Mail-Stop 4561
February 16, 2007
(Via facsimile and U.S. Mail)
Mr. David J. O`Connor
President and Chief Executive Officer
New England Bancshares, Inc.
855 Enfield Street
Enfield, Connecticut 06082
Re: New England Bancshares, Inc.
Registration Statement on Form S-4
Filed January 17, 2007
File Number 333-140031
Dear Mr. O`Connor:
We have reviewed your Form S-4 and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information we may have additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
General
1. Please advise the staff whether First Valley provided financial
projections to New England Bancshares.
Cover Page
2. Please indicate the number of shares to be issued. See Item
501(b)(2) of Regulation S-K.
Questions and Answers ..., page 1
3. Revise to first Q&A to add a cross-reference to direct readers
to
the Merger Agreement included as Annex A.
4. Revise the last question on page 1 regarding dissenters` rights
to
include what is required in the Notice that must be delivered,
such
as the addressee and what must be stated in the Notice.
Summary
The Companies, page 4
5. Revise to indicate when and where each company was incorporated
and commenced business operations.
First Valley Bancorp`s Financial Advisor ... , page 6
6. Supplementally provide the staff with the materials, e.g.,
Boardbooks, provided by Ostrowski to the Board relating to the
merger.
Termination Fee, page 7
7. Revise to list the circumstances under which a termination fee
is
payable herein or add a cross-reference herein to a complete
discussion elsewhere in the proxy.
Tax Consequences of the Merger, page 8
8. Revise to ad clarification as to how the "gain" would be
calculated. If the calculation is overly complicated , provide an
illustration.
Risk Related to the Merger, page 8
9. Revise the preamble to indicate that the discussion below
includes
all known material risks.
Description of the Merger
Background of the Merger, page 23
10. Please revise to disclose the negotiation of the principal
term
of the transaction, including price.
11. Noting that both companies began meeting around May 1, 2006,
revise to disclose when First Valley shareholders were notified
that
the Company was contemplating an affiliation and how they were
notified.
12. Revise the first paragraph on page 25 to disclose what were
the
material business terms that agreement had not been reached on.
13. Revise to disclose whether or nor the Director resignation was
related to the merger and if the resigning Director had taken any
position on the merger.
First Valley Bancorp`s Reasons for the Merger..., page 25
14. All of the factors listed appear to be positive factors. Did
the
Board consider the lower and declining ratios of Return on Average
Assets and Return on Equity? If the Board considered these or
other
negative factors, please revise to add another subsection and list
such negative factors therein. If negative factors were not
considered, so state.
15. Revise to add disclosure as to why First Valley`s Board to not
seek other offers before it determined to enter an agreement with
New
England Bancshares.
Summary of Proposal, page 29
16. In the interest of helping shareholders to more fully
understand
how the Merger Consideration was derived, please revise your
filing
to quantify and clarify the "non-recurring income and expense
items"
which were removed from earnings to arrive at "trailing twelve
months
core earnings" for First Valley Bancorp.
Backup Withholding, page 35
17. Noting the disclosure that withholding will be made on the
cash
payments, revise one of or add another question and answer to
disclose this situation.
Interests of Certain Persons in the Merger, page 36
18. Noting the disclosures herein, revise both the Summary section
and the related risk factor, to include a brief discussion of
those
items disclosed herein that are not disclosed in the Summary and
risk
factors, e.g., the $476,000 payment, the Supplemental Retirement,
etc.
Treatment of First Valley Bancorp Stock Options, page 36
19. Revise to quantify the amount to be received pursuant to the
cashout of the options and, if any individual holds over 10% of
the
options, name the individual. In addition, disclose whether or not
the options are vested.
Change in Control and Employment Agreements, page 37
20. Revise to explain the purpose of the $476,000 payment.
21. Revise to quantify the dollar amounts related to the change in
control and employment agreements, name the individuals associated
with each, and, indicate whether this is a change from current
agreements.
Capital Stock, page 40
22. With a view towards additional disclosure, supplementally
advise
the staff as to the reasons for and circumstances of the issuance
of
67,250 shares to New England Bancshares, a price well below the
merger offer. In addition, advise if these shares will be voted
for
the Merger.
