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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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Contact: Michael J. Hartl
Senior Vice President and Chief Financial Officer of
Connecticut Bancshares, Inc.
(860) 645-2596
CONNECTICUT BANCSHARES, INC. APPROVES
AGREEMENT AND PLAN OF MERGER
WITH THE NEW HAVEN SAVINGS BANK
Manchester, Conn. (July 16, 2003) - Connecticut Bancshares, Inc. (the
"Company") (Nasdaq: SBMC), the holding company for The Savings Bank of
Manchester ("SBM"), announced today it has entered into an Agreement and Plan of
Merger (the "Agreement") with The New Haven Savings Bank ("NHSB").
The Company's stockholders will receive $52.00 in cash in exchange for
each share of the Company's common stock held, which represents 226% of the
Company's book value and 254% of the Company's tangible book value at March 31,
2003 and 20.4x its trailing twelve months earnings. If the transaction closes
after March 31, 2004, the merger price is subject to increase based on the
Company's earnings from that date to the end of the month preceding the closing
date.
As a condition precedent to the merger, NHSB will convert from a
Connecticut-chartered mutual savings bank to a Connecticut-chartered stock
savings bank and simultaneously form a holding company. A portion of the
proceeds of this conversion will be used to fund the merger consideration.
Richard P. Meduski, the Company's President and Chief Executive Officer
stated, "Our Board of Directors carefully considered the interests of our
stockholders, customers, employees and community. It was important for us to
merge with an institution that is committed to building on our successes and
that shares our commitment to customer service and community-oriented banking.
We believe this type of transaction allows our stockholders to receive a
significant premium for their stock. The merger will create a substantial
franchise in the Connecticut market and enables our customers to continue to
enjoy superior banking services with an enlarged branch network and expanded
services."
Mr. Meduski also noted that the SBM Charitable Foundation, Inc. would
continue to operate as an independent community resource to meet the needs of
SBM's communities. "We also are quite pleased that the combined company will
continue to support the communities that we serve, both through the SBM
Charitable Foundation and through NHSB's charitable foundation." The SBM
Charitable Foundation had $35.5 million in assets at March 31, 2003.
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Under the terms of the Agreement, the Company will merge into NHSB's
newly formed holding company and SBM will merge into NHSB. NHSB's newly formed
holding company and NHSB will be the surviving entities. NHSB will select two
directors from each of the Boards of Directors of the Company and SBM to serve
as directors of NHSB's newly formed holding company and NHSB following the
merger.
The transaction is subject to several conditions, including the
completion of NHSB's conversion, the receipt of regulatory approvals and the
approval of the stockholders of the Company. The merger is currently expected to
be consummated during the first quarter of 2004. NHSB would pay the Company a
$30 million cash payment if the merger does not close by October 15, 2004 under
certain circumstances.
Sandler O'Neill & Partners, L.P., New York, New York, served as the
Company's financial advisor.
NHSB currently operates 36 branches throughout south central
Connecticut. As of March 31, 2003, NHSB had total assets of $2.4 billion,
deposits totaling $1.8 billion and capital of $396 million. As of March 31,
2003, the Company had total assets of $2.6 billion, deposits of $1.6 billion and
stockholder's equity of $256 million. The Company currently operates out of its
headquarters and 28 full-service banking offices located in Hartford, Tolland
and Windham Counties.
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements about the
proposed merger of the Company and NHSB. These statements include statements
regarding the anticipated closing date of the transaction 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
results 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 the Company and NHSB, 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 the Company and NHSB are engaged, and changes in
the securities markets.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
The Company and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the stockholders of the
Company in connection with the merger. Information about the Company's directors
and executive officers and their ownership of Company common stock is set forth
in the proxy statement, dated April 4, 2003, for the Company's 2003 annual
meeting of stockholders, as filed with the SEC.
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STOCKHOLDERS OF THE COMPANY AND OTHER INVESTORS ARE URGED TO READ THE
PROXY STATEMENT THAT WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
BY THE COMPANY IN CONNECTION WITH THE PROPOSED MERGER BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, NHSB, THE MERGER, THE PERSONS
SOLICITING PROXIES IN THE MERGER AND THEIR INTERESTS IN THE MERGER AND RELATED
MATTERS. Investors will be able to obtain all documents filed with the SEC by
the Company free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by the Company will be available free of charge
from the Corporate Secretary of the Company at 923 Main Street, Manchester,
Connecticut 06040, telephone (860) 646-1700. READ THE PROXY STATEMENT CAREFULLY
BEFORE MAKING A DECISION CONCERNING THE MERGER.