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Filed by First International Bancorp, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: First International Bancorp, Inc.
Commission File No.: 0-22861
ON MAY 15, 2001 FIRST INTERNATIONAL BANCORP, INC. ISSUED THE
FOLLOWING PRESS RELEASE
FOR IMMEDIATE RELEASE
MEDIA
CONTACT: Michele A. Zommer
Vice President, Corporate Communications
(860) 241-4705
zommerm@firstinterbank.com
INVESTOR
CONTACT: Brett N. Silvers Leslie A. Galbraith
Chairman & CEO President & COO
(860) 241-2517 (860) 241-2529
silversb@firstinterbank.com galbraithl@firstinterbank.com
FIRST INTERNATIONAL BANCORP REPORTS
FIRST QUARTER 2001 RESULTS
HARTFORD, CONN., MAY 15, 2001 -- First International Bancorp, Inc.
(NASDAQ: FNCE), parent of First International Bank, today reported net income of
$303,000 ($.04 per diluted share) for the quarter ended March 31, 2001, compared
with $2.1 million ($.26 per diluted share) in the same period last year.
Total gains on loan sales in first quarter 2001 were $5.0 million,
approximately the same as first quarter 2000, as increased gains from the sale
of federally guaranteed loans were offset by a decline in gains from the sale of
loan-backed securitizations following the company's exit from new securitization
activities after 2000. Costs impacting first quarter 2001 net income included
$625,000 ($.08 per diluted share) related to the company's pending merger with
United Parcel Service, Inc. (NYSE:UPS)
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and $497,000 ($.06 per diluted share) for an impairment charge on an
interest-only strip held for one of the company's seven securitizations.
Loan originations during the first quarter of 2001 were $114.1
million, representing an 11% increase over the $102.5 million in loans
originated during first quarter 2000. The company increased the percentage of
federally guaranteed loans to 82% of total originations in first quarter 2001
from 65% of total originations in first quarter 2000 in response to market
demand from its core client base of small industrial businesses, the slowing
economy, and the heightened risk environment. Total loans managed by the company
were $1.3 billion at March 31, 2001, an 18% increase from $1.1 billion at March
31, 2000.
First International Bank reported balance sheet non-performing loans
at March 31, 2001 of $5.3 million, representing 3.27% of balance sheet loans,
compared with 2.75% ($4.2 million) at December 31, 2000 and 3.20% ($4.6 million)
at March 31, 2000. Net charge-offs for first quarter 2001 were $773,000,
commensurate with fourth quarter 2000 net charge-offs of $754,000. The company
made a provision for loan losses of $1.0 million during the first quarter,
bringing the Allowance for Loan and Lease Losses to $5.8 million at March 31,
2001.
Brett N. Silvers, Chairman and CEO, commented, "The quarterly results
reflect solid performance in our small business lending niche, especially in
light of the time and attention our staff has dedicated to pre-integration
activities related to our pending merger with UPS."
In January 2001, First International entered into a definitive merger
agreement with UPS. "We have made good progress toward achieving the conditions
for closing with UPS early in the third quarter," stated Silvers. As required by
the UPS merger agreement, the company announced a definitive agreement on May 2,
2001 to sell its FDIC-insured deposits to Hudson United Bank. A special meeting
of shareholders to formally consider the UPS transaction will be held on June 1,
2001.
ABOUT FIRST INTERNATIONAL BANK AND FIRST INTERNATIONAL BANCORP INC.
