of business on January 2, 2014, are the stockholders entitled to vote at the annual meeting, and any adjournments thereof.
YOU MAY CHOOSE TO VOTE YOUR SHARES USING THE INTERNET, TELEPHONE OR PROXY CARD VOTING OPTIONS EXPLAINED IN THIS PROXY. ANY PROXY THAT YOU GIVE MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED. YOU MAY REVOKE A PROXY BY FILING A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE WITH THE SECRETARY OF STANDARD FINANCIAL CORP. IF YOU ATTEND THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOUR SHARES ARE NOT REGISTERED IN YOUR NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE MEETING.
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Monroeville, Pennsylvania
January 7, 2014
Proxy Statement
STANDARD FINANCIAL CORP.
2640 Monroeville Boulevard
Monroeville, Pennsylvania 15146
(412) 856-0363
2014 ANNUAL MEETING OF STOCKHOLDERS
February 18, 2014
This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Standard Financial Corp. to be used at the 2014 Annual Meeting of Stockholders of Standard Financial Corp., which will be held at the Doubletree Hotel Pittsburgh/Monroeville Convention Center, 101 Mall Boulevard, Monroeville, Pennsylvania 15146, on February 18, 2014, at 9:00 a.m., Eastern time, and all adjournments of the annual meeting. In this Proxy Statement, the terms “we, “our,” and “us” refer to Standard Financial Corp. unless the context indicates another meaning.
Information About the Notice of Internet Availability of Proxy Materials:
Instead of mailing a printed copy of our proxy materials, including our Annual Report, to each stockholder of record, we have decided to provide access to these materials in a fast and efficient manner via the Internet. This reduces the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders. On January 7, 2014, we began mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to stockholders of record as of January 2, 2014, and we posted our proxy materials on the website referenced in the Notice (http://www.standardbankpa.com/stndproxy). As more fully described in the Notice, stockholders may choose to access our proxy materials on the Internet or may request a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. For those who previously requested printed proxy materials or electronic materials on an ongoing basis, you will receive those materials as you requested.
Proxy Voting
Your vote is important. Please vote your proxy promptly so your shares can be represented, even if you plan to attend the annual meeting. You can vote by Internet, by telephone, or by requesting a printed copy of the proxy materials and using the proxy card. The Notice provided to you contains the necessary codes to vote online or by telephone. If you wish to vote via the Internet, please go to https://www.rtcoproxy.com/stnd. If you wish to vote by telephone, please call 1-866-411-6680 using a touch-tone phone and follow the prompted instructions. You may also vote by mail by requesting a paper proxy card using the instructions provided in the Notice. Finally, you may vote in person at the Annual Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record of our shares of common stock, par value $0.01 per share, as of the close of business on January 2, 2014 are entitled to one vote for each share then held. As of January 2, 2014, there were 2,990,997 shares of common stock issued and outstanding. The presence in person or by proxyholders of a majority of the outstanding shares of Standard common stock entitled to vote. Your failure to vote will have the same effect as a vote against the merger agreement. Please indicate your vote by using the enclosed proxy card or by voting by telephone or internet, even if you currently plan to attend the virtual special meeting. This will not prevent you from voting at the virtual special meeting, but will ensure that your vote is counted. Instructions regarding all three methods of voting are provided on the proxy card.
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Annex A Agreement and Plan of Merger | | | | | | | |
Annex B Opinion of Keefe, Bruyette & Woods, Inc. | | | | | | | |
Aseven if you abstain from voting. Broker non-votes also will be counted for purposes of determining the existence of a quorum. A broker non-vote occurs when a broker, bank or other nominee holding shares of Standard common stock for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the election of directors, a stockholder may cast their vote FOR BOTH NOMINEES proposed by the Board, to WITHHOLD AUTHORITY FOR BOTH NOMINEES or to vote FOR one or morebeneficial owner.
As to the ratification of S.R. Snodgrass, A.C. as our independent registered public accounting firm, a stockholder may: (i) vote FOR the ratification; (ii) vote AGAINST the ratification; or (iii) ABSTAIN from voting on the ratification. The affirmative voteholders of a majority of the votes cast at the annual meeting is required for the ratification of S.R. Snodgrass, A.C. as the independent registered public accounting firm for the fiscal year ending September 30, 2014, without regard to either broker non-votes or proxies marked “ABSTAIN.”
Due to the deregistration of Standard Financial Corp.’s common stock from the reporting requirements of the Securities Exchange Act of 1934, we are no longer required to conduct a non-binding, advisory vote on executive compensation from our stockholders. Accordingly, our Board of Directors determined not to conduct such a vote this year.
As provided in Section D of Article 5 of our Articles of Incorporation, record holders who beneficially own in excess of 10% of the outstanding shares of ourStandard common stock are not entitled to vote anyat the meeting. Failure to return a properly executed proxy card, to vote via telephone or internet, or to vote at the virtual special meeting will have the same effect as a vote against the merger agreement. Broker non-votes and abstentions from voting will have the same effect as voting against the merger agreement.
If you have selected a broker, bank or other intermediary to hold your common stock rather than havingholder of record must vote in the shares directly registered in your name with our transfer agent, Registrar and Transfer Company, you will receive instructions directly from your broker, bank, or other intermediary in order to vote your shares. Your brokerage firm may also provide the ability to votemanner directed by such holder. Check your proxy by telephonecard or online. Please be advised that if you choose not to vote your proxy, your brokerage firm has the authority under applicable stock market rules to only vote your shares “FOR” or “AGAINST” routine matters. The election of directors is deemed to be a non-routine matter. Accordingly, we urge you to vote by following the instructions providedinformation forwarded by your broker, bank or other intermediary.
Personsholder of record to see which options are available to you.
Name and Address |
| Number of |
| Percent of |
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Sandler O’Neill Asset Management, LLC |
| 309,600 | (1) | 10.35 | % |
780 Third Avenue, 5th Floor New York, NY 10017 |
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Standard Bank, PaSB Employee Stock Ownership Plan |
| 277,886 | (2) | 9.29 | % |
2640 Monroeville Boulevard Monroeville, PA 15146 |
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Raffles Associates |
| 239,508 | (3) | 8.01 | % |
2 Penn Plaza, Suite 1920A New York, NY 10121 |
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Wellington Management Company LLP |
| 229,461 | (4) | 7.67 | % |
280 Congress Street Boston, MA 02210 |
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Ithan Creek Master Investors (Cayman) L.P. |
| 167,516 | (5) | 5.60 | % |
c/o Wellington Management Company, LLP |
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280 Congress Street |
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Boston, MA 02210 |
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(1)Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2012.
(2)Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 12, 2013.
(3)Based on a Schedule 13G filed with the Securities and Exchange Commission on October 28, 2010.
(4)Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2013.
(5)Based on a Schedule 13G filed with the Securities and Exchange Commission on May 20, 2013.
REVOCATION OF PROXIES
Stockholders who execute proxies in the form solicited hereby retain the right to revoke them in the manner described below. Unless so revoked, the shares represented by such proxies will be voted atas you have directed. You may vote for, against, or abstain with respect to the annual meeting and all adjournments thereof. Proxies solicited on behalf of our Board of Directors will be voted in accordance with the directions given thereon. You can vote online at www.rtcoproxy.com/stnd, by telephone at 1-866-411-6680 toll-
free on a touch-tone phone, or by requesting a printed copyapproval of the merger agreement, the non-binding, advisory proposal to approve the Merger-Related Executive Compensation and the Adjournment Proposal. If you are the record holder of your shares of Standard common stock and submit your proxy materials and proxy card. Proxies we receive that are signed, but contain no instructions forwithout specifying a voting instruction, your shares will be voted “FOR” the proposals set forthproposal to approve the merger agreement, “FOR” the non-binding, advisory proposal to approve the Merger-Related Executive Compensation and “FOR” the proposal to adjourn the meeting, if necessary, to permit further solicitation of proxies on the proposal to approve the merger agreement. Standard’s Board of Directors unanimously recommends a vote “FOR” approval of the merger agreement, “FOR” the non-binding, advisory Merger-Related Executive Compensation proposal and “FOR” approval of the proposal to adjourn the meeting if necessary to permit further solicitation of proxies on the proposal to approve the merger agreement.
