SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 18, 2000
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SOUND FEDERAL BANCORP
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(Exact Name of Registrant as Specified in Charter)
United States of America 0-24811 13-4029393
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(State or Other Jurisdiction (Commission File No.) (I.R.S. Employer
of Incorporation) Identification No.)
300 Mamaroneck Ave., Mamaroneck, New York 10543
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (914) 698-6400
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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 July 18, 2000, Sound Federal Bancorp (the "Company") completed its
acquisition of Peekskill Financial Corporation ("Peekskill") and its
wholly-owned subsidiary, First Federal Savings Bank. As part of the acquisition,
Peekskill's stockholders received $22.00 per share for each share of Peekskill's
common stock issued and outstanding. The aggregate purchase price for the
transaction (including cash payments for the cancellation of options) was
approximately $41.7 million. The transaction was accounted for using the
purchase method.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements attached as
Exhibit 99 ("pro forma financial statements") are based on the historical
financial statements of Peekskill and the Company and have been prepared to
illustrate the effect of the acquisition.
The unaudited pro forma condensed combined balance sheet as of June 30,
2000 aas Exhibit 99 is based on the unaudited historical consolidated balance
sheets of the Company and Peekskill at that date, assuming that the acquisition
had been consummated on June 30, 2000 and accounted for using the purchase
method of accounting.
The unaudited pro forma income statements reflect the combination of the
historical results of operations of the Company and Peekskill for the year ended
March 31, 2000 and for the three months ended June 30, 2000. The unaudited pro
forma income statements 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 initial goodwill
equaled the amount reflected in the unaudited pro forma condensed combined
balance sheet as of June 30, 2000.
These pro forma financial statements should be read in conjunction with the
historical consolidated financial statements and related notes contained in the
Company's June 30, 2000 Form 10-Q and March 31, 2000 Form 10-K; and in
Peekskill's March 31, 2000 Form 10-Q and June 30, 1999 Form 10-K.
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 Peekskill other than the elimination of expenses related to
Peekskill's Employee Stock Ownership and Recognition and Retention Plan 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.
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.
SOUND FEDERAL BANCORP
DATE: September 28, 2000 By: /s/ Anthony J. Fabiano
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Anthony J. Fabiano
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit 99 Unaudited pro forma financial statements
EXHIBIT 99
Sound Federal Bancorp
ProForma Balance Sheet
June 30, 2000
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SFB PFC Purchase SFB
Consolidated Consolidated Adjustments Pro Forma
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Assets
Cash & due from banks 7,492,224 0 0 7,492,224
Federal funds 16,400,000 6,683,767 0 23,083,767
Interest bearing deposits 7,180,517 0 0 7,180,517
Securities available for sale 60,758,170 15,121,423 62,134,167 (1) 138,013,760
Securities-Held to maturity 33,792,092 107,449,046 (107,449,046) (1) 33,792,092
Loans, net 198,884,657 67,491,606 (508,000) (2) 265,868,263
Premise & equipment, net 4,657,305 1,016,577 385,423 (3) 6,059,305
Accrued interest receivable 2,135,369 1,029,929 0 3,165,298
FHLB stock 2,195,400 1,550,000 0 3,745,400
Goodwill 227,326 0 15,287,748 (4) 15,515,074
ESOP Loan 0 0 0 0
Other assets 2,273,281 1,085,362 2,800,875 (5) 6,159,518
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Total Assets 335,996,341 201,427,710 (27,348,833) 510,075,218
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Liabilities & Equity
Deposits 280,652,525 152,109,811 (181,000) (6) 432,581,336
Escrow deposits 1,901,584 1,690,373 0 3,591,957
Accrued expenses & other liabilities 545,369 1,265,724 (161,031) (7) 1,650,062
Borrowings 85,261 20,000,000 (645,000) (8) 19,440,261
