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STANDARD FINANCIAL TCF
Thomas Ryan, Exec. VP, CFO Cynthia Lee (Investors)
(630) 986-7833 (612) 661-8859
Randall Schwartz, VP, Gen. Counsel Ann Storberg (Investors)
(630) 986-7836 (612) 661-8883
Bill Murphy, Financial Relations Bd. Elizabeth Anders (Media)
(312) 640-6764 (612) 661-8853
TCF and Standard Financial Agree to Merge
Creating $10 Billion Company
MINNEAPOLIS, March 17, 1997 - TCF Financial Corporation (TCF) (NYSE:TCB)
and Standard Financial, Inc. (Standard) (Nasdaq - NNM:STND) today announced a
definitive agreement to merge, creating a company with a combined $10
billion in assets and providing access to 276 financial services offices and
more than 900 ATMs in five midwestern states.
The transaction is structured as a cash election merger, providing for an
exchange of TCF common stock and cash for Standard shares. TCF will be the
surviving corporation in the merger. The transaction is expected to have an
aggregate value, based on the closing price of TCF common stock on March 14,
of approximately $424 million, or approximately $25 per Standard common
share. The transaction value is approximately 160 percent of Standard's book
value. TCF expects the merger to be accretive to both reported and cash
earnings in 1998.
TCF Chairman and Chief Executive Officer William A. Cooper said that
Standard's retail branch network complements TCF's 35 Illinois bank branches,
26 of which are in the Chicago
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area. "This union significantly expands our profitable and growing Illinois
franchise," said Cooper. "Chicago has long been an attractive market for TCF -
a large, urban-based population receptive to banking convenience - and
Standard has an exemplary tradition of meeting community banking needs."
Cooper added that no bank branches will be closed in connection with the
merger.
"Joining TCF will accelerate our transformation to a leading consumer
bank for the benefit of our shareholders, customers, and the communities we
serve," said Standard Chairman and President David Mackiewich. "We will have
access to a broader range of products and services, convenient banking
locations - including seven-day banking at supermarkets and 248 Cash Station
ATMs - and the financial resources of a dynamic regional bank."
"We believe this merger will produce long-term revenue enhancements and
meaningful cost savings," said Cooper. He noted that the strategic plan for
improving the Chicago franchise follows TCF's community banking philosophy:
increasing lower interest-cost checking, savings, and money market deposit
accounts; increasing higher-yielding consumer and commercial loans;
introducing complementary products and services such as annuities, mutual
funds, debit cards; and consolidating back-office operations.
For Standard's stockholders, the transaction will be structured as a cash
election merger in which holders of Standard's stock will have the right to
choose either cash or TCF common stock, or a combination of the two. Between
40 percent and 60 percent of the purchase price will be paid in shares of TCF
common stock, and the remainder will be paid in cash. The transaction will be
a tax-free exchange for Standard's stockholders to the extent they receive
shares of TCF common stock.
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The exchange ratio for shares of Standard stock will depend on the
average trading price of TCF stock during the 30 trading days preceding the
merger. If the average trading price of TCF stock during that period is
between $43.75 and $47.75, each Standard share will be converted into the
right to receive consideration having an aggregate value between $24.69 and
$25.81. If the average trading price of TCF stock is below $43.75 but greater
than or equal to $37.50, each Standard share will converted into the right to
receive consideration having an aggregate value of $24.69. If the average
trading price of TCF stock is above $47.75 but less than or equal to $54.00,
each Standard share will be converted into the right to receive consideration
having an aggregate value of $25.81.
The definitive agreement was signed after completion of due diligence and
approval of both companies' boards of directors. It is subject to approval by
Standard's stockholders, and required regulatory filings and approvals. The
merger is expected to close in the third quarter of 1997 and be accounted for
as a purchase transaction. Standard has agreed to pay a $15 million
termination fee if the merger agreement is terminated under certain
circumstances.
In connection with the transaction, TCF will record intangibles of
approximately $200 million.
After the merger, Standard's bank branches will be combined with TCF Bank
Illinois. The directors of Standard will join TCF Bank Illinois' board of
directors. Mackiewich will become executive chairman of TCF Bank Illinois and
a director of TCF Financial Corporation. Michael B. Johnstone, president and
chief executive officer of TCF Bank Illinois, will continue in that capacity.
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TCF will contribute $1 million over five years to Illinois community
organizations, consistent with TCF's philanthropic giving program which is
focused on housing and economic development in low-income communities, and
K-12 education reform.
In connection with the merger, Standard has announced that it has
postponed its annual meeting and plans to call a special meeting at which it
will seek stockholder approval of the merger.
Standard is a community-oriented thrift institution with $2.4 billion in
assets and 14 full-service offices on the southwest side of Chicago and in
the nearby southwestern and western suburbs. Excluding a regulatory special
assessment, Standard reported record 1996 earnings of $17.7 million, or $1.13
per share, a return on average assets of 0.78 percent and a return on average
equity of 6.60 percent.
TCF is a Minneapolis-based stock savings bank holding company with $7.1
billion in assets and more than 260 financial services offices. Its bank
subsidiaries operate in Minnesota, Illinois, and Wisconsin as TCF Bank, and
in Michigan and Ohio as Great Lakes Bankcorp. Affiliates include consumer
finance, mortgage banking, title insurance, annuity and mutual fund sales
companies. Excluding a regulatory special assessment, TCF reported record
1996 earnings of $107.4 million, or $3.04 per share, a return on average
assets of 1.56 percent, and a return on average common equity of 20.22 percent.
TCF intends to convert its federal savings bank subsidiaries into national
banks in the 1997 second quarter, pending all required regulatory approvals.