Proxies
PROPOSAL 1 — ELECTION OF DIRECTORS
Our Board of Directors currently consistsand management have regularly reviewed and discussed Standard’s business strategy, performance and financial prospects in the context of seven members,the national and is divided into three classes. Our bylaws providelocal economic environment, developments in the regulation of financial institutions and the competitive landscape. In this connection, Standard’s Board of Directors, its Strategic Planning Committee and Standard’s executive management team undertook extensive efforts to develop and budget for Standard’s mid-to-long business prospects on a standalone basis with the goal of maximizing value for Standard’s stockholders and serving the best interests of Standard’s customers, employees and other constituents. Among other things, these reviews and discussions have included possible strategic initiatives available to Standard for increasing long-term value for Standard’s stockholders, including capital management strategies, potential acquisitions and business combinations involving other financial institutions, or remaining independent. These reviews and discussions also included consideration of the mergers and acquisitions environment, including the multiples and premiums being paid, and an assessment of potential merger partners for Standard. In connection with the evaluation of these strategic alternatives, Timothy Zimmerman who served as Chief Executive Officer of Standard until July 1, 2020, and as Senior Executive Vice President and Chief Operating Officer thereafter, and Andrew Hasley, who served as President of Standard until July 1, 2020, and as President and Chief Executive Officer thereafter, have had, from time to time, informal discussions with representatives of other financial institutions, and have regularly updated the Standard Board of Directors regarding such discussions. Messrs. Zimmerman and Hasley also regularly sought the advice of Standard’s legal advisors throughout the course of these conversations. Ultimately, these efforts resulted in the Standard Board’s determination that one classmaximizing value for all of directors isStandard’s stakeholders would be best achieved through a business combination.
Standard’s executive management met with representatives of KBW to discuss Standard’s strategic alternatives. Also, during that month, at the instruction of the Board, representatives of Standard’s executive management had informal discussions with representatives of three financial institutions (such institutions being referred to in this proxy statement as “Company B”, “Company C” and “Company D”, respectively). Company B and Company D were potential merger of equal partners. Company C had contacted Standard to have informal discussions and to make Standard aware that it would be interested in being considered as a potential business combination partner should Standard determine to pursue such a strategic path. Each of these companies had been previously identified during discussions between Standard’s executive management and KBW as potential partners for a business combination should the Standard Board determine to pursue such a strategic path.
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NOMINEES | |||||||||||||
William T. Ferri |
| Director |
| 68 |
| 2007 |
| 2014 |
| 31,230 | (6) | 1.04 | % |
David C. Mathews |
| Director |
| 58 |
| 2006 |
| 2014 |
| 39,551 | (7) | 1.32 | % |
DIRECTORS CONTINUING IN OFFICE | |||||||||||||
Horace G. Cofer |
| Director |
| 75 |
| 1991 |
| 2015 |
| 10,519 | (8) | * |
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Thomas J. Rennie |
| Director |
| 63 |
| 2008 |
| 2015 |
| 15,619 | (9) | * |
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Timothy K. Zimmerman |
| President, Chief Executive Officer and Director |
| 62 |
| 1993 |
| 2015 |
| 68,318 | (10) | 2.27 | % |
Terence L. Graft |
| Chairman of the Board |
| 63 |
| 1991 |
| 2016 |
| 32,743 | (11) | 1.09 | % |
Dale A. Walker |
| Director |
| 63 |
| 1999 |
| 2016 |
| 20,798 | (12) | * |
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EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS | |||||||||||||
Colleen M. Brown |
| Senior Vice President - Chief Financial Officer |
| 54 |
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| 38,957 | (13) | 1.30 | % |
Paul A. Knapp |
| Senior Vice President - Chief Commercial Lending Officer |
| 59 |
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| 32,086 | (14) | 1.07 | % |
Susan A. Parente |
| Vice President and Controller |
| 51 |
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| 11,865 | (15) | * |
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All directors and executive officers as a group (10 persons) |
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| 301,686 |
| 9.93 | % |
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Directors
The biographies of each of the nominees and continuing board members below contain information regarding the person’s business experience and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that the person should serve as a director. The principal occupation during the past five years of each of our directors is set forth below. All directors have held their present positions for at least five years unless otherwise stated. Each existing director is also a director of Standard Bank.
All of the nominees and directors continuing in office are or were long-time residents of the communities served by Standard Financial Corp. and many of such individuals have operated, or currently operate, businesses located in such communities. As a result, each nominee and director continuing in office has significant knowledge of the businesses that operate in Standard Financial Corp.’s market area, an understanding of the general real estate market, values and trends in such communities and an understanding of the overall demographics of such communities. As the holding company for a community banking institution, Standard Financial Corp. believes that the local knowledge and experience of its directors assists Standard Financial Corp. in assessing the credit and banking needs of its customers, developing products and services to better serve its customers and assessing the risks inherent in its lending operations, and provides Standard Financial Corp. with greater business development opportunities.
Terence L. Graft has served as Chairman of the Board of Standard Bank since 2008. Mr. Graft is the owner of Kepple-Graft Funeral Home located in Greensburg, Pennsylvania and Graft-Jacquillard Funeral Home located in Scottdale, Pennsylvania. He is a member of the National and Pennsylvania Funeral Directors Associations, as well as the Funeral Directors Associations of Armstrong, Westmoreland and Indiana, Pennsylvania. Mr. Graft’s experience as a local business owner and his knowledge of the local business community led to his election to the Board in 1991.
Horace G. Cofer is President of Horace Cofer Associates, Inc., an engineering consulting service located in Murrysville, Pennsylvania. Mr. Cofer’s experience managing a local business and his knowledge of the local business community led to his election to the Board in 1991.
William T. Ferri is a pharmacist and the owner of Ferri Pharmacy located in Murrysville, Pennsylvania. He is the Chief Executive Officer executed and delivered to Dollar its proposed nonbinding indication of Ferri Enterprises, a property development and management company, and the President of Ferri Supermarkets, Inc. He is Director-Secretary of Value Drug Company, a pharmacy wholesale co-op distributor in Altoona, PA, and is also a member of the Pennsylvania Pharmacists Association, the National Association of Retail Pharmacists, the Murrysville Community Economic Development Corporation, the Westmoreland Chamber of Commerce and the Murrysville Business Association. Mr. Ferri’s experience owning a local business and his knowledge of the local business community ledinterest.
David C. Mathews is the Business Development Coordinator of Standard Bank since January 2006. Prior to joining Standard Bank, Mr. Mathews served asDollar. On September 9, 2020, Andrew Hasley, the President and Chief Executive Officer of Hoblitzell National Bank (“HNB”) from 1998 until HNB was acquired by Standard, Bank in January 2006. Mr. Mathews has 34 years of experience in banking. Mr. Mathews is a member ofmet with James McQuade, the Boards of the Western Maryland Health System Foundation and the YMCA of Cumberland, and is also a member of the Frostburg State Business Advisory Board and The Greater Cumberland Committee. Mr. Mathews experience with commercial lending and with the markets served by HNB led to his election to the Board in 2006.
Thomas J. Rennie is a certified public accountant and the owner of a public accounting firm offering tax, accounting and consulting services with offices in Ligonier and Latrobe, Pennsylvania. He is a member and past President of the Ligonier Chamber of Commerce, past President of the Southwest Chapter of the Pennsylvania Institute of Certified Public Accountants and a past President of Ligonier Rotary Club and presently serves on the finance council of St. Benedict Church in Greensburg. Mr. Rennie’s accounting experience and knowledge of the local business community led to his election to the Board in 2008.
Dale A. Walker is a certified public accountant and is the owner of Dale A. Walker, CPA, an accounting firm in Mount Pleasant, Pennsylvania. He is a member of the American and Pennsylvania Institutes of Certified Public Accountants, a director and Treasurer of Penn Laurel Holdings, a real estate investment company, past Chairman of the Board of Excela Health, a not-for-profit health care system in western Pennsylvania, Treasurer of Mount Pleasant Business District Authority and a past president and member of the Mount Pleasant Rotary. Mr. Walker’s accounting experience and knowledge of the local business community led to his election to the Board in 1999.
Timothy K. Zimmerman is President and Chief Executive Officer of Dollar. At that meeting, Mr. Hasley and Mr. McQuade discussed certain logistical matters regarding a potential business combination between Standard and Dollar.
Executive Officers whoInterests of Certain Persons in the Merger that are Different from Yours” beginning on page [•] of this proxy statement.