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Total Liabilities 283,184,739 175,065,908 (987,031) 457,263,616
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Stockholders Equity
Preferred stock 0 0 0 0
Common stock 521,221 40,997 (40,997) 521,221
Additional paid-in capital 22,418,595 40,397,246 (40,397,246) 22,418,595
Retained earnings 35,670,044 25,793,061 (25,793,061) 35,670,044
Unallocated ESOP stock (1,440,968) (2,541,836) 2,541,836 (1,440,968)
Unallocated BRP stock (672,594) (616,096) 616,096 (672,594)
Treasury stock (2,068,812) (35,846,410) 35,846,410 (2,068,812)
H/S Unrealized Gain (Loss) (1,615,884) (865,160) 865,160 (1,615,884)
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Total Equity 52,811,602 26,361,802 (26,361,802) (9) 52,811,602
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335,996,341 201,427,710 (27,348,833) 510,075,218
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Sound Federal Bancorp
ProForma Income Statement
For the Quarter Ended June 30, 2000
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CONSOLIDATED Peekskill Combined Purchase Combined
SFB @ 6/30/00 6/30/00 Results Adjustments Results
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INTEREST INCOME
Loans 3,540,237 1,241,000 4,781,237 12,600 (2) 4,793,837
Securities 1,659,515 2,024,000 3,683,515 (547,043) (1) 3,136,472
Federal funds 358,643 - 358,643 - 358,643
Certificates of deposit 118,161 - 118,161 - 118,161
Other earning assets 53,469 136,000 189,469 - 189,469
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Total interest income 5,730,025 3,401,000 9,131,025 (534,443) 8,596,582
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INTEREST EXPENSE
Interest on deposits 2,883,204 1,584,000 4,467,204 18,000 (6) 4,485,204
Interest on borrowings 12,511 316,000 328,511 98,750 (8) 427,261
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Total interest expense 2,895,715 1,900,000 4,795,715 116,750 4,912,465
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Net interest income 2,834,310 1,501,000 4,335,310 (651,193) 3,684,117
PROVISION FOR LOAN LOSS 50,000 65,000 115,000 - 115,000
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Net interest income after provision 2,784,310 1,436,000 4,220,310 (651,193) 3,569,117
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-
Service fees 54,711 74,000 128,711 - 128,711
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Total non-interest income 54,711 74,000 128,711 - 128,711
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NON-INTEREST EXPENSES
Salaries and employee benefits 899,456 495,000 1,394,456 (105,000) (10) 1,289,456
Occupancy and equipment 328,408 114,000 442,408 3,200 (3) 445,608
Merger costs - - - -
Data Processing 95,775 72,000 167,775 - 167,775
Advertising 168,312 - 168,312 168,312
Other non-interest expense 396,609 326,000 722,609 - 722,609
Goodwill Amortization - - - 258,585 (4) 258,585
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Total non-interest expense 1,888,560 1,007,000 2,895,560 156,785 3,052,345
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Net income before taxes 950,461 503,000 1,453,461 (807,978) 645,483
PROVISION FOR INCOME TAX 356,414 236,000 592,414 (253,389) 339,026
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NET INCOME 594,047 267,000 861,047 (554,590) 306,458
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Sound Federal Bancorp
ProForma Income Statement
For the Year Ended March 31, 2000
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Sound Federal Peekskill Combined Purchase Combined
Bancorp Financial Results Adjustments Results
Corporation
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INTEREST INCOME
Loans 12,427,000 4,836,000 17,263,000 50,400 (2) 17,313,400
Securities 5,796,000 8,235,000 14,031,000 (2,188,171) (1) 11,842,829
Federal funds 1,472,000 - 1,472,000 - 1,472,000
Certificates of deposit 654,000 - 654,000 - 654,000
Other earning assets 187,000 376,000 563,000 - 563,000
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Total interest income 20,536,000 13,447,000 33,983,000 (2,137,771) 31,845,229
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INTEREST EXPENSE
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Interest on deposits 9,821,000 6,084,000 15,905,000 72,000 (6) 15,977,000
Interest on borrowings 47,000 1,420,000 1,467,000 395,000 (8) 1,862,000