First International Bank (www.firstinterbank.com), a world leader in the use of
SBA, USDA and Export-Import Bank loans, provides innovative credit, trade and
financial
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solutions for small and medium-sized industrial businesses. The company has more
than 100 experienced lending officers located in 15 U.S. offices, and 14
international representatives. In 2000, the company originated more than $500
million in loans primarily within its industrial niche, and closed the year with
a managed loan portfolio of $1.3 billion. Established in 1955, the bank is a
subsidiary of publicly traded First International Bancorp Inc. (NASDAQ: FNCE),
with headquarters in Hartford, Connecticut.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Any statements contained in this press release, which are not historical facts,
are forward-looking statements; and, therefore, many important factors could
cause actual results to differ materially from those in the forward-looking
statements. Such factors include, but are not limited to, changes (legislative,
regulatory and otherwise) in the banking and commercial finance industries and
those specifically relating to the continuation in their present form of the
government guaranteed loan programs utilized by the company; the ability of the
company to continue its recent growth in an increasingly competitive market for
loan originations; disruption in the capital markets which may delay or prevent
the company from receiving funding under warehouse lines of credit or completing
loan sales; and other risks identified in the company's Securities and Exchange
Commission filings. In addition, with respect to the proposed merger of the
company and UPS, investors should be aware of the following factors, among
others: the possibility that the proposed merger will not be consummated as a
result of failure to satisfy certain conditions; the possibility that the
proposed merger will be delayed substantially; the inability to obtain, or meet
conditions imposed for, governmental approvals of the proposed merger and other
transactions described in the merger agreement; the possibility that the
announcement of the proposed merger will have an adverse impact on the company's
business; and the significance of costs relating to the proposed merger.
ADDITIONAL INFORMATION
In connection with the proposed acquisition of the company by UPS, UPS has filed
a Registration Statement on Form S-4 with the SEC, which contains the company's
proxy statement for the company's upcoming special stockholder meeting, at which
the proposed merger will be considered. Stockholders of the company are urged to
read the proxy statement because it contains important information. Stockholders
may obtain a free copy of the proxy statement and other documents filed by the
company and UPS with the SEC at the SEC's web site at http://www.sec.gov. Free
copies of the proxy statement and other filings by the company with the SEC may
also be obtained by directing a request to Leslie A. Galbraith, Telephone:
860-241-2529.
# # #
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FIRST INTERNATIONAL BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Unaudited
ASSETS
MARCH 31, DECEMBER 31,
-------- ------------
2001 2000
-------- ------------
Cash and cash equivalents ............... $ 10,106 $ 29,365
Investment securities ................... 58,533 59,201
Loans, net .............................. 150,623 142,225
Receivable from loans sold .............. 46,496 56,097
Investment in unconsolidated subsidiaries 18,189 19,758
Premises and equipment, net ............. 4,352 4,548
Servicing asset ......................... 40,145 35,962
Prepaid expenses and other assets ....... 16,205 15,072
-------- --------
Total assets ....................... $344,649 $362,228
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
MARCH 31, DECEMBER 31,
-------- ------------
2001 2000
-------- ------------
Deposits ........................................ $262,373 $297,187
Loan facilities ................................. 13,505 --
Other liabilities ............................... 6,853 5,484
-------- --------
Total liabilities .......................... 282,731 302,671
-------- --------
Stockholders' equity:
Preferred stock ($.10 par value; 2,000,000 shares
authorized; no shares issued and outstanding) -- --
Common stock ($.10 par value; 12,000,000 shares
authorized; shares issued and outstanding:
8,042,019 and 8,279,574) ..................... 804 828
Paid-in capital in excess of par value .......... 32,640 32,846
Retained earnings, net .......................... 28,474 25,883
-------- --------
Total stockholders' equity ................ 61,918 59,557
-------- --------
Total liabilities and stockholders' equity $344,649 $362,228
======== ========
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FIRST INTERNATIONAL BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
Unaudited
THREE MONTHS ENDED
MARCH 31,
------------------------------
2001 2000
----------- -----------
Interest income:
Loans, including net fees ................ $ 4,614 $ 4,512
Investment securities .................... 1,545 770
Federal funds sold ....................... 546 593
----------- -----------