The principal occupation
interests in the merger that are different from, or in addition to, those of other Standard stockholders. The Standard Board of Directors was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement, and in recommending that the merger proposal be approved by the stockholders of Standard. See “
| ACNB Corporation | | | CB Financial Services, Inc. | |
| MVB Financial Corp. | | | Norwood Financial Corp. | |
| Codorus Valley Bancorp, Inc. | | | Riverview Financial Corporation | |
| Evans Bancorp, Inc. | | | Middlefield Banc Corp. | |
| Chemung Financial Corporation | | | AmeriServ Financial, Inc. | |
| ESSA Bancorp, Inc. | | | Malvern Bancorp, Inc. | |
| Premier Financial Bancorp, Inc. | | | SB Financial Group, Inc. | |
| Penns Woods Bancorp, Inc. | | | Prudential Bancorp, Inc. | |
| Fidelity D & D Bancorp, Inc. | | | Pathfinder Bancorp, Inc. | |
| Farmers & Merchants Bancorp, Inc. | | | CF Bankshares Inc. | |
| Citizens & Northern Corporation | | | Ohio Valley Banc Corp. | |
| LCNB Corp. | | | United Bancshares, Inc. | |
| Meridian Corporation | | | Emclaire Financial Corp | |
| Franklin Financial Services Corporation | | | Cortland Bancorp | |
| FNCB Bancorp, Inc. | | | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | STND | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
MRQ Core Return on Average Assets (%)(1) | | | | | 0.51 | | | | | | 0.59 | | | | | | 0.91 | | | | | | 0.98 | | | | | | 1.21 | | |
MRQ Core Return on Average Tangible Common Equity (%)(1) | | | | | 4.58 | | | | | | 7.31 | | | | | | 10.18 | | | | | | 11.19 | | | | | | 11.99 | | |
MRQ Net Interest Margin (%) | | | | | 2.82 | | | | | | 3.05 | | | | | | 3.26 | | | | | | 3.21 | | | | | | 3.49 | | |
MRQ Fee Income / Operating Revenue (%)(2) | | | | | 17.6 | | | | | | 14.1 | | | | | | 19.0 | | | | | | 24.9 | | | | | | 24.7 | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | STND | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
MRQ Efficiency Ratio (%) | | | | | 61.9 | | | | | | 68.3 | | | | | | 63.9 | | | | | | 63.9 | | | | | | 59.5 | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | STND | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
Tangible Common Equity / Tangible Assets (%) | | | | | 11.15 | | | | | | 7.78 | | | | | | 8.98 | | | | | | 9.06 | | | | | | 10.25 | | |
Total Risk Based Capital Ratio (%) | | | | | 17.93 | | | | | | 12.64 | | | | | | 14.01 | | | | | | 14.35 | | | | | | 15.67 | | |
Loans / Deposits (%) | | | | | 94.7 | | | | | | 81.4 | | | | | | 89.9 | | | | | | 90.2 | | | | | | 93.0 | | |
Loan Loss Reserve / Deposits (%) | | | | | 0.93 | | | | | | 0.96 | | | | | | 1.04 | | | | | | 1.05 | | | | | | 1.13 | | |
Nonperforming Assets / Loans + OREO (%) | | | | | 0.71 | | | | | | 1.49 | | | | | | 1.19 | | | | | | 1.17 | | | | | | 0.56 | | |
MRQ Net Charge-Offs / Average Loans (%) | | | | | 0.02 | | | | | | 0.08 | | | | | | 0.04 | | | | | | 0.10 | | | | | | 0.01 | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | STND | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
One-Year Stock Price Change (%) | | | | | (33.0) | | | | | | (41.2) | | | | | | (33.6) | | | | | | (31.3) | | | | | | (23.0) | | |
Year-to-Date Stock Price Change (%) | | | | | (37.4) | | | | | | (45.4) | | | | | | (38.1) | | | | | | (36.2) | | | | | | (30.5) | | |
One-Year Total Return (%) | | | | | (30.6) | | | | | | (38.9) | | | | | | (30.3) | | | | | | (29.2) | | | | | | (21.0) | | |
Stock Price / Tangible Book Value per Share (x) | | | | | 0.76 | | | | | | 0.72 | | | | | | 0.82 | | | | | | 0.85 | | | | | | 0.93 | | |
Stock Price / LTM EPS (x) | | | | | 12.8 | | | | | | 8.0 | | | | | | 9.1 | | | | | | 9.6 | | | | | | 11.4 | | |
Price / 2020 EPS (x) | | | | | — | | | | | | 8.7 | | | | | | 10.1 | | | | | | 11.0 | | | | | | 12.4 | | |
Price / 2021 EPS (x) | | | | | — | | | | | | 9.1 | | | | | | 11.4 | | | | | | 11.2 | | | | | | 13.2 | | |
Price / 2022 EPS (x) | | | | | — | | | | | | 9.6 | | | | | | 12.1 | | | | | | 11.7 | | | | | | 13.9 | | |
Dividend Yield (%) | | | | | 4.7 | | | | | | 2.9 | | | | | | 3.8 | | | | | | 3.7 | | | | | | 5.1 | | |
LTM Dividend Payout Ratio (%) | | | | | 60.1 | | | | | | 21.4 | | | | | | 37.5 | | | | | | 35.3 | | | | | | 46.7 | | |
| Acquiror | | | Acquired Company | |
| Bridge Bancorp, Inc. | | | Dime Community Bancshares, Inc. | |
| Acquiror | | | Acquired Company | |
| Provident Financial Services, Inc. | | | SB One Bancorp | |
| United Community Banks, Inc. | | | Three Shores Bancorporation, Inc. | |
| Enterprise Financial Services Corp | | | Seacoast Commerce Banc Holdings | |
| Blue Ridge Bankshares, Inc. | | | Bay Banks of Virginia, Inc. | |
| | | Dollar / STND | | | Selected Transactions | | ||||||||||||
| | | Median | | | Average | | ||||||||||||
Transaction Value / Tangible Book Value (x) | | | | | 1.34 | | | | | | 1.21 | | | | | | 1.17 | | |
Transaction Value / LTM EPS (x) | | | | | 22.4 | | | | | | 11.5 | | | | | | 12.1 | | |
Core Deposit Premium (%) | | | | | 6.3 | | | | | | 3.3 | | | | | | 1.9 | | |
One-Day Market Premium (%) | | | | | 76.0 | | | | | | 21.4 | | | | | | 13.3 | | |
Paul A. KnappAccountants for Prospective Financial Information, or generally accepted accounting principles (“GAAP”), and are included in this proxy statement only because they were made available to Dollar and KBW in connection with the proposed merger. The prospective financial information included in this proxy statement has been prepared by, and is Senior Vice President — Chief Commercial Loan Officerthe responsibility of, Standard’s management. Standard’s independent registered public accounting firm, S.R. Snodgrass, P.C., did not examine, compile or perform any procedures with respect to the prospective financial information described below and, accordingly, such firm does not express an opinion or any other form of assurance with respect thereto.
| | | At December 31, 2020 (in thousands) | | |||
Cash and equivalents | | | | $ | 44,176 | | |
Securities | | | | | 169,178 | | |
Total loans | | | | | 723,426 | | |
Allowance for loan losses | | | | | (7,756) | | |
Loans receivable, net | | | | | 715,670 | | |
Other assets | | | | | 75,087 | | |
Total Assets | | | | $ | 1,004,109 | | |
Noninterest-bearing deposits | | | | $ | 149,791 | | |
Interest bearing deposits | | | | | 612,641 | | |
Total deposits | | | | | 762,432 | | |
Borrowed funds | | | | | 92,275 | | |
Other liabilities | | | | | 4,266 | | |
Stockholders’ equity | | | | | 145,136 | | |
Total Liabilities & Equity | | | | $ | 1,004,109 | | |
| | | For the Year Ended December 31, 2020 (in thousands) | | |||
Total interest income | | | | $ | 36,493 | | |
Total interest expense | | | | | 7,343 | | |
Provision for loan losses | | | | | 2,958 | | |
Net interest income after provision for loan losses | | | | | 26,192 | | |
Noninterest income | | | | | 4,349 | | |
Noninterest expense | | | | | 21,507 | | |
|
| | | For the Year Ended December 31, 2020 (in thousands) | | |||
Net income before taxes | | | | | 9,034 | | |
Provision for income | | | | | 1,588 | | |
Net income | | | | $ | 7,446 | | |
|
Susan A. Parente is Vice President — Controller of Standard Bank since 1998. Ms. Parente has 27 years of banking and accounting experience. Prior to joining Standard Bank, Ms. Parente worked as Manager of Profit Planning and as a Senior Accountant with Equitable Resources, Pittsburgh, from 1990 to 1998. Prior banking experience includes service as an Internal Auditor and Senior Accountant with Landmark Savings Association, Pittsburgh, from 1985 to 1990. Ms. Parente is a certified public accountant and member of the American and Pennsylvania Institutes of Certified Public Accountants.
