Exhibit 99.1
FOR IMMEDIATE RELEASE FRIDAY, AUGUST 27, 1999
CONTACT:
SJNB Financial Corp., James R. Kenny, (408) 947-7562
Saratoga Bancorp, Richard L. Mount, (408) 973-1111
SJNB FINANCIAL CORP. AND SARATOGA BANCORP
SIGN DEFINITIVE MERGER AGREEMENT
San Jose and Saratoga, CA SJNB Financial Corp. (NASDAQ: SJNB) and
Saratoga Bancorp (OTC BB: SRTB) jointly announced today the signing of a
definitive Merger Agreement under which SJNB will acquire the outstanding shares
of common stock of Saratoga Bancorp pursuant to an exchange of SJNB Common
Stock for all common stock of Saratoga. Saratoga, parent company of Saratoga
National Bank, headquartered in Saratoga, California, with approximately $149
million in assets and $110 million in deposits, operates three offices in
Saratoga, Los Gatos and San Jose, California. The merger between San Jose-
based SJNB and Saratoga Bancorp will result in the formation of a financial
institution with approximately $552 million in assets, $440 million in
deposits and $49 million in shareholders' equity based on each company's
financial position as of June 30, 1999. The combined shareholder base is
estimated to number approximately 2,000.
Upon consummation of the merger Saratoga shareholders will receive 0.70 shares
of SJNB Common Stock for each outstanding share of Saratoga common stock. Based
on the closing price of SJNB's stock on August 27, 1999 of $33.25 the
transaction is valued at approximately $36.9 million, excluding the value of
any unexercised options, and each Saratoga shareholder would receive SJNB
Common Stock valued at $23.28 per share. The estimated value of the SJNB
Common Stock to be received by Saratoga shareholders represents 20.60 times
Saratoga's earnings for the 12
months ended June 30, 1999 and 2.49 times Saratoga's book value per share at
June 30, 1999. The merger will be accounted for as a pooling of interests and
is intended to qualify as a tax-free reorganization.
The definitive Merger Agreement, which has been approved by the Boards of
Directors of both companies, is subject to conditions usual and customary for
merger transactions of this type, including approval by both SJNB and Saratoga
shareholders, approval by the Federal Reserve Board and satisfaction of certain
other terms and conditions. Although the parties have not adopted any formal
timetable, subject to satisfying the conditions in the Agreement, it is
presently estimated that the merger will be consummated late in the fourth
quarter of 1999.
SJNB's banking subsidiary, San Jose National Bank, and Saratoga's banking
subsidiary, Saratoga National Bank, were both formed in 1982. San Jose National
Bank is headquartered in downtown San Jose. It also has an East Bay regional
branch in Danville. San Jose National Bank is primarily a business-oriented
bank while Saratoga National Bank offers personalized banking services to
individuals and businesses. At the completion of the merger of Saratoga
Bancorp into SJNB, it is expected that Saratoga National Bank will also be
combined into San Jose National Bank. When the merger is consummated, certain
directors of Saratoga Bancorp will serve as directors of SJNB and San Jose
National Bank.
Saratoga has also granted SJNB an option to purchase up to 19.9 percent of the
outstanding shares of Saratoga Bancorp common stock if certain events and
conditions (as defined in the option agreement) occur, including a third-
party merger proposal or tender offer.
"We are extremely pleased with this opportunity to combine forces in a manner
which will provide the existing customers of both banks more services while
also allowing us to attract new customers who are currently banking with the
megabanks.
Additionally, many of SJNB's customers live or work in Los Gatos and Saratoga.
We believe they will be delighted by this merger," stated James R. Kenny,
President and Chief Executive Officer of SJNB. "We believe that more customer
options, larger lending limits and other synergies will strengthen the earnings
potential of our company."
"This business combination will allow us to provide our clients a broader range
of products and services while maintaining the characteristics of a community
bank," stated Richard L. Mount, President and Chief Executive Officer of
Saratoga Bancorp. "Management is committed to serving the banking needs of
individuals, businesses and professionals in Saratoga and surrounding
communities. We believe Saratoga shareholders will benefit from increased
dividends, greater liquidity and equity position in a larger financial
institution with a strong track record."
San Jose National Bank provides banking services to businesses and professionals
requiring commercial and SBA loans, real estate construction loans, equipment
leases, accounts receivable financing and factoring services. San Jose National
Bank also offers innovative deposit products, including cash management systems
and home owners association banking services. Saratoga National Bank offers a
wide variety of deposit products, loans and banking services, including Visa
Check Cards, merchant credit cards and payroll services.
This joint release includes forward-looking information which is subject to the
"safe harbor" created by Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements (which involve each company's plans, beliefs and
goals, refer to estimates or use similar terms) involve certain risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Such risks and uncertainties include, but
are not limited to, the following factors: competitive pressure in the banking
industry; changes in the interest rate environment;
the declining health of the economy, either nationally or regionally; the
deterioration of credit quality, which would cause an increase in the provision
for possible loan and lease losses; changes in the regulatory environment;
changes in business conditions, particularly in Santa Clara County real estate
and high tech industries; certain operational risks involving integration of
the two bank subsidiaries, data processing systems or fraud; volatility of
rate sensitive deposits; asset/liability matching risks and liquidity risks;
risks associated with the Year 2000 which could cause disruptions in
either company's operation; and changes in the securities markets. SJNB and
Saratoga undertake no obligation to revise or publicly release the results of
any revision to these forward-looking statements. Readers should carefully
review the risk factors described in other documents SJNB and Saratoga file
from time to time with the Securities and Exchange Commission, including their
respective Annual Reports on Form 10-K for the fiscal year ended December 31,
1998 and their quarterly reports filed on Form 10-Q in 1999.
(NOTE: A registration statement relating to the SJNB Financial Corp. Common
Stock to be exchanged for shares of Saratoga Bancorp common stock will be filed
with the Securities and Exchange Commission ("SEC"). The SJNB Common Stock
may not be exchanged, nor may offers to exchange be accepted, prior to the
time the registration statement becomes effective. This press release shall
not constitute an offer to exchange or the solicitation of an offer to exchange
nor shall there be any exchange of the SJNB Common Stock in any state in which
such offer, solicitation or exchange would be unlawful prior to registration or
qualification under the securities laws of any such state. The SJNB Common
Stock to be exchanged will be offered only by means of a prospectus filed with
the SEC.)