Termination Fee, page 46
23. Noting the lesser termination fee associated with shareholder
disapproval of the Merger, revise the termination fee discussion
in
both the Summary section and the Risk Factors to disclose the
circumstances of the lesser termination fee.
Pro Forma Financial Information, page 48
24. Please revise Note B to more fully explain the nature of the
$954,000 in pre-tax transaction costs for First Valley Bancorp.
Specifically, please revise to clarify:
* Whether the line item titled merger-related compensation and
severance includes the payment of $476,000 to First Valley
Bancorp`s
president and chief executive officer upon the closing of the
merger;
and
* Management`s plans for merger related expenses, including but
not
limited to the details of your plan, when you expect to finalize
the
plan and when you expect to record the charges associated with
your
merger activities.
25. Please revise your filing to describe how you intend to
account
for the payment of $476,000 to First Valley Bancorp`s president
and
chief executive officer upon the closing of the merger.
26. We note your pro forma adjustments as disclosed in Note H on
page
54. Please tell us and revise your filing to separately disclose
the
reason(s) for each of these adjustments. In your response, please
specifically address the following:
* tell us if the adjustments reflected in your pro forma financial
statements relating to the accretion of discounts and premiums on
securities, loans, deposits, and borrowings are the result of
differing accounting policies between New England Bancshares, Inc.
and those of First Valley Bancorp, Inc. If so, revise your filing
to
disclose these differing accounting policies, how each accounting
policy is in accordance with GAAP, and why such differences exist;
and
* tell us and revise your filing to disclose the nature of the
line
item "opportunity cost on net cash disbursed at average security
rate
over the applicable period," how this amount was derived, and how
you
determined this to be a pro forma adjustment.
27. We note your pro forma adjustment Note I on page 54 in which
you
expect non-interest expenses to decline 3%. Please tell us how
you
considered Article 11-2(b)(6) of Regulation S-X in support of your
presentation of these amounts as a pro forma adjustment. Please
provide us factually supportable information to justify this
adjustment or revise your filing to remove this adjustment from
your
pro forma financial statements.
Comparison of Rights of Shareholders, page 59
28. Noting the supermajority provisions of New England
Bancshares`s
governance rules as well as other differences in shareholder
rights
that may make an acquisition of the Company more difficult and
therefore, may affect the market price, consider the need for
adding
a risk factor for this effect and any other significant change in
shareholder rights.
New England Bancshares, Inc. Audited Financial Statements
Note 3 - Investments in Available-for-Sale Securities, page F-19
29. We note unrealized losses of $196,000 on your marketable
equitable securities which have been in an unrealized position for
greater than 12 months. We also note your disclosures on page F-
21
regarding such equity securities. Please provide us with an
updated
comprehensive analysis supporting your determination that these
equity securities are not other than temporarily impaired as of
March
31, 2006, September 30, 2006, and through the date of your
response
to this comment. Please refer to SAB Topic 5.M and FSP 115-1.
First Valley Bancorp, Inc. Consolidated Financial Statements as of
September 30, 2006
Consolidated Statements of Income, page F-36
30. We note that you recognized a loss of $86,000 on the sale of
investments during the nine month period ended September 30, 2006.
Please tell us the specific securities you sold, the reasons for
the
sale, and the corresponding unrealized loss positions of these
securities as of December 31, 2005 and 2004, as applicable.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective responsibilities under the Securities Act of 1933 and
the
Securities Exchange Act of 1934 as they relate to the proposed
public
offering of the securities specified in the above
registration statement. We will act on the request and, pursuant
to
delegated authority, grant acceleration of the effective date.
We direct your attention to Rule 461 regarding requesting
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
Direct any questions on accounting matters to John Spitz at
202-551-3484, or to Lisa Haynes, Senior Accountant, at 202-551-
3424.
Please direct any other questions to Michael R. Clampitt at 202-
551-
3434, or to me at 202-551-3698.
Sincerely,
Mark Webb
Branch Chief
Financial Services Group
By fax: Lawrence Spaccasi, Esq.
Muldoon Murphy & Aguggia LLP
5101 Wisconsin Avenue, NW, Suite 400
Washington, DC 20016
Fax number (202) 966-9409
Mr. D. J. O'Connor
New England Bancshares, Inc.
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