Board Independence
The Board of Directors has determined that each of our directors, with the exception of directors Timothy Zimmerman and David Mathews, is “independent” as defined in the listing rules of the Nasdaq Stock Market. Messrs. Zimmerman and Mathews are not independent because they are employees of Standard Bank.
At September 30, 2013, Standard Bank had two loans outstanding to entities in which Director Ferri had an ownership interest, with an aggregate balance of $527,548 and one loan to Director Rennie with a balance of $117,000, respectively. Each of these loans were made in the ordinary course of business and on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the general public, and did not involve more than the normal risk of collectability or present other unfavorable features. At September 30, 2013, Standard Bank had no additional loans outstanding with any of its directors or executive officers.
Board Leadership Structure and Risk Oversight
Our Board of Directors is chaired by Terence L. Graft, who is a non-executive director. This structure ensures a greater role for the independent directors in the oversight of Standard Financial Corp. and Standard Bank and active
participationwill file a subsequent application with the Office of the independent directors in setting agendas and establishing priorities and procedures for the workComptroller of the Board.
Currency to obtain its approval of the charter conversion.
Meetings and Committees of the Board of Directors
The business of Standard Financial Corp. is conducted at regular and special meetings of the full Board and its standing committees. In addition, our independent directors meet in executive sessions. The standing committees consist of the Executive, Audit, Compensation and Nominating and Corporate Governance Committees. During the fiscal year ended September 30, 2013, the Board of Directors of Standard Financial Corp. met at six regular meetings and had no special meetings. No member of the Board or any committee thereof attended fewer than 75% of the aggregate of: (i) the total number of meetings of the Board of Directors (held during the period for which he or she has been a director); and (ii) the total number of meetings held by all committees of the board on which he or she served (during the periods that he served).
The duties and responsibilities of the Executive, Compensation, Audit and Nominating and Corporate Governance Committees are as follows:
Executive Committee. The Board of Directors has delegated to the Executive Committee the power and authority to act on its behalf in between Board meetings. The Board has designated the president and two or more of the other directors to constitute the Executive Committee. The current members of the Executive Committee consist of Director Graft, who serves as Chairman, and Directors Ferri, Mathews, Walker and Zimmerman. The Executive Committee met six times in fiscal year 2013.
Compensation Committee. The Compensation Committee is composed of independent (as defined in the Nasdaq corporate governance listing standards), non-employee directors. The current members of the Compensation Committee consist of Directors Graft, who serves as Chairman, Ferri and Walker. The Compensation Committee has a written charter, which is available on our website at www.standardbankpa.com. The Compensation Committee met three times during the fiscal year ended September 30, 2013.
Pursuant to the Compensation Committee’s Charter, the Compensation Committee approves the compensation objectives for Standard Financial Corp. and Standard Bank and establishes the compensation for the President and Chief Executive Officer and other executives. Our President and Chief Executive Officer provide recommendations to the Compensation Committee on matters of compensation philosophy, plan design and the general guidelines for employee compensation. These recommendations are then considered by the Compensation Committee. However, Mr. Zimmerman does not vote on and is not present for any discussion of his own compensation.
The Compensation Committee, in performing its duties and responsibilities with respect to director and executive officer compensation, relies on the assistance of our Human Resources Department. In addition, during the fiscal year ended September 30, 2013, the Compensation Committee retained Pearl Meyer and Partners to provide market survey salary data and recommendations with respect to Board and senior executive management compensation.
Audit Committee. The Audit Committee consists of Directors Walker, who serves as Chairman, Cofer, Ferri and Rennie. Each member of the Audit Committee is “independent” as defined in the Nasdaq corporate governance listing standards and under Securities and Exchange Commission Rule 10A-3. The Board of Directors has determined that Mr. Walker qualifies as an “audit committee financial expert” as that term is used in the rules and regulations of the Securities and Exchange Commission. Information with respect to the experience of Mr. Walker is included in “—
Directors.” Our Audit Committee has a written charter, which is available on our website at www.standardbankpa.com. The Audit Committeemerger agreement, Standard stockholders should be aware that certain persons, including the directors and executive officers of Standard, Financial Corp. met four times duringhave interests in the fiscal year ended September 30, 2013.
Among other activities, the Audit Committee assists themerger that are in addition to their interests as stockholders of Standard generally. The Standard Board of Directors was aware of these interests as well as others and considered them in overseeingadopting the integrity of our financial statements; overseeing our compliance with legalmerger agreement and regulatory requirements; overseeing the independent registered public accountant’s qualifications and independence; overseeing the performance of our independent registered public accountant and of our internal audit function; and overseeing our system of disclosure controls and system of internal controls regarding finance, accounting, and legal compliance.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee consists of at least three directors who are “independent” as defined in the Nasdaq corporate governance listing standards. The current members of the Nominating and Corporate Governance Committee consist of Directors Cofer, who serves as Chairman, Graft and Rennie. The Nominating and Corporate Governance Committee has a written charter, which is available on our website at www.standardbankpa.com. The Nominating and Corporate Governance Committee of Standard Financial Corp. met one time during the fiscal year ended September 30, 2013.
Pursuant to the Nominating and Corporate Governance Committee charter, the Nominating and Corporate Governance Committee assists the Board of Directors in identifying qualified individuals to serve as Board members, in determining the composition of the Board of Directors and its committees, in monitoring a process to assess Board effectiveness and in developing and implementing our corporate governance guidelines. The Nominating and Corporate Governance Committee also considers and recommends the nominees for director to stand for election at our annual meeting of stockholders.
If the candidate is deemed eligible for election to the Board of Directors, the Committee will consider the following criteria in selecting nominees, astransactions contemplated thereby. As described in more detail in the Committee’s Criteria for Director Nominees:
·contributionbelow, these interests include certain payments and benefits that may be provided to the board;
·experience;
·familiarity withexecutive officers upon completion of the merger, including cash severance payments. The dates and participation in local community;
·integrity;
·stockholdershare prices used below to quantify these interests and dedication; and
·independence.
The Committee will also consider any other factors it deems relevant to a candidate’s nomination, including the extent to which the candidate helps the Board of Directorshave been selected for illustrative purposes only. They do not necessarily reflect the diversitydates on which certain events will occur and do not represent a projection about the future value of our stockholders, employees, customers and communities. The Committee also may considerStandard common stock.
The Committee may weigh the foregoing criteria differently in different situations, depending on the compositiontime of the Board of Directors atmerger, whether or not vested, will be converted into the time. The Board of Directors will maintain at least one director who meets the definition of “audit committee financial expert” under Securities and Exchange Commission regulations.
With respectright to nominating an existing director for re-electionreceive a cash amount equal to the Boardproduct of Directors, the Nominating and Corporate Governance Committee will consider and review an existing director’s board and committee attendance and performance; length of board service; experience, skills and contributions that the existing director brings to the board; and independence.
In addition to meeting these qualifications, a person is not qualified to serve as a director if he or she: (1) is under indictment for, or has ever been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, (2) is a person against whom a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) has been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit, or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency. In addition, no person may serve on the Board of Directors and at the same time be a director or officer of another co-operative bank, credit union, savings bank, savings and loan association, bank, trust company or holding company thereof (in each case whether chartered under state, federal or other law) that engages in business activities in the same market area as Standard Financial Corp. or any of its subsidiaries or in any county contiguous to such market area. At least two-thirds
of the members of the Board of Directors must be residents of Pennsylvania or reside within a 100-mile radius of an office of Standard Bank. No person 75 years or older shall be eligible for election, re-election, appointment or reappointment to the Board of Directors, unless such person was a director of Standard Bank on June 1, 1998.
The Committee does not have a formal policy or specific guidelines regarding diversity among Board members, and generally views and values diversity from the perspective of professional and life experiences, as well as geographic location, representative of the markets in which we do business. The Committee recognizes that diversity in professional and life experiences may include consideration of gender, race, or national origin, in identifying individuals who possess the qualifications that the Committee believes are important to be represented on the Board.
Procedures for the Recommendation of Director Nominees by Stockholders. The Nominating and Corporate Governance Committee has adopted procedures for the submission of recommendations for director nominees by stockholders. If a determination is made that an additional candidate is needed for the Board of Directors, the Nominating Committee will consider candidates recommended by our stockholders. Stockholders can submit the names of qualified candidates for Director by writing to us at 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146, Attention: Corporate Secretary. The Corporate Secretary must receive a submission for consideration for the 2015 Annual Meeting of Stockholders by no later than July 11, 2014.