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Total interest expense 9,868,000 7,504,000 17,372,000 467,000 17,839,000
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Net interest income 10,668,000 5,943,000 16,611,000 (2,604,771) 14,006,229
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PROVISION FOR LOAN LOSS 100,000 60,000 160,000 160,000
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Net interest income after provision 10,568,000 5,883,000 16,451,000 (2,604,771) 13,846,229
NON-INTEREST INCOME
Service fees 192,000 275,000 467,000 - 467,000
Securities gains (losses) 102,000 102,000 102,000
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Total non-interest income 294,000 275,000 569,000 - 569,000
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NON-INTEREST EXPENSES
Salaries and employee benefits 3,419,000 1,902,000 5,321,000 (420,000) (10) 4,901,000
Occupancy and equipment 935,000 459,000 1,394,000 12,800 (3) 1,406,800
Merger costs - 460,000 460,000 460,000
Data Processing 425,000 260,000 685,000 - 685,000
Advertising 498,000 - 498,000 498,000
Other non-interest expense 1,750,000 1,035,000 2,785,000 - 2,785,000
Goodwill Amortization - - - 1,034,338 (4) 1,034,338
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Total non-interest expense 7,027,000 4,116,000 11,143,000 627,138 11,770,138
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Net income before taxes 3,835,000 2,042,000 5,877,000 (3,231,909) 2,645,091
PROVISION FOR INCOME TAX 1,443,000 912,000 2,355,000 (975,214) 1,379,786
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NET INCOME 2,392,000 1,130,000 3,522,000 (2,256,695) 1,265,305
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Sound Federal Bancorp
Footnotes to ProForma Consolidated Financial Statements
1. Represents the funds used to complete the Acquisition ($40.9 million), the
estimated fair market value adjustment related to Peekskill's securities
portfolio ($4.4 million) and the reclassification of Peekskill's securities
held to maturity portfolio as securities available for sale. The estimated
fair market value adjustment (premium) is assumed to have a life of 10
years. The adjustment is assumed to amortize on a straight-line basis over
this time period into interest on securities.
2. Represents the estimated fair market value adjustment relating to the loan
portfolio. The estimated life of this portfolio is assumed to be 9 years.
The adjustment is assumed to amortize on a straight-line basis over this
time period into interest and fees on loans.
3 Represents the estimated fair market value adjustment relating to premises
and equipment. The estimated life of these assets is assumed to be 30
years. The adjustment is assumed to amortize on a straight-line basis over
this time period into occupancy expenses.
4 Represents the estimate of the excess of the total direct acquisition costs
over the estimated fair value of the net assets acquired based upon
currently available information. Goodwill is expected to be amortized on a
straight-line basis over 15 years.
5. Represents the estimated income tax effects of the estimated purchase
accounting adjustments. The estimated income tax effect is assumed to be at
a marginal rate of 37.5%. The income tax effect is reflected in tax expense
during the period that the related purchase accounting adjustments (other
than the amortization of non-deductible goodwill) are amortized.
6 Represents the estimated fair market value adjustment relating to deposits.
The life of these liabilities is assumed to be 12 months. The adjustment is
assumed to amortize on a straight-line basis over this time period as an
increase in interest expense on deposits.
10. Represents an estimated liability for the settlement of amounts due to
various parties in connection with the Acquisition.
8. Represents the estimated fair market value adjustment relating to
borrowings. The estimated fair value adjustment is being amortized on a
straight-line basis over the remaining term to maturity or call date.
9. Represents the elimination of Peekskill's equity as of the date of the
transaction.
10. Represents the assumed reduction of Peekskill's expenses related to
Peekskill's Employee Stock Ownership Plan and Recognition and Retention
Plan as these plans will be necessarily eliminated given the nature of the
consideration utilized in the transaction (cash).