UNITED STATES
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
February 1, 1996
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Date of Report (Date of earliest event reported)
Susquehanna Bancshares, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-10674 23-2201716
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File Number) ID No.)
26 North Cedar Street
Lititz, Pennsylvania 17543
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(Address of principal executive offices) (Zip Code)
(717) 626-4721
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(registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 31, 1996, Susquehanna Bancshares, Inc. (herein referred to as
"SBI" or the "Registrant"), a Pennsylvania business corporation registered as a
bank holding company under the Bank Holding Company Act of 1956, and Susquehanna
Bancshares South II, Inc. ("SBI Merger Sub II"), a Maryland corporation and a
wholly-owned subsidiary of SBI, consummated the transactions contemplated in the
Agreement and Plan of Affiliation, dated April 8, 1994, between and among SBI,
SBI Merger Sub II, Fairfax Financial Corporation ("FFC"), a Maryland
corporation, and Fairfax Savings Bank, F.S.B. ("Fairfax Savings"), a federally
chartered, stock savings bank and a wholly-owned subsidiary of FFC (the
"Affiliation Agreement"). The Affiliation Agreement, which was attached to the
Registrant's Current Report on Form 8-K filed with the Securities and Exchange
Commission ("Commission") on May 5, 1994, is incorporated herein by reference.
A copy of the Press Release announcing the consummation of the transactions
contemplated in the Affiliation Agreement is filed as an exhibit to this Current
Report on Form 8-K.
The following is a summary of the transactions consummated on January 31,
1996 pursuant to the terms of the Affiliation Agreement. This summary is
qualified in its entirety by reference to the full text of the Affiliation
Agreement.
Pursuant to the Affiliation Agreement, on February 1, 1996 (the "Effective
Date"), SBI Merger Sub II merged with and into FFC (the "Merger"), with FFC as
the surviving entity (sometimes referred to as the "Surviving Corporation").
The effective time of the Merger, determined in accordance with the Affiliation
Agreement, was at 12:01 a.m. on February 1, 1996 (herein, the "Effective Time").
As a result of the Merger, FFC became a direct, wholly-owned subsidiary of SBI,
and Fairfax Savings became a second-tier subsidiary of SBI. Fairfax Savings, a
federal savings bank, has total assets of approximately $455,000,000 and
operates nine depository offices in Maryland, principally in the vicinity of
Baltimore.
At the Effective Time, the articles of incorporation and bylaws of SBI
Merger Sub II became the articles of incorporation and bylaws of the Surviving
Corporation and the name of the Surviving Corporation was changed to
"Susquehanna Bancshares South II, Inc." The shares of common stock of SBI
Merger Sub II issued and outstanding immediately prior to the Effective Time, by
virtue of and after the Merger, remained outstanding and unchanged, and now
constitute the issued and outstanding shares of the capital stock of the
Surviving Corporation. All of the outstanding capital stock of Fairfax Savings
is owned by the Surviving Corporation, which, in turn, is wholly owned by SBI.
At the Effective Time, each share of issued and outstanding FFC capital
stock, including 60,000 shares of Voting Common Stock, par value $1.00 per
share, and 9,000,000 shares of Non-Voting Common Stock, par value of $0.01 per
share, was sold to SBI for a total consideration of $62,725,496, with a per
share purchase price of $6.92. By virtue of the formula provided in the
Affiliation Agreement, the consideration was determined on the basis of a base
cash price of $53,250,000, increased by (1) the dollar-for-dollar amount by
which FFC's consolidated stockholder's equity at the Effective Time, reduced by
FFC's goodwill at the Effective Time, exceeded $35,500,000, (2) plus an amount
equal to one-half of the aggregate of the allowance for losses on loans
receivable and the investments in real estate maintained by FFC at the Effective
Time. In addition, at closing 9,060,000 units of membership interest
(constituting all of the outstanding units of membership interest) in Securities
Holdings LLC, a newly-formed Maryland limited liability company formed to hold
certain assets of FFC and Fairfax Savings described in Annex 5.2(e) of the
Affiliation Agreement, were distributed to FFC's stockholders.