The submission must include the following information:
·A statement that the writer is a stockholder and is proposing a candidate for consideration by the Nominating and Corporate Governance Committee;
·The name and address of the stockholder as they appear on our books, and number of shares of our common stock that are owned beneficially by the stockholder (if the stockholder is not a holder of record, appropriate evidence of the stockholder’s ownership will be required);
·The name, address and contact information for the candidate, and the number of shares of Standard common stock subject to such option at the closing and (ii) an amount equal to the excess, if any, of $33.00 over the exercise price per share of such option, net of any cash which must be withheld under federal and state income and employment tax requirements. As of the record date, the directors and executive officers of Standard Financial Corp. thatand Standard Bank as a group held options to purchase an aggregate of 7,995 shares of Standard common stock. If none of such options are owned by the candidate (if the candidate is not a holder of record, appropriate evidenceexercised prior to completion of the candidate’s share ownership should be provided);merger, the directors and executive officers of Standard and Standard Bank as a group will receive an aggregate of approximately $131,917 upon conversion of their stock options.
·Such other information regarding the candidate as would be required to be included in the proxy statement pursuant to Securities and Exchange Commission Regulation 14A;
·A statement detailing any relationship between the candidate and any customer, supplier or competitormerger agreement, each outstanding share of Standard Financial Corp.;
·Detailed information aboutrestricted stock will vest in full as of the effective time of the merger and will be entitled to receive the merger consideration, net of any relationship or understanding betweencash which must be withheld under federal and state income and employment tax requirements.. As of the proposing stockholderrecord date, the directors and the candidate;executive officers of Standard and
·A statement that the candidate is willing to be considered and willing to serve Standard Bank as a Director if nominated and elected.
A nomination submitted by a stockholder for presentation by the stockholder atgroup held unvested restricted stock awards representing an annual meetingaggregate of stockholders must comply with the procedural and informational requirements described in our Bylaws.
Stockholder Communications with the Board. A stockholder8,172 shares of Standard Financial Corp. who wants to communicate with the Board of Directors or with any individual director may write to: Board of Directors, Standard Financial Corp., 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146, Attention: Corporate Secretary. The letter should indicate that the author is a stockholder of Standard Financial Corp. and, if shares are not held of record, should include appropriate evidence of stock ownership. Depending on the subject matter, management will:common stock. See “—
·Forward the communication to the Director or Directors to whom it is addressed;
·Attempt to handle the inquiry directly (for example, where it is a requestMerger-Related Executive Compensation for information about Standard Financial Corp. or it is a stock-related matter); or
·Not forward the communication if it is primarily commercial in nature, relates to an improper or irrelevant topic, or is unduly hostile, threatening, illegal or otherwise inappropriate.
At each Board orStandard’s Named Executive Committee meeting, the Corporate Secretary shall present a summary of all communications received since the last meeting that were not forwarded and make those communications available to the Directors on request.
OfficersAttendance at Annual Meetings of Stockholders
Although we do not have a formal written policy regarding director attendance at annual meetings of stockholders, it is expected that directors will attend these meetings absent unavoidable scheduling conflicts. Six directors attended the 2013 Annual Meeting of Stockholders.
Code of Ethics
The Board of Directors has adopted a Code of Ethics for Senior Officers that is applicable to our senior financial officers, including our principal executive officer, principal financial officer, principal accounting officer and all officers performing similar functions. A copy of the Code of Ethics for Senior Officers can be found in the “Investor Relations — Corporate Governance” section of our website, www.standardbankpa.com.
Audit Committee Report
The Audit Committee has issued a report that states as follows:
·we have reviewed and discussed with management and the independent registered public accounting firm our audited consolidated financial statements” for the fiscal year ended September 30, 2013;
·we have discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, as amended; and
·we have received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communication with the Audit Committee concerning independence, and have discussed with the independent registered public accounting firm their independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013 for filing with the Securities and Exchange Commission. This report has been provided by the Audit Committee, which consists of Directors Walker (Chairman), Cofer, Ferri and Rennie.
Section 16(a) Beneficial Ownership Reporting Compliance
Our common stock was registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 during most of fiscal 2013. The officers and directors of Standard Financial Corp. and beneficial owners of greater than 10% of our shares of common stock (“10% beneficial owners”) were required to file reports on Forms 3, 4 and 5 with the Securities and Exchange Commission disclosing beneficial ownership and changes in beneficial ownership. Securities and Exchange Commission rules require disclosure in our Proxy Statement and Annual Report on Form 10-K of the failure of an officer, director or 10% beneficial owner of the shares of our common stock to file a Form 3, 4 or 5 on a timely basis. Based on our review of such ownership reports, we believe that no officer, director or 10% beneficial owner of Standard Financial Corp. failed to file such ownership reports on a timely basis for the fiscal year ended September 30, 2013.
Executive Officer Compensation
Summary Compensation Table. The table below summarizes the total compensation paid to or earned by our named executive officers for the fiscal years ended September 30, 2013 and 2012.
Name and Principal Position |
| Year |
| Salary(1) |
| Bonus(2) |
| Stock |
| Option |
| Non-Equity |
| Nonqualified |
| All Other |
| Total |
| ||||||||
Timothy K. Zimmerman |
| 2013 |
| $ | 282,140 |
| $ | 62,420 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 18,851 | (4) | $ | 363,411 |
|
President and Chief Executive Officer |
| 2012 |
| 279,320 |
| 60,000 |
| 465,300 |
| 107,160 |
| — |
| — |
| 15,840 |
| 927,620 |
| ||||||||
Colleen M. Brown |
| 2013 |
| 153,000 |
| 26,759 |
| — |
| — |
| — |
| — |
| 10,115 | (5) | 189,874 |
| ||||||||
Senior Vice President and Chief Financial Officer |
| 2012 |
| 134,000 |
| 25,000 |
| 198,000 |
| 45,600 |
| — |
| — |
| 7,031 |
| 409,631 |
| ||||||||
Paul A. Knapp |
| 2013 |
| 106,100 |
| 13,528 |
| — |
| — |
| — |
| — |
| 12,749 | (6) | 132,377 |
| ||||||||
Senior Vice President and Chief Commercial Lending Officer |
| 2012 |
| 103,000 |
| 15,643 |
| 132,825 |
| 30,400 |
| — |
| — |
| 8,166 |
| 290,034 |
| ||||||||
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Stock Awards and Option Awards — Additional Information. Amounts included in the “Stock Awards” and “Option Awards” columns for the fiscal year ended September 30, 2012, represent grants under our 2012 Equity Incentive Plan. Securities and Exchange Commission regulations require that we report the full grant date fair value of shares of restricted stock and stock options in the year in which such grants are made. The restricted stock grants are not recognized as incomeamounts payable to the named executive officers untilfor unvested restricted stock, based on assumptions described in that section.
Outstanding Equity Awards at Fiscal Year-End. The following table sets forth information with respectDirectors elects not to our outstanding equity awards for our named executive officers forextend the fiscal year ended September 30, 2013.
Outstanding Equity Awards at Fiscal Year-End(1)
|
| Option Awards |
| Stock Awards |
| ||||||||||||
Name |
| Number of |
| Number of |
| Equity |
| Option |
| Option |
| Number of |
| Market |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Timothy K. Zimmerman, |
| 14,100 |
| 56,400 |
| — |
| $ | 16.50 |
| 7/25/2022 |
| 22,560 |
| $ | 411,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Colleen M. Brown, |
| 6,000 |
| 24,000 |
| — |
| $ | 16.50 |
| 7/25/2022 |
| 9,600 |
| $ | 175,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Paul A. Knapp, |
| 4,000 |
| 16,010 |
| — |
| $ | 16.50 |
| 7/25/2022 |
| 6,440 |
| $ | 117,530 |
|
(1)All equity awards noted in this table were granted pursuant toterm of the Standard Financial Corp. 2012 Equity Incentive Plan, and represent all awards held at September 30, 2013 by our Named Executive Officers.
(2)All option awards and stock awards vest at a rate of 20% per year, commencingagreement, the term will end on the firstsecond anniversary of the date of grant.
(3)The market value of unvested stock awards is based on the closing price of Standard Financial Corp.’s common stock on September 30, 2013 of $18.25.
Employment Agreements. Standard Financial Corp. and Standard Bank entered into an employment agreement with each of Timothy K. Zimmerman, Colleen M. Brown and Paul A. Knapp (referred to below as the “executives” or “executive”) effective October 6, 2010. Our continued success depends to a significant degree on the skills and competence of these officers, and the employment agreements are intended to ensure that we maintain a stable management base following the offering. The discussion below addresses the employment agreements entered into with the executives.
