Company Press Release
Old Kent Financial Corporation
Old Kent to Acquire First Evergreen Corporation
GRAND RAPIDS, Mich. -- David J. Wagner, Chairman and CEO of Old Kent
Financial Corporation, and Kenneth J. Ozinga, Chairman and President of
First Evergreen Corporation, announced today that they have signed a
definitive agreement for the merger of First Evergreen into Old Kent.
First Evergreen is a bank holding company headquartered in Evergreen Park,
Illinois, with assets of $1.9 billion and deposits of $1.7 billion as of
March 31, 1998. It is the parent of First National Bank of Evergreen Park.
First Evergreen provides banking services through 8 offices in Cook County.
Mr. Wagner stated, "The addition of First Evergreen to our Chicagoland
franchise doubles our deposit market share in Chicago, moving Old Kent to
seventh largest overall. With no overlap, this will allow us to expand our
customer service reach to new communities, providing more opportunity to
sell Old Kent's broad array of retail and commercial products and
services."
"The merger further extends Old Kent's presence in our core markets.
Through a community oriented focus, First Evergreen built the number one
deposit market share in three communities, Evergreen Park, Oak Lawn, and
Orland Park. The stable growth in households, population, and employment
in these markets will provide strong demand for Old Kent banking products
and services. This transaction meets all of our acquisition strategy
criteria and, most importantly, is expected to be accretive to earnings in
1999."
Mr. Wagner further stated, "We consider First Evergreen to be a fine
banking franchise. Mr. Ozinga and the other members of management at First
Evergreen have built an excellent organization."
According to Mr. Ozinga, "First Evergreen is highly committed to providing
full-service commercial banking products and services to the communities it
serves. This affiliation will expand the capabilities we deliver today,
and we believe our customers will be best served as a result of the
merger."
The merger is subject to approval by First Evergreen shareholders and
regulatory agencies. It is expected to be completed in the fourth quarter
of 1998.
The merger will be structured as a "pooling-of-interests" for accounting
purposes and as a tax free exchange of shares. First Evergreen
shareholders will receive 12.2 million shares of Old Kent stock, using an
exchange ratio of 30.5059 for each share of First Evergreen. Old Kent
anticipates approximately $25 million of one-time merger related charges,
and cost savings of approximately 30% or about $12 million annually. Based
on the current market value of Old Kent stock, the total value of the
transaction would be $488 million. The combined company is expected have a
market capitalization of over $4 billion.
The merger agreement contains a provision which would allow First Evergreen
the right to terminate the planned merger, if Old Kent's average common
stock price falls below certain pre-determined levels, prior to closing.
The merger agreement also provides Old Kent a "lock up" option to purchase
19.99% of First Evergreen 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 1997 and
later amended to allow for the effect of a 2-for-1 stock split paid in
December 1997. Through March 31, 1998, the Corporation had repurchased
approximately 4.4 million shares of Old Kent Common Stock, or about 73% 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
March 31, 1998, Old Kent had remaining authorization to repurchase
approximately 1.6 million shares of its stock over the next four months.
Old Kent Financial Corporation is a bank holding company headquartered in
Grand Rapids, Michigan, whose affiliate banks operate over 200 full service
offices in Michigan and Illinois, and 114 mortgage lending sites in 27
states. At March 31, 1998, Old Kent had total assets of $14.2 billion.
SUMMARY FINANCIAL DATA
OLD KENT FIRST
-------- EVERGREEN
---------
QUARTER ENDED DECEMBER 31,
MARCH 31, 1998 1997 1997
-------------- ---- ----
Earnings Summary
Basic Earnings Per Share $0.50 $1.90 $45.17
Diluted Earnings
Per Share $0.50 $1.88 $45.17
Net Income $ 46,174,000 $ 180,304,000 $ 18,114,000
Balance Sheet Data
Total Loans $ 8,214,299,000 $ 8,469,477,000 $ 674,440,000
Total Interest-earning
Assets 13,025,214,000 12,648,004,000 1,832,564,000
Core Deposits 9,428,081,000 9,552,811,000 1,529,723,000
Total Deposits 10,299,363,000 10,228,290,000 1,700,620,000
Total Assets 14,220,022,000 13,773,522,000 1,933,096,000
Shareholders' Equity 1,008,319,000 1,027,453,000 198,142,000
FORWARD LOOKING INFORMATION
This news release contains certain estimates and projections regarding each
of Old Kent Financial Corporation and First Evergreen Corporation and the
combined company following the merger, including estimates and projections
relating 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.
