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EXHIBIT 99.1
Press Release
June 15, 2001
*** FOR IMMEDIATE RELEASE ***
JOINT NEWS RELEASE
ANCHOR BANCORP WISCONSIN INC.
LEDGER CAPITAL CORP.
Contact persons:
Douglas J. Timmerman, President James D. Smessaert, President
Anchor BanCorp Wisconsin Inc. Ledger Capital Corp.
(608) 252-8782 (414) 290-7900
Anchor BanCorp Wisconsin Inc. and Ledger Capital Corp. to Merge
Madison and Glendale, WI. Anchor BanCorp Wisconsin Inc. ("Anchor"), Madison,
Wisconsin, (NASDAQ:"ABCW") and Ledger Capital Corp. ("Ledger"), Glendale,
Wisconsin (NASDAQ: "LEDG") announced today they have entered into a definitive
agreement providing for the merger of Ledger with and into Anchor. Anchor is the
parent holding company for AnchorBank, fsb, a $3.13 billion financial
institution with 49 full service offices and 3 lending only facilities in 36
Wisconsin cities. Ledger is the parent holding company for Ledger Bank, S.S.B. a
$507 million financial institution with 4 full service offices and one limited
service office in 3 Wisconsin cities. Ledger recently changed its name from
Hallmark Capital Corp., while Ledger Bank was previously known as West Allis
Savings Bank.
James D. Smessaert, President of Ledger said, "We believe the proposed merger is
in the long-term interests of both our customers and our shareholders. Our
shareholders will receive shares in a company whose management and directors
have a long-term track record of increasing stockholder value. For our
customers, it is a merger of neighbors, so all Ledger Bank offices will continue
to operate. This means that you will see the same friendly people cashing your
checks, taking your deposits and opening your accounts. Our customers will
continue to experience excellence in service, and additionally, they will be
able to do business in Anchor offices throughout the state."
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Douglas J. Timmerman, President of Anchor said, "We look forward to welcoming
the shareholders and customers of Ledger Bank to the AnchorBank family. We are
exceptionally pleased to be able to expand both personal and business banking
services in the largest metropolitan area of the state. With this merger, Anchor
will have offices in the five largest population areas in the State of
Wisconsin. Anchor customers will have increased access to their accounts and
shareholders will own a significantly stronger franchise."
Pursuant to the merger agreement, Ledger shareholders will have the right to
elect to receive, for each share of Ledger common stock they own, either (i)
1.10 shares of Anchor common stock (the "Exchange Ratio"), or (ii) an amount of
cash equal to the Exchange Ratio multiplied by the closing price of Anchor
common stock as quoted on NASDAQ as of the effective time of the merger.
However, the merger agreement provides that the total number of shares of Ledger
common stock that may be converted to cash cannot exceed 20% of the total number
of shares of Ledger common stock outstanding. Accordingly, to the extent cash
elections by Ledger shareholders exceed the 20% ceiling, certain allocation
procedures outlined in the merger agreement will apply and cash elections in
excess of the 20% ceiling will be treated as elections to receive Anchor common
stock. Based on Anchor's closing stock price of $14.78 on June 15, 2001, the
transaction has an approximate total value of $42.5 million, and represents a
price of $16.26 for each Ledger share. Ledger shareholders will receive election
forms explaining their stock and cash election rights, and the procedure for
making their election, following receipt of shareholder approval of the
transaction.
The agreement does not provide for an adjustment in the Exchange Rate. Ledger
has been granted the right to terminate the transaction if Anchor's average
stock price for a specified measurement period declines by more than 15 percent
relative to the SNL Securities Midwest Thrift Index (the "Index"); similarly,
Anchor has been granted the right to terminate the transaction if its average
stock price over the same measurement period increases by more than 15 percent
relative to the Index.
The merger agreement permits Ledger, to the extent permitted by applicable law
and regulations, to continue its previously-announced open-market stock
repurchase program and to repurchase in the open market up to 5% of its stock,
or a greater percentage with Anchor's approval. Anchor intends to continue to
effect open-market purchases of Anchor stock from time to time in accordance
with its previously announced open-market stock repurchase program, to the
extent permitted by applicable law and regulations.
As part of the proposed transaction, Ledger is entitled to receive a $1 million
termination fee if Anchor wrongfully terminates the merger agreement, and Anchor
would be entitled to a $1 million termination fee if Ledger terminates the
agreement under certain circumstances. In addition, Ledger has granted Anchor an
option to purchase shares of Ledger common stock in an amount equal to 19.9% of
Ledger's outstanding shares of common stock under certain conditions.
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Under the terms of the merger agreement, the merger will be accomplished through
a tax-free exchange of shares of Anchor common stock and accounted for as a
purchase transaction. However, the transaction will be taxable with respect to
those Ledger shareholders who elect to receive, and receive, cash in exchange
for their shares of Ledger common stock.
The Board of Directors of the combined company will include all the existing
Board members of Anchor and James D. Smessaert from the Ledger Board.
Consummation of the merger is subject to applicable regulatory approvals and to
approval by Ledger's shareholders. In connection with the approval of the
transaction, Ledger's Board has received a fairness opinion from its financial
advisor, William Blair & Company, and Anchor's Board has received a fairness
opinion from its financial advisor, Howe Barnes Investments.
The parties expect that the merger, if approved, will be completed in the fourth
quarter of calendar 2001. Anchor expects that, after it has had the opportunity
to integrate Ledger's business with