The employment agreement with Mr. Zimmerman provides for a three-year term and the employment agreements with Ms. Brown and Mr. Knapp provide for a two-year term, subject to daily renewal. The current base salaries are $290,604 for Mr. Zimmerman, $157,600 for Ms. Brown and $108,200 for Mr. Knapp. The agreements also provide for participation in employee benefit plans and programs maintained for the benefit of senior management personnel, including discretionary bonuses, participation in stock-based benefit plans, and certain fringe benefits as described in the agreements.
Upon termination of an executive’s employment for cause, as defined in each of the agreements, the executive will receive no further compensation or benefits under the agreement. If we terminate the executive for reasons other than for cause or if the executive terminates voluntarily under specified circumstances that constitute a good reason constructive termination (as defined in each of the agreements), the executive will receive an amount equal to the base salary, cash bonus and employer contributions to benefit plans that would have been payable for the remaining term of the agreement, payable in a lump sum. We will also continue to pay for each executive’s life, health, vision and dental coverage for up to three years (two years for Ms. Brown and Mr. Knapp), with the executive responsible for his or her share of the employee insurance premium.
non-renewal.
three times (two times for Ms. Brown and Mr. Knapp) annual compensation (as defined in each of the agreements, and includes taxable income and employer contributions to tax-qualified and non-qualified deferred compensation plans) that would have been payable for 36 months (24 months for Ms. Brown and Mr. Knapp), payable in a lump sum. We will also continue to pay for each executive’s life, health, vision and dental coverage for up to three years (two years for Ms. Brown and Mr. Knapp), with the executive responsible for the executive’s share of the employee insurance premium.
Upon termination of employment that would entitle the executive to a severance payment (other than a termination in connection with a change in control), the executive will be required to adhere to a one-year non-competition provision. The executive will be required to release us from any and all claims in order to receive any payments and benefits under their agreements. We will agree to pay all reasonable costs and legal fees of the executives in relation to the enforcement of the employment agreements, provided the executives succeed on the merits in a legal judgment, arbitration proceeding or settlement. The employment agreements also provide for indemnification of the executives to the fullest extent legally permissible.
Assuming the executives had been terminated in connection with a change in control, Mr. Zimmerman, Ms. Brown and Mr. Knapp would have received aggregate severance payments of approximately $1,118,000, $397,000 and $272,000, respectively, based upon each executive’s current level of compensation.
Change in Control Agreements. Standard Bank entered into change-in-control agreements with three additional officers effective October 6, 2010. The change-in-control agreements provide a benefit in the event of involuntary termination of employment or resignation for a good reason (as defined in each of the agreements) equal to two times the sum of the executive’s annual base salary andas of the date of termination of employment plus two times the highest bonus earned duringby the priorexecutive in the three calendar years immediately preceding the year of termination of employment, payable in a lump sum andwithin ten (10) days following the continuationdate of non-taxabletermination. Standard, or its successor, will also continue to pay the executive’s medical, vision and dental coverage for eighteen (18) months.
Cash Incentives/Bonuses. The purpose of offering cash incentives isamended (“Section 280G”) that are payable to provide structured annual cash award opportunities to key management personnel for their contributionsor with respect to the achievementexecutive and contingent upon a “change in control” within the meaning of strategic organizational objectivesSection 280G do not exceed three times the executive’s “base amount” within the meaning of Section 280G.
Phantom Stock Agreements. Standard Bank entered into substantially identical Phantom Stock Appreciation Rights Agreements (“Phantom Stock Agreement”) with executives and directors in 2002 to provide participants with an incentive opportunity to share in Standard Bank’s performance and value creation. Directors Graft, Walker, Cofer and our Named Executive Officers, Mr. Zimmerman, Ms. Brown and Mr. Knapp, have each entered into a Phantom Stock Agreement. Under each Phantom Stock Agreement, a participant was initially credited with a one-time allocation of phantom stock. Phantom stock is used solely as a measurement tool and it represents a hypothetical sharePresident of Standard Bank, (“Phantom Stock”). Each year, a participant’s phantom stock account is credited with a dollar amount equalbase salary of $345,000; Mr. Zimmerman has been offered the position of Senior Vice President and Chief Operating Officer of Standard Bank, with a base salary of $250,000; and Ms. Parente has been offered the position of Senior Vice President and Chief Financial Officer of Standard Bank, with a base salary of $212,000 (or, if higher, her base salary as in effect on the effective date of the merger). Under the offer letters, if an executive’s employment is involuntarily terminated by Standard Bank prior to the annual appreciation infirst anniversary of the Phantom Stock share price times the number of shares of Phantom Stock initially credited to the participant. The Phantom Stock share price is determined by dividing the Capital Account,Effective Date for any reason other than for cause as defined in the Phantom Stock Agreement,agreement, then, subject to the executive signing a release of claims, the executive will be entitled to a lump sum severance payment equal to the base salary the executive would have received for the remainder of the 12-month period ending on the first anniversary of the effective date of the merger. Assuming the executives’ employment is terminated immediately following the effective time of the merger, the executive would be entitled to a lump sum severance payment equivalent to the base salary the executive would have received through the 12-month period ending on the first anniversary of the effective date of the merger of $345,000 (for Mr. Hasley), $250,000 (for Mr. Zimmerman) and $212,000 (for Ms. Parente).
Named Executive Officers | | | Cash ($)(1) | | | Equity ($)(2) | | | Pension/ NQDC($)(3) | | | Perquisites/ Benefits ($) | | | Total ($) | | |||||||||||||||
Andrew W. Hasley | | | | | 1,906,539 | | | | | | — | | | | | | 49,067 | | | | | | — | | | | | | 1,955,606 | | |
Timothy K. Zimmerman | | | | | 1,884,469 | | | | �� | | — | | | | | | — | | | | | | — | | | | | | 1,884,469 | | |
Susan A. Parente | | | | | 1,119,800 | | | | | | 39,072 | | | | | | — | | | | | | — | | | | | | 1,158,872 | | |
| | | Restricted Stock ($) | | |||
Andrew W. Hasley | | | | | — | | |
Timothy K. Zimmerman | | | | | — | | |
Susan A. Parente | | | | | 39,072 | | |
| | | Individual SERP ($) | | |||
Andrew W. Hasley | | | | | 49,067 | | |
distribution elections, commencing on January 1, 2012. A participant’s interestCertain of Standard’s senior executive officers and each of its directors, in his or her phantomcapacity as a Standard stockholder, has entered into a separate voting agreement with Dollar, pursuant to which each such director or officer has agreed to vote all shares of Standard common stock account vested over 5 years,which he or she exercises disposition and voting rights in favor of the approval of the merger agreement and the merger and certain related matters and against alternative transactions. Under the voting agreements, Standard’s directors and officers may not, without the prior written consent of Dollar, transfer any of their shares of Standard common stock except for certain limited purposes described in the voting agreements. These voting agreements will terminate if the merger agreement is terminated. As of the record date, shares constituting 10.12% of the voting power of Standard common stock were subject to the voting agreements.
Name and Address | | | Number of Shares Owned | | | Percent of Common Stock Outstanding(1) | | ||||||
Standard Bank, PaSB Employee Stock Ownership Plan 2640 Monroeville Blvd. Monroeville, Pennsylvania 15146 | | | | | 253,588(2) | | | | | | 5.22% | | |
| | | Number of Shares Owned | | | Number of Shares That May Be Acquired Within 60 Days By Exercising Options | | | Percent of Common Stock Outstanding(1) | | |||||||||
Directors: | | | | | | | | | | | | | | | | | | | |
William T. Ferri | | | | | 45,160(2) | | | | | | — | | | | | | * | | |
Terence L. Graft | | | | | 50,371(3) | | | | | | — | | | | | | 1.06% | | |
Andrew W. Hasley | | | | | 49,162(4) | | | | | | — | | | | | | 1.03% | | |
Paul A. Iurlano | | | | | 28,162(5) | | | | | | — | | | | | | * | | |
John M. Lally | | | | | 32,793 | | | | | | — | | | | | | * | | |
Jennifer H. Lunden | | | | | 5,996 | | | | | | — | | | | | | * | | |
David C. Mathews | | | | | 60,477(6) | | | | | | — | | | | | | 1.27% | | |
Ronald J. Mock | | | | | 17,126 | | | | | | — | | | | | | * | | |
Thomas J. Rennie | | | | | 21,426(7) | | | | | | 7,995 | | | | | | * | | |
Gregory J. Saxon | | | | | 17,824 | | | | | | — | | | | | | * | | |
R. Craig Thomasmeyer | | | | | 28,164(8) | | | | | | — | | | | | | * | | |
Dale A. Walker | | | | | 26,205(9) | | | | | | — | | | | | | * | | |
Timothy K. Zimmerman | | | | | 82,340(10) | | | | | | — | | | | | | 1.72% | | |
Executive Officers Who Are Not Directors: | | | | | | | | | | | | | | | | | | | |
Susan A. Parente | | | | | 17,982(11) | | | | | | — | | | | | | * | | |
John P. Kline | | | | | 1,147(12) | | | | | | — | | | | | | * | | |
Susan M. DeLuca | | | | | 9,584(13) | | | | | | — | | | | | | * | | |
Christian M. Chelli | | | | | 7,190(14) | | | | | | — | | | | | | * | | |
Sheila D. Crystaloski | | | | | 23,898(15) | | | | | | — | | | | | | * | | |
All Directors and Executive Officers as a Group (18 persons) | | | | | 525,007 | | | | | | 7,995 | | | | | | 11.16% | | |
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| Exhibit A Form of Voting Agreement | | | | |
of the outstanding shares of Company Common Stock and (iii) is reasonably likely to be completed on the terms proposed, in each case taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal.