Old Kent Financial Corporation (OKEN) Acquisition of
First Evergreen Corporation (FIVR)
Announcement Date: 4/22/98
Total Acquisition Price (000's): $ 488,000
Acquisition Price Per Share: $ 1,220.23
Price to Book Value: 246%
Price to Tangible Book Value: 251%
Adj. Deal Price to 6.5% Common Equity: 388%
Price to LTM Earnings Per Share: 26.9x
Premium over Tangible Book Value
to Deposits: 16.8%
Deal Price to Assets 25.2%
Accounting Method: Pooling
Consideration: Common St.
BUYER SELLER
Ticker: OKEN FIVR
Stock Price
(previous day): $ 40.000 not traded
Current Financial
Period: 12/31/97 $ 12/31/97
Assets (000's): $ 13,773,522 $ 1,933,096
Loans (000's): $ 8,469,477 $ 674,440
Deposits (000's): $ 10,228,290 $ 1,700,620
Equity (000's): $ 1,027,453 $ 198,142
YTD ROAA: 1.36% 0.94%
YTD ROAE: 17.55% 9.51%
YTD NIM: 4.34% 2.89%
YTD Noninterest Exp./
Total Revenue: 61.16% 58.44%
Tangible Equity/
Tangible Assets: 6.56% 10.07%
- - First Evergreen Corporation is headquartered in Evergreen Park,
Illinois with 8 branches in southwestern Chicago. The company
provides full service commercial banking through its wholly-owned
subsidiary First National Bank of Evergreen Park. The bank provides
its services primarily to three communities; Evergreen Park, Oak
Lawn and Orland Park.
- - Old Kent Financial Corporation is headquartered in Grand Rapids,
Michigan with affiliate banks operating over 200 full service
offices in Michigan and Illinois, and 114 mortgage lending sites in
27 states. The company's non-banking subsidiaries participate in
investment services, brokerage services, leasing services and
insurance services.
Financial Issues:
- - Shareholders of First Evergreen will receive 12.2 million shares of
Old Kent common stock. This is an exchange ratio of 30.5059 for
each First Evergreen share.
- - Walkaways: Available if Old Kent's average common stock share price
falls below certain pre-determined levels prior to closing.
- - First Evergreen has granted Old Kent a 19.99% ``lock-up'' option,
exercisable under certain specified circumstances.
- - Caps/Collars: None.
- - Immediate increase to Old Kent book value per share is expected to
be $0.57.
- - Old Kent expects the merger to be accretive by 3% to 1999 earnings;
achieves a 13.4% internal rate of return.
- - Estimated annual cost savings of $12 million. Total cost savings
expected to equal approximately 30% of First Evergreen's
non-interest expense.
- - Old Kent expects to incur a $25 million pre-tax restructuring and
merger related charge which is approximately 5.3% of the total
acquisition price.
- - The transaction is expected to close in the fourth quarter of 1998.
- - First Evergreen contribution: Estimated earnings w/synergies: 12.5%
Percent of shares outstanding: 11.9% Percent of combined assets:
12.3% Percent of combined equity: 16.2%
Non-Financial Issues
- - The acquisition would double Old Kent's deposit market share in the
Chicago area.
- - Would rank #1 in three communities: Evergreen Park, Oak Lawn and
Orland Park.
Forward Looking Statements
This news release includes forward looking statements. Such statements
relate to Old Kent's business and financial expectations generally and for
the transaction announced. They are generally identified by use of the
terms "`would," "should," "expect," "believe," "anticipate," variations of
such words and similar expressions. These statements are not guarantees of
future performance and involve certain risks, uncertainties and
assumptions. Actual results could differ materially from those indicated
by these statements. Old Kent's 1997 Annual Report to Shareholders section
captioned "Forward Looking Statements" contains additional information
about factors that could affect actual results.