[CFSB BANCORP, INC. LETTERHEAD]
NYSE: OK
NASDAQ-NMS: CFSB
FOR RELEASE: 8:00 A.M.
DATE: FEBRUARY 24, 1999
CONTACTS: OLD KENT FINANCIAL CORPORATION
INVESTOR: ALBERT T. POTAS (616) 771-1931
MEDIA: TANYA BERG (616) 771-4364
CFSB BANCORP, INC (517) 374-3588
ROBERT H. BECKER
OLD KENT WILL ACQUIRE CFSB BANCORP, INC.
Old Kent to Become Number One in Deposit Market Share and
Residential Mortgage Lending in Michigan's State Capital
Grand Rapids, Michigan - David J. Wagner, Chairman, President
and CEO of Old Kent Financial Corporation, and Robert H. Becker,
President and CEO of CFSB Bancorp, Inc., announced today that
they have signed a definitive agreement for the merger of CFSB
Bancorp into Old Kent.
CFSB Bancorp is a holding company headquartered in Lansing,
Michigan, with assets of $880 million and deposits of $587
million as of December 31, 1998. It is the parent of Community
First Bank. CFSB Bancorp provides banking services in the
greater Lansing area through 16 offices in Ingham, Clinton,
Eaton, and Ionia Counties.
This acquisition will triple Old Kent's deposit market share
in Lansing, making Old Kent the leading provider of financial
services in Michigan's fourth largest market. Wagner stated,
"This acquisition underscores Old Kent's commitment to growth
and our confidence in this market. Community First is a quality
banking organization with a culture that is very similar to
ours. We look forward to providing Lansing area customers with
an even broader array of services and the additional convenience
of over 230 offices and 400 ATMs throughout Michigan, Illinois,
and Indiana."
The merger is subject to approval by CFSB Bancorp
shareholders and regulatory agencies. It is expected to be
completed in the third quarter of 1999.
Mr. Becker commented, "We're very pleased to be affiliating
with Old Kent. Their ability to deliver a wide variety of
financial products and services will bring added value to our
customers. Our shareholders will benefit as they become owners
of one of the largest and most reputable financial service
organizations in the country, an organization with a 40 year
history of consecutive annual increases in per share earnings
and dividends."
The merger is intended to be structured as a "pooling-of-
interests" for accounting purposes and as a tax free exchange of
shares. CFSB Bancorp shareholders will receive 5.4 million
shares of Old Kent stock, using an exchange ratio of 0.6222 for
each share of CFSB Bancorp. Old Kent anticipates approximately
$10 million of one-time merger related charges. Based on the
current market value of Old Kent stock, the total value of the
transaction would be $242 million, which represents
approximately $28.00 per share. The combined company is
expected to have a market capitalization of nearly $5 billion.
The merger agreement contains a provision which would allow
CFSB Bancorp the right to terminate the planned merger, if Old
Kent's average common stock price falls below certain
predetermined levels, prior to closing. The merger agreement
also provides Old Kent with an option to purchase 19.99% of CFSB
Bancorp shares under certain specified circumstances.
Old Kent also noted that its stock repurchase program would
be unaffected by this proposed transaction. This program was
authorized in June 1998. Through February 23, 1999, the
Corporation had repurchased approximately 4.2 million shares of
Old Kent Common Stock, or about 70% of the total 6 million
shares authorized for reacquisition. Under this program, shares
intended for anticipated future stock dividends are reacquired
ratably on a quarterly basis. Also, shares intended for reissue
in connection with dividend reinvestment and employee stock
plans are reacquired quarterly as needed to maintain shares
reserved for those purposes at a level consistent with
anticipated permissible needs. At February 19, 1999, Old Kent
had remaining authorization to repurchase approximately 1.8
million of shares of its stock over the next five months.
Old Kent is a financial services company headquartered in
Grand Rapids, Michigan. It operates 235 banking offices in
Michigan, Illinois, and Indiana as well as over 140 mortgage
lending sites throughout the United States. At December 31,
1998, Old Kent assets totaled $16.6 billion.
###
The following Summary Financial Data is part of this press
release.
Summary Financial Data
Old Kent CFSB
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Bancorp
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December 31, December 31,
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1998 1998
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Earnings Summary:
Basic Earnings Per Share $1.86 $1.44
Diluted Earnings Per Share $1.84 $1.38
Net Income $198,798,000 $11,844,000
Balance Sheet Data (in millions):
Total Loans $8,884 $786
Total Deposits 12,940 587
Total Assets 16,589 880
Shareholders' Equity 1,135 69
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FORWARD LOOKING STATEMENTS
--------------------------
This news release contains certain estimates and projections for
Old Kent Financial Corporation, CFSB Bancorp, Inc. and the
combined company following the merger, including estimates and
projections related to cost savings, revenue enhancements and
accretion that may be realized from the merger, and certain
merger-related charges expected to be incurred in connection
with the transaction. These estimates and projections
constitute forward-looking statements which involve significant
risks and uncertainties. Actual results may differ materially
from the results discussed in these forward-looking statements.
Internal and external factors that might cause such a difference
include, but are not limited to: (1) expected cost savings from
the merger might not be fully realized or realized within the
expected time frame; (2) revenues following the merger may be
lower than expected; (3) competitive pressures among depository
institutions may increase significantly; (4) costs or
difficulties related to the integration of the business may be
encountered; (5) changes in the interest rate environment may
reduce net interest income; (6) general economic conditions may
deteriorate, either nationally or in the states in which the
combined company will be doing business; and (7) legislation or
regulatory changes may adversely affect the businesses in which
the combined company would be engaged.