The Equity Incentive Plan authorizes the issuance of up to 486,943 shares of Standard Financial Corp. common stock pursuant to grants of restricted stock awards, incentive stock options and non-qualified stock options; provided, however, that the maximum number of shares of Company Common Stock subject to such Company Stock Option, multiplied by the excess of the Merger Consideration over the exercise price per share of such Company Stock Option; provided, however, that there shall be withheld from such cash payment any applicable taxes required to be withheld by applicable law with respect to such payment.
The Equity Incentive Plan is administeredsuch amounts are properly withheld by the membersPaying Agent or Parent, such withheld amounts will be treated for all purposes of Standard Financial Corp.’s Compensation Committeethis Agreement as having been paid to the holder of Company Common Stock in respect of whom such deduction and withholding were made by the Paying Agent or Parent.
Our employeesfranchises, shall continue unaffected by the Merger or the Second Step Merger, and outside directors are eligiblethe separate corporate existence of the Surviving Corporation ceasing as of the Second Effective Time. In furtherance of the foregoing, Parent shall cause to receive awards underbe filed with the Equity Incentive Plan. Awards may be grantedSDAT, in a combinationaccordance with the MGCL, articles of restricted stock awards, incentive stock options and non-qualified stock options.merger (the “
The Committee approved awards under“
Stock awards under the Equity Incentive Plan will be granted only in whole shares of common stock. All restricted stock and stock option grants will be subject to conditions established by the Committee that areeffects set forth in the award agreement. All awardsapplicable provisions of the MGCL.
Tax-Qualified Benefit Plans
401(k) Plan. Standard Bank participates in the Pentegra Financial Institutions Thrift Plan, a multi-employer 401(k) plan, which provides benefits to substantially all of our employees (the “401(k) Plan”). Employees of Standard Bank who are 21 or older and have completed one year of service are eligible to participate in the 401(k) Plan (“Participants”). Participants may contribute up to 50% of their annual compensation to the 401(k) Plan on a pre-tax basis, subject to limits prescribed by law. Standard Bank provides a 401(k) match equal to 50%name of the Participant’s salary deferral onCompany or any of its Subsidiaries or otherwise to take any and all additional actions they deem necessary or advisable.
withdrawal from their accounts in the event they incur a financial hardship. A Participant will become eligible for distribution of his or her 401(k) Plan benefit upon termination of employment and a Participant that satisfies certain eligibility requirements may request distributions of certain portions of their account balance while employed. Participants may elect to receive payments of their benefits in a lump sum or in installments, provided that their account balance equal or exceeds $500. During the fiscal years ended September 30, 2013 and 2012, Standard Bank recognized $87,000 and $91,000, respectively, as a 401(k) Plan expense.
Defined Benefit Pension Plan. Standard Bank participates in the Pentegra Defined Benefit Plan for Financial Institutions Retirement Fund, a multi-employer pension plan (the “Pentegra DB Plan”). Effective August 1, 2005, the annual benefit provided to employees under the Pentegra DB Plan was frozen. Freezing the Pension Plan eliminated all future benefit accruals; however, the accrued benefit as of August 1, 2005 remains. During the fiscal years ended September 30, 2013 and 2012, Standard Bank recognized $152,000 and $165,000, respectively, as pension expense and made $89,000 and $141,000, respectively, as contributions to the Pentegra DB Plan. Standard Bank may maintain or terminate the Pension Plan as circumstances warrant.
Employee Stock Ownership Plan. In connection with the mutual to stock conversion of Standard Mutual Holding Company (the
The ESOP trustee purchased, on behalf of the ESOP, 178,254 shares of Standard Financial Corp. common stock issued in the offering and an additional 100,000 shares in the secondary market, for a total of 278,254 shares. The ESOP funded its stock purchase with a loan from Standard Financial Corp. equalEffective Time (the “New Plans”), to the aggregate purchase price ofextent necessary, Parent agrees to use commercially reasonable efforts to: (i) cause to be waived all pre-existing conditions, exclusions and waiting period with respect to participation and coverage requirements applicable such employees and their eligible dependents under the common stock. The loan is repaid principally through Standard Bank’s contributionNew Plans, except to the ESOPextent such pre-existing conditions, exclusions or waiting period would apply under the analogous Company Employee Plan; (ii) provide each such employee and dividends payable on common stock heldtheir eligible
The trustee holds the shares purchased by the ESOP in an unallocated suspense account, and shares are released from the suspense account on a pro-rata basis as we repay the loan. The trustee will allocate the shares released among participants on the basis of each participant’s proportional share of compensation relative to all participants. Participants will become 100% vested upon the completion of six years of service. Participants who were employed by Standard Bank immediatelysuch employee or dependent prior to the offering receivedEffective Time under a Company Employee Plan (to the same extent that such credit was given under the analogous Company Employee Plan prior to the Effective Time) in satisfying any applicable deductible, co-payment or out-of-pocket requirements under any New Plan; and (iii) provide each Continuing Employee with service credit for eligibility and vesting purposes and solely for yearspurposes of vacation, sick and paid time off policies or arrangements benefit accrual under any New Plan in which Continuing Employees are eligible to participate for all periods of employment with the Company or any its Subsidiaries prior to the Effective Time; provided, however, that the foregoing service recognition shall not apply to the extent it would result in duplication of benefits for the same period of service, prior to adoptionsuch service was not recognized under the corresponding Company Employee Plan, or for benefit accrual purposes under any New Plan, other than vacation, sick and paid time off.
The ESOP permits participantsEffective Time;
Under applicable accounting requirements, we record a compensation expense forFederal Deposit Insurance Act (12 U.S.C. § 1828(k)) and the ESOP atregulations promulgated thereunder by the fair value of the shares as they are committed to be released from the unallocated suspense account to participants’ accounts. The compensation expense resulting from the release of the common stock from the suspense account and allocation to plan participants result in a corresponding reduction in Standard Financial Corp.’s earnings. During the fiscal years ended September 30, 2013 and 2012,Federal Deposit Insurance Corporation (12 C.F.R. Part 359).
a wholly owned Subsidiary of Parent for a period of at least one year following the Effective Time.
Director FeesResignation of Directors. Each director of Standard Financial Corp., other than Messrs. MathewsCompany and Zimmerman, is paid an annual fee of $27,000. The Chairman of the Board of Directors receives an additional $6,800 retainer annually and the Vice Chairman of the Board of Directors receives an additional $3,500 retainer annually. Directors do not receive committee fees, attendance fees or other fees. In addition, Standard Bank has an Eastern Region
Advisory Board. The Advisory Board currently consists of six members, two of whom are employeeseach director of Standard Bank (including Messrs. Mathewswill resign such position with the Company and Zimmerman)Standard Bank by delivering, at least three days prior to Closing, a written letter of resignation to be effective at the Effective Time. Effective at the Effective Time, the persons listed in Section 5.13(b) of the Parent’s Disclosure Letter shall be the directors of the Company and Standard Bank.
Directors’ Summary Compensation Table. The following table sets forth for the fiscal year ended September 30, 2013 certain information as to the total remuneration we paid to our directors. Neither Mr. Zimmerman nor Mr. Mathews receives compensation for service on the Board of Directors.