Total interest income ............. 6,705 5,875
INTEREST EXPENSE ............................... 4,660 3,691
----------- -----------
Net interest income ...................... 2,045 2,184
PROVISION FOR POSSIBLE LOAN LOSSES ............. 1,023 558
----------- -----------
Net interest income after
provision for possible loan losses .. 1,022 1,626
NON-INTEREST INCOME:
Gain on sale of:
Guaranteed loans .................... 4,144 2,584
Other loans ......................... 232 217
Securitizations and sales to conduits 602 2,220
----------- -----------
Total gains on loan sales ....... 4,978 5,021
Loan servicing income and fees ........... 2,504 1,923
Impairment on retained interests ......... (776) --
Income from unconsolidated companies ..... 32 352
Other income ............................. 25 36
----------- -----------
Total non-interest income ........ 6,763 7,332
----------- -----------
Total operating income .......... 7,785 8,958
----------- -----------
NON-INTEREST EXPENSE:
Salaries and benefits .................... 4,235 3,702
Occupancy ................................ 531 486
Office expenses .......................... 225 222
Marketing ................................ .04 .26
Furniture and equipment .................. 388 334
Outside services ......................... 997 376
Other .................................... 178 161
----------- -----------
Total non-interest expense ...... 6,978 5,672
----------- -----------
Income before income taxes .... 807 3,286
PROVISION FOR INCOME TAXES ..................... 504 1,144
----------- -----------
NET INCOME .......................... 303 2,142
=========== ===========
----------- -----------
BASIC EARNINGS PER COMMON SHARE ................ $ 0.04 $ 0.26
=========== ===========
----------- -----------
DILUTED EARNINGS PER COMMON SHARE .............. $ 0.04 $ 0.26
=========== ===========
WEIGHTED AVERAGE SHARES FOR THE
PERIODS:
Basic EPS ................................. 8,108,094 8,261,203
Diluted EPS ............................... 8,218,845 8,384,175
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FIRST INTERNATIONAL BANCORP, INC. AND SUBSIDIARY
SELECTED FINANCIAL HIGHLIGHTS
(dollars in thousands)
Unaudited
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
MARCH 31, 2001 MARCH 31, 2000
--------------------------- ---------------------------
PRINCIPAL PRINCIPAL
BALANCE PERCENTAGE BALANCE PERCENTAGE
---------- ---------- ---------- ----------
Lending and Servicing Activity:
Loan Originations:
SBA .............................. $ 47,078 41% $ 28,386 28%
USDA ............................. 16,952 15% 7,350 7%
Other commercial ................. 12,526 11% 23,090 23%
---------- ---------- ---------- ----------
Domestic .................... 76,556 67% 58,826 57%
Exim working capital ............. 8,075 7% 16,078 16%
Exim term ........................ 21,848 19% 14,921 16%
Other international .............. 7,574 7% 12,701 12%
---------- ---------- ---------- ----------
International ............... 37,497 33% 43,700 43%
---------- ---------- ---------- ----------
Total Originations .......... $ 114,053 100% $ 102,526 100%
========== ========== ========== ==========
Loan Sales:
SBA .............................. $ 33,193 42% $ 18,590 18%
USDA ............................. 11,222 14% 5,880 6%
Loan-backed securitizations ...... 5,152 6% 25,847 25%
Loans to commercial paper conduits
and other facilities ........ 0 0% 18,196 18%
Other commercial ................. 7,962 10% 5,437 5%
---------- ---------- ---------- ----------
Domestic .................... 57,529 72% 73,950 72%
Exim working capital ............. 6,100 8% 13,030 13%
Exim term ........................ 15,888 20% 16,287 16%
---------- ---------- ---------- ----------
International ............... 21,988 28% 29,317 28%
---------- ---------- ---------- ----------
Total Sales ................. $ 79,517 100% $ 103,267 100%
========== ========== ========== ==========
Total Loans Serviced for Others ....... $1,150,165 $ 967,347
========== ==========
Total Loans Under Management .......... $1,311,487 $1,110,516
========== ==========
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FIRST INTERNATIONAL BANCORP, INC. AND SUBSIDIARY
SELECTED FINANCIAL HIGHLIGHTS
(dollars in thousands)
Unaudited
THREE MONTHS ENDED
MARCH 31,
--------------------------
2001 2000
--------- ---------
Financial:
Return on average assets (ROAA) .......................... 0.34% 2.73%
Return on average equity (ROAE) .......................... 2.05% 15.62%
Book value per share ..................................... $ 7.70 $ 7.13
Net interest margin ...................................... 2.92% 3.25%
Efficiency ratio ......................................... 79.23% 59.61%
Capital Ratios:
Total capital to risk weighted assets ............... 10.57% 11.32%
Leverage ratio ...................................... 11.88% 17.22%
ASSET QUALITY:
Allowance for loan losses ................................ $ 5,800 $ 4,550
========= =========
Total non-performing loans / loans and loans held for sale $ 5,272 $ 4,583
========= =========
Total non-performing loans / loans and loans held for sale 3.27% 3.20%
========= =========
Total non-performing loans / assets ...................... 1.53% 1.46%
========= =========
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