SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 2001
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GASTON FEDERAL BANCORP, INC.
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(Exact Name of Registrant as Specified in Charter)
Federal 0-23971 56-2063438
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(State or Other Jurisdiction (Commission File No.) (I.R.S. Employer
of Incorporation) Identification No.)
245 West Main Avenue, Gastonia, North Carolina 28053
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (704) 868-5200
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Not Applicable
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
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On December 31, 2001, Gaston Federal Bancorp, Inc. (the "Company")
completed its acquisition of Innes Street Financial Corporation ("Innes Street")
and its wholly-owned subsidiary, Citizens Bank, Inc. ("Citizens Bank"). As part
of the acquisition, Innes Street's stockholders received $18.50 per share for
each share of Innes Street's common stock issued and outstanding. The aggregate
purchase price for the transaction (including cash payments for the cancellation
of options) was approximately $38 million. The transaction was accounted for
using the purchase method.
Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits.
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(a) Financial statements of the business acquired.
The consolidated financial statements of Innes Street for the years ended
September 30, 2000 and 1999 contained in its 2000 Annual Report on Form 10-KSB
filed with the Securities and Exchange Commission on December 29, 2000 is
incorporated herein by reference. The consolidated financial statements of
Innes Street included in its Quarterly Report on Form 10-QSB for the quarter
ended June 30, 2001 filed with the Securities and Exchange Commission on August
13, 2001, are also incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements attached as
Exhibit 99.4 ("pro forma financial statements") are based on the historical
financial statements of Innes Street and the Company and have been prepared to
illustrate the effect of the acquisition.
The unaudited pro forma condensed combined statements of financial
condition as of September 30, 2001 attached as Exhibit 99.4 is based on the
unaudited historical consolidated statements of financial condition of the
Company and Innes Street at that date, assuming that the acquisition had been
consummated on September 30, 2001, and accounted for using the purchase method
of accounting.
The unaudited pro forma statements of operations reflect the combination of
the historical results of operations of the Company for the year ended December
31, 2000 and for the nine months ended September 30, 2001, and Innes Street for
the year ended September 30, 2000 and for the nine months ended June 30, 2001.
The unaudited pro forma statements of operations give effect to the acquisition
using the purchase method of accounting and assume that (1) the acquisition
occurred as of the beginning of the respective periods presented, and (2) the
amount of goodwill equaled the amount reflected in the unaudited pro forma
condensed combined statement of financial condition as of September 30, 2001.
These pro forma financial statements should be read in conjunction with the
historical consolidated financial statements and related notes contained in the
Company's September 30, 2001
Form 10-QSB and September 30, 2000 Form 10-KSB; and in Innes Street's June 30,
2001 Form 10-QSB and September 30, 2000 Form 10-KSB.
The combined company expects to achieve benefits from the acquisition
including operating cost savings and revenue enhancements. These pro forma
financial statements do not reflect any potential cost savings or revenue
enhancements that are expected to result from the combination of the operations
of the Company and Innes Street and accordingly, may not be indicative of the
results of future operations. No assurances can be given with respect to the
ultimate level of cost savings or revenue enhancements to be realized. As a
result, these pro forma financial statements are not necessarily indicative of
either the results of operations or financial condition that would have been
achieved had the acquisition in fact occurred on the dates indicated, nor do
they purport to be indicative of the results of operations or financial
condition that may be achieved in the future by the combined company.
(c) Exhibit Description
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2.1 Agreement and Plan of Merger by and among Gaston Federal
Holdings, MHC, Gaston Federal Bancorp, Inc., Gaston Merger
Subsidiary, Inc., Gaston Federal Bank, and Innes Street
Financial Corporation and Citizens Bank, Inc. dated as of
July 16, 2001. Incorporated by reference to Gaston Federal
Bancorp's Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 25, 2001 (File
No. 0-23971)
99.1 Press release, dated December 31, 2001, announcing
consummation of the merger filed herewith.
99.2 Innes Street's audited financial statements for the years
ended September 30, 2000 and 1999, together with the report
of the independent auditors thereon. Incorporated by
reference to Innes Street's Annual Report on Form 10-KSB
for the year ended September 30, 2000 (File No. 000-25179).
99.3 Innes Street's June 30, 2001 unaudited financial
statements. Incorporated by reference to Innes Street's
quarterly report on Form 10-QSB for the quarterly period
ended June 30, 2001 (File No. 000-25179).
99.4 Unaudited proforma condensed consolidated statement of
condition of Gaston Federal Bancorp, Inc. as of September
30, 2001 and unaudited proforma condensed consolidated
statement of operations for the nine months ended September
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30, 2001 and for the year ended December 31, 2000, filed
herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
GASTON FEDERAL BANCORP, INC.
DATE: December 31, 2001 By: /s/ Paul L. Teem, Jr.
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Paul L. Teem, Jr.
Executive Vice President, Secretary and Chief
Administrative Officer
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EXHIBIT INDEX
The following Exhibits are filed as part of this report:
Exhibit No. Description
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2.1 Agreement and Plan of Merger by and among Gaston Federal
Holdings, MHC, Gaston Federal Bancorp, Inc., Gaston Merger
Subsidiary, Inc., Gaston Federal Bank, and Innes Street
Financial Corporation and Citizens Bank, Inc. dated as of
July 16, 2001. Incorporated by reference to Gaston Federal
Bancorp's Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 25, 2001 (File
No. 0-23971)
99.1 Press release, dated December 31, 2001, announcing
consummation of the merger filed herewith.
99.2 Innes Street's audited financial statements for the years
ended September 30, 2000 and 1999, together with the
report of the independent auditors thereon. Incorporated
by reference to Innes Street's Annual Report on Form 10-
KSB for the year ended September 30, 2000 (File No. 000-
25179).
99.3 Innes Street's June 30, 2001 unaudited financial
statements. Incorporated by reference to Innes Street's
quarterly report on Form 10-QSB for the quarterly period
ended June 30, 2001 (File No. 000-25179).
99.4 Unaudited proforma condensed consolidated statement of
condition of Gaston Federal Bancorp, Inc. as of September
30, 2001 and unaudited proforma condensed consolidated
statement of operations for the nine months ended
September 30, 2001 and for the year ended December 31,
2000, filed herewith.