SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT FORM
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 21, 1997
NSS Bancorp, Inc.
(Exact Name of Registrant as Specified in Charter)
Connecticut 0-22937 06-1485317
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
48 Wall Street, Norwalk, Connecticut 06852
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, include area code 203-838-4545
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
See attached letter dated November 21, 1997.
[NSS Letterhead]
November 21, 1997
Basswood Partners, LP
52 Forest Avenue
Paramus, New Jersey 07652
Dear Sirs:
This is in response to your letter dated November 13, 1997, requesting the
right to inspect and copy certain records of NSS Bancorp.
First of all, we wish to express our disagreement with your claim that the
financial performance of the Company since its conversion has been
disappointing. You are well aware of the substantial progress the Company
has made financially since conversion, including improving return on equity
from 7.36% for 1994 to 9.99% (annualized based on nine months ended
September 30, 1997), improving return on assets from .51% for 1994 to
.81% (annualized based on nine months ended September 30, 1997), and
reducing non-performing assets from 4.5% of total assets at year end 1994
to 1.14% at September 30, 1997. In terms of "meaningful prospects for
improvement", NSS Bancorp has recently been organized as a bank holding
company, which will facilitate corporate and capital structuring
opportunities which are presently under consideration and which may
supplement the operational improvements the Company has enjoyed, thus
further enhancing shareholder value. Although stock price performance is
not always an accurate indicator of financial performance, we note that the
Company's stock was issued in June of 1994 at $10.00 per share and closed
yesterday at a price of $37.875 per share.
If Basswood Partners, LP is not satisfied with our financial performance
and does not agree with the Company's long term strategy, it can sell its
shares and realize a significant gain.
We are proud of our accomplishments in recent years and are concerned that
our efforts and our success not be jeopardized by hostile activity which
distracts management, the marketplace and our customers and requires
extraordinary corporate expenditures. Accordingly, we respond to your
requests for access to corporate records as follows.
Pursuant to your request, you may inspect and copy, during regular business
hours at NSS Bancorp's principal office, any of the records of NSS Bancorp
described in Section 33-945(e) of the Connecticut Business Corporation Act
(the "Act"). We have made provisions for you to perform this task on
Friday, November 28, 1997.
There is no basis for your request to inspect the records described in
Section 33-946(b) of the Act, because you have not met any of the
requirements of Section 33-946(c) of the Act. Some of your failures to
satisfy those requirements are set forth below.
Although your letter states that you intend to communicate with other
shareholders regarding alleged "financial underperformance" and methods to
"improve... future financial performance", it is clear from the first two
paragraphs of your letter and from your actions in similar investment
situations at other financial institutions that your real intention is to
communicate with other shareholders to attempt to force a sale of NSS
Bancorp. Where you avowed purpose is to cause a sale, the purported
justifications offered later in your letter are not made in good faith.
The business and affairs of NSS Bancorp are managed under the direction of
its Board of Directors, as provided by Section 33-735 of the Act. This
includes any matters relating to the sale or possible sale of NSS Bancorp.
In this regard, the Board of Directors takes very seriously its fiduciary
obligations under Section 33-756 of the Act, which we respectfully
suggest you read with special care. If you wish to communicate with
management regarding the financial performance of NSS Bancorp, and what is
in the best interests of the corporation, we would be interested in hearing
your views, as we would the views of any shareholder.
It also appears to us that the primary purpose of your letter was not the
stated purpose, but was instead to create a basis for filing an amendment
to your Schedule 13D intended to put NSS Bancorp "in play." This may be
consistent with your short-term economic goals, but it is not consistent
with the best interests of the corporation, and presents a risk to all
shareholders and to the value of their investment in NSS Bancorp. We take
this opportunity to remind you of the federal securities and bank
regulatory laws applicable to shareholders who act together with respect to
NSS Bancorp stock. You may also wish to consult with counsel regarding
sections 33-843 through 33-845 of the Act, particularly with respect to the
definitions contained in paragraphs 5, 9 and 10 of section 33-843.
Your request for the other information and permission to take the other
actions set forth in Annex A to your letter of November 13 are also denied,
for reasons including those set forth above.
If you wish to discuss the Board's fiduciary obligations and what you
believe to be in the best interest of NSS Bancorp, we repeat that we would
be happy to consider your views on these matters.
In conclusion, our shareholders including Basswood Partners, LP have
realized significant appreciation of their investment, for example NSSY
stock on December 31, 1996 closed at $23.375 and on November 20, 1997
closed at $37.875 reflecting a 62% increase.
Very truly yours,
/s/ Robert T. Judson
Robert T. Judson
President & CEO
cc: Brian A. Fitzgerald
Charles F. Howell
Herbert L. Jay
Edward J. Kelley
John L. Segall
Donald St. John
Alan R. Staack
SIGNATURES
Pursuant to the Securities Exchange Act of 1934, the registrant has duly
caused this report of be signed on its behalf by the undersigned hereunto
duly authorized.
December 9, 1997 NSS Bancorp, Inc.
Registrant
By /s/ Robert T. Judson
Robert T. Judson