Susquehanna funded the merger consideration by the offering of 1,495,000
shares of its Common Stock ("Common Stock Offering") and the sale of $35,000,000
of Senior Notes ("Senior Notes Offering").
The final form of the prospectus for the Common Stock Offering (the "Common
Stock Prospectus") was filed by SBI on November 30, 1995 with the Commission as
part of a Registration Statement on Form S-3 (the "Common Stock Registration
Statement"). The Common Stock Registration Statement and the Common Stock
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Prospectus are incorporated herein by reference. The net proceeds of the Common
Stock Offering were approximately $37,600,000.
In addition to the proceeds of the Common Stock Offering, SBI raised
$34,500,000 through the Senior Notes Offering, consisting of 6.30% Senior Notes
Due 2003. The final form of the prospectus for the Senior Notes Offering (the
"Senior Notes Prospectus") was filed by SBI on January 9, 1996 with the
Commission as part of a Registration Statement on Form S-3 (the "Senior Notes
Registration Statement"). The Senior Notes Registration Statement and the
Senior Notes Prospectus are incorporated herein by reference.
The total net proceeds to SBI resulting from the Common Stock Offering and
the Senior Notes Offering was approximately $72,100,000. The amount of net
proceeds in excess of the cash consideration paid for FFC, approximately
$9,400,000, is being used for general corporate purposes.
There were no relationships, material or otherwise, between FFC, Fairfax
Savings and any person who controlled FFC and Fairfax Savings on the one side,
and the Registrant and SBI Merger Sub II or any of Registrant's affiliates, or
any director or officer of the Registrant, or any associate of any such director
or officer, on the other side, prior to the Effective Date. In accordance with
the Affiliation Agreement, at the Effective Time, Robert S. Bolinger, Richard M.
Cloney, George J. Morgan and John M. Denlinger, all of whom are current
directors of SBI, comprise the entire Board of Directors of the Surviving
Corporation. Prior to the Effective Date of the acquisition of FFC by SBI, FFC
was controlled by Malcolm C. Berman.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
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Audited consolidated financial information of Fairfax Financial Corporation
as of September 30, 1995 and 1994 and for the years ended September 30, 1995,
1994 and 1993 are presented in the Current Report on Form 8-K filed by
Registrant with the Commission on November 21, 1995, which is hereby
incorporated by reference.
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(b) PRO FORMA FINANCIAL INFORMATION.
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An unaudited pro forma combined condensed statement of income giving
effect, as of December 31, 1994, to the Fairfax Merger, together with an
unaudited pro forma combined condensed balance sheet and statement of income,
each as of September 30, 1995 and also giving effect to the Fairfax Merger, are
contained in the Registration Statement on Form S-3 filed by Registrant with the
Commission on January 9, 1996, which is hereby incorporated by reference.
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(c) EXHIBITS.
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Reference is made to the Exhibit Index annexed hereto and made a part
hereof.
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SIGNATURES
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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.
SUSQUEHANNA BANCSHARES, INC.
Date: February 14, 1996 By: /s/ Richard M. Cloney
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Richard M. Cloney
Vice President and Secretary
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EXHIBIT INDEX
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EXHIBIT PAGE
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2 A copy of the Affiliation Agreement, which was attached to the 9
Registrant's Current Report on Form 8-K filed with the Commission
on May 5, 1994, is incorporated herein by reference.
4A A copy of the Registration Statement on Form S-3 filed with the 10
Commission on November 30, 1995, as well as the Prospectus contained
therein, are incorporated herein by reference.
4B A copy of the Registration Statement on Form S-3 filed with the 11
Commission on January 9, 1996, as well as the Prospectus contained
therein, are incorporated herein by reference.
99 Additional Exhibits
Press Release of the Registrant, Dated February 2, 1996, Regarding 12
Consummation of the Merger
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