SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X ] Soliciting Material Pursuant to Rule 14a-12
[ ] Confidential, For use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
HARBOR FEDERAL BANCORP, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which
transaction applies:
________________________________________________________________
2. Aggregate number of securities to which transaction
applies:
________________________________________________________________
3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated and state
how it was determined):
________________________________________________________________
4. Proposed maximum aggregate value of transaction:
________________________________________________________________
5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
____________________________________________
PROVIDENT BANKSHARES CORPORATION ANNOUNCES ACQUISITION
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OF HARBOR FEDERAL BANCORP, INC.
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For Release: Thursday May 4, 2000
PROVIDENT BANKSHARES
Media Contact: Vicki Cox 410-277-2063
Investor Contact: Ellen Grossman 410-277-2889
HARBOR FEDERAL
Contact: Robert N. Williams 410-296-1010
BALTIMORE(May 3, 2000)-Provident Bankshares Corporation
(NASDAQ:PBKS), the parent company of Provident Bank, the second
largest independent commercial bank headquartered in Maryland,
and Harbor Federal Bancorp, Inc.(NASDAQ:HRBF), the parent
company of Harbor Federal Savings Bank, announced today the
signing of a definitive agreement under which Provident will
acquire Harbor Federal.
Harbor Federal operates nine offices in the City of
Baltimore and the Counties of Baltimore and Anne Arundel in
Maryland. At March 31, 2000, Harbor had total assets of $244
million and total deposits of $181 million.
The acquisition enhances Provident Bank's market share in
Maryland and builds upon the corporation's strategy to expand
into attractive, existing and contiguous markets. Under the
terms of the transaction, Provident will exchange 1.256 shares
of its common stock for each share of Harbor common stock
outstanding. Approximately two million shares are expected to
be issued in the transaction. Provident will utilize
repurchased shares for a portion of this transaction. The
transaction is valued at approximately $32 million. The merger,
which will be accounted for as a purchase, is expected to be
completed in the third quarter of 2000.
Provident Bankshares Corporation Chairman and Chief
Executive Officer Peter M. Martin welcomed Harbor Federal to the
Provident family. "This acquisition will extend our branch
network and increase our already strong presence in the
Baltimore metropolitan area. Additionally, the purchase allows
us to add a branch in Anne Arundel County where we are already
expanding with traditional and in-store locations. Provident
will continue to look for other quality acquisitions as part of
our business strategy to increase market share and enhance our
value to shareholders."
Provident Bank has already expanded into the Greater
Washington area following the acquisition of First Citizens
Financial Corporation in 1997. Provident's branches now stretch
beyond Baltimore into Frederick, Montgomery and Prince George's
Counties of Maryland as well as into Northern Virginia and
southern Pennsylvania.
Harbor Federal President Robert N. Williams commented on
the acquisition. "We believe this transaction is a terrific
opportunity for our shareholders and customers. The
complementary strategies and markets of our two companies make
this a natural fit and maximize Harbor shareholder value."
Because of branch consolidations and expanded product base
offerings, Provident anticipates cost savings opportunities.
Provident expects the merger to be accretive to earnings per
share in 2001.
TERMS OF THE MERGER
Under the terms of the agreement, Harbor shareholders will
receive a fixed exchange ratio of 1.256 shares of Provident
common stock in exchange for each share of Harbor common stock,
plus cash in lieu fractional shares. The transaction is
expected to be tax-free to Harbor shareholders. The Merger
Agreement is final and definitive. However, should the price of
Provident's shares decline beyond a specified price and index,
the transaction may be terminated unless Provident elects to
increase the exchange ratio. The merger is subject to certain
conditions, including the approval of Harbor's shareholders and
regulatory approval.
PRICING SUMMARY
Price to normalized trailing 4Q earnings 14.8
Price to 3/31/00 book value 120%
Premium to 5/02/00 Harbor market price 28%
Provident Bankshares Corporation is the holding company for
Provident Bank, the second largest independent commercial bank
headquartered in Maryland. With more than $5.2 billion in
assets, Provident serves individuals and businesses in the
dynamic Baltimore-Washington corridor through a full range of
financial services and a network of 87 offices in Maryland,
Northern Virginia and southern York County, PA. Provident Bank
offers related financial services through its wholly owned
subsidiaries, including mortgages through Provident Mortgage
Corp., mutual funds, annuities and insurance products through
Provident Investment Center and leases through Court Square
Leasing and Provident Lease Corp. Visit Provident on the web at
www.provbank.com
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This news release contains certain forward looking statements
about the proposed merger of Provident and Harbor. These
statements include statements regarding the anticipated closing
date of the transaction, anticipated cost savings, and
anticipated future results. Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical or current facts. They often include words like
"believe," "expect," "anticipate," "estimate," and "intend"
or future or conditional verbs such as "will," "would,"
"should," "could" or "may." Certain factors that could
cause actual results to differ materially from expected include
delays in completing the merger, difficulties in achieving cost
savings from the merger or in achieving such cost savings within
the expected time frame, difficulties in integrating Provident
and Harbor, increased competitive pressures, changes in the
interest rate environment, changes in general economic
conditions, legislative and regulatory changes that adversely
affect the business in which Provident and Harbor are engaged,
and changes in the securities markets.
Provident and Harbor will be filing a proxy statement/prospectus
and other relevant documents concerning the merger with the
Securities and Exchange Commission (SEC). WE URGE INVESTORS TO
READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain the documents
free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by Provident will be available free
of charge from the Secretary of Provident at 114 East Lexington
Street, Baltimore, Maryland, 21202, telephone (410) 277-7000.
Harbor will be available free of charge from the Secretary of
Harbor at 705 York Road, Baltimore, Maryland, 21204, (410)
321-7041. READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE
MAKING A DECISION CONCERNING THE MERGER.
Harbor and its directors may be soliciting proxies from Harbor
shareholders in favor of the merger. Harbor's Board of
Directors is composed of J. Kemp Roche, Gideon N. Stieff, Jr.,
Joseph J. Lacy, John H. Riehl, III, Lawrence W. Williams and
Robert N. Williams. In addition, the following executive
officers of Harbor may be soliciting proxies from Harbor
shareholders in favor of the merger: Norbert J. Luken and Thomas
F. Costantini, Jr. None of these persons is the beneficial
owner of more than 1% of the outstanding shares of Harbor common
stock, except as follows: Mr. Stieff, 22,779 shares(1.37%); Mr.
Lacy, 29,940 shares (1.80%); Mr. L. Williams, 33,559 shares
(2.027%); Mr. R. Williams, 62,250 shares (3.74%); Mr. Luken,
67,867 shares (4.08%). These amounts do not include shares that
may be acquired upon the exercise of outstanding stock options.
Collectively, the directors and these executive officers of
Harbor may be deemed to beneficially own 419,150 shares
(25.187%) of Harbor's outstanding shares of common
stock. This includes shares that may be deemed to be
beneficially owned as a result of certain directors serving as
trustees of certain benefit plans and shares that may be
purchased pursuant to the exercise of stock options. This
ownership information is as of March 31, 2000.