Director Compensation Table for the Fiscal Year Ended September 30, 2013
Name |
| Fees Earned or |
| Stock |
| Option |
| All Other |
| Total |
| |||
Terence L. Graft |
| $ | 32,250 |
| — |
| — |
| $ | 1,142 |
| $ | 33,392 |
|
Dale A. Walker |
| $ | 29,125 |
| — |
| — |
| $ | 1,142 |
| $ | 30,267 |
|
H.G. Cofer |
| $ | 26,000 |
| — |
| — |
| $ | 1,142 |
| $ | 27,142 |
|
David C. Mathews(2) |
| $ | — |
| — |
| — |
| $ | 189,072 |
| $ | 189,072 |
|
William T. Ferri |
| $ | 26,000 |
| — |
| — |
| $ | 1,142 |
| $ | 27,142 |
|
Thomas J. Rennie |
| $ | 26,000 |
| — |
| — |
| $ | 1,142 |
| $ | 27,142 |
|
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Non-Compete Agreement with David C. Mathews. Standard Bank has entered into a Non-Compete Agreement with Mr. Mathews, which provides that in order to protect the business, confidential and other proprietary informationcurrent directors of Standard Bank listed in Section 5.13(c) of the Parent’s Disclosure Letter shall be offered a position, for a period of two years following histhe Effective Date, on an advisory board (the “Advisory Board”) to be established by Standard Bank. Fees to be paid to Advisory Board members are set forth in Section 5.13(c) of the Parent’s Disclosure Letter; provided, however, that service on the Advisory Board and fees paid to Advisory Board members remain subject to any required regulatory approval.
Section 5.1.
Transactions With Certain Related Persons
The Sarbanes-Oxley Actcertain shares of 2002 generally prohibits us from making loans to our executive officers and directors, but it contains a specific exemption from such prohibition for loans madecommon stock issued by Standard, Bank to our executive officers and directors in compliance with federal banking regulations.
At September 30, 2013, all of $0.01 par value per share (“Standard Bank’s loans to our directors and executive officers were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to Standard Bank, and did not involve more than the normal risk of collectability or present other unfavorable features. These loans were performing according to their original terms at September 30, 2013, and were made in compliance with federal banking regulations. Pursuant to Standard Financial Corp.’s Policy and Procedures for Approval of Related Person Transactions, the Audit Committee periodically reviews, no less frequently than twice a year, a summary of
transactions in excess of $25,000 with directors, executive officers and their family members, for the purpose of determining whether the transactions are in compliance with our policies and should be ratified and approved.
PROPOSAL 2 —
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our independent registered public accounting firm for the fiscal year ended September 30, 2013 was S.R. Snodgrass, A.C. Our Audit Committee has approved the engagement of S.R. Snodgrass, A.C. to be our independent registered public accounting firm for the fiscal year ending September 30, 2014, subject to the ratification of the engagement by our stockholders. At the annual meeting, the stockholders will consider and vote on the ratification of the engagement of S.R. Snodgrass, A.C. for the fiscal year ending September 30, 2014. A representative of S.R. Snodgrass, A.C. is expected to attend the annual meeting to respond to appropriate questions and to make a statement if he or she so desires.
Even if the selection of the independent registered public accounting firm is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines thatCommon Stock”) (all such change is in the best interest of Standard Financial Corp. and its stockholders.
Fees Paid to Independent Registered Public Accounting Firm
Set forth below is certain information concerning aggregate fees billed for professional services rendered by S.R. Snodgrass, A.C. during the fiscal years ended September 30, 2013 and 2012.
|
| 2013 |
| 2012 |
| ||
Audit Fees |
| $ | 83,502 |
| $ | 81,051 |
|
Audit-Related Fees |
| — |
| — |
| ||
Tax Fees |
| $ | 10,519 |
| $ | 10,567 |
|
All Other Fees |
| — |
| — |
|
Audit Fees. Audit fees consist of fees incurred in connection with the audit of our financial statements, the review of the interim financial statements included in our quarterly reports filed with the SEC and the issuance of consents and assistance with, and review of, documents filed with the SEC.
Tax Fees. Tax fees consist of fees incurred in connection with the preparation of state and federal tax returns, assistance with calculating estimated tax payments and other consulting.
The Audit Committee has considered whether the provision of non-audit services, which relate primarily to tax consulting services rendered, is compatible with maintaining the independence of S.R. Snodgrass, A.C. The Audit Committee concluded that performing such services does not affect the independence of S.R. Snodgrass, A.C. in performing its function as our independent registered public accounting firm.
The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accounting firm, either by approving an engagement prior to the engagement or pursuant to a pre-approval policy with respect to particular services. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has delegated pre-approval authority to the Chairman of the Audit Committee when expedition of services is necessary. The independent registered public accounting firm and management are required to report periodically to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. All audit-related fees, tax fees and all other fees described above were approved either as part of our engagements of S.R. Snodgrass, A.C. or pursuant to the pre-approval policy described above.
Vote Required
In order to ratify the selection of S.R. Snodgrass, A.C. as the independent registered public accounting firm for the fiscal year ending September 30, 2014, at least a majority of the votes cast at the annual meeting must vote in favor of such ratification. The Audit Committee of the Board of Directors recommends a vote “FOR” the ratification of S.R. Snodgrass, A.C. as the independent registered public accounting firm for the fiscal year ending September 30, 2014.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
Our Bylaws provide an advance notice procedure for certain business, or nominations to the Board of Directors, to be brought before an annual meeting of stockholders. In order for a stockholder to properly bring business before an annual meeting, or to propose a nominee to the Board of Directors, our Corporate Secretary must receive written notice not earlier than the 90th day nor later than the 80th day prior to date of the annual meeting; provided, however, that in the event that less than 90 days’ notice or prior public disclosure of the date of the annual meeting is provided to stockholders, then, to be timely, notice by the stockholder must be so received not later than the tenth day following the day on which public announcement of the date of such meeting is first made.
The notice with respect to stockholder proposals that are not nominations for director must set forth as to each matter such stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address of such stockholder as they appear on Standard Financial Corp.’s books and of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class or series and number of shares of capital stock of Standard Financial Corp. which are owned beneficially or of record by such stockholderStockholder, the “Existing Shares”); and such beneficial owner; (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.
The notice with respect to director nominations must include (i) as to each individual whom the stockholder proposes to nominate for election
of the date first written above.
| By: Name: Title: | | | | |
Merger, including among other things,
The Board of Directors OTHER MATTERSis— Standard AVB Financial Corp.
September 24, 2020
Page 2 of 4awareindependently verified the accuracy or completeness of any businesssuch information or assumed any responsibility or liability for such verification, accuracy or completeness. We have relied upon the management of Standard as to come before the annual meetingreasonableness and achievability of the financial and operating forecasts and projections of Standard referred to above (and the assumptions and bases therefor), and we have assumed that such forecasts and projections have been reasonably prepared and represent the best currently available estimates and judgments of such management.thanthings, such information have assumed that the matters described aboveongoing COVID-19 pandemic could have a significant adverse impact on Standard. We have relied on all such information without independent verification or analysis and do not in any respect assume any responsibility or liability for the accuracy or completeness thereof.Proxy Statement. However, ifassets, liabilities, financial condition, results of operations, business or prospects of Standard since the date of the last financial statements that were made available to us. We are not experts in the independent verification of the adequacy of allowances for loan and lease losses and we have assumed, without independent verification and with your consent,
and into Dollar Mutual (with Dollar Mutual as the surviving corporation) immediately following the consummation of the Merger and the actions relating to the Standard Bank, PaSB Amended and Restated Employee Stock Ownership Plan to be undertaken in connection with the Merger as provided in the Agreement), including without limitation, the form or structure of the Merger or any such related transaction, any consequences of the Merger or any such related transaction to Standard, its stockholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the Merger, any such related transaction, or otherwise. Our opinion is necessarily based upon conditions as they exist and can be evaluated on the date hereof and the information made available to us through the date hereof. As you are aware, there is currently widespread disruption, extraordinary uncertainty and unusual volatility arising from the effects of the COVID-19 pandemic, including the effect of evolving governmental interventions and non-interventions. It is understood that subsequent developments may affect the conclusion reached in this opinion and that KBW does not have an obligation to update, revise or reaffirm this opinion. Our opinion does not address, and we express no view or opinion with respect to, (i) the underlying business decision of Standard to engage in the Merger or enter into the Agreement, (ii) the relative merits of the Merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by Standard or the Board, (iii) the fairness of the amount or nature of the compensation to any of
The NoticeBoard of Directors — Standard AVB Financial Corp.
September 24, 2020
Page 4 of 4
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Monroeville, Pennsylvania
January 7, 2014
approved by our Fairness Opinion Committee in conformity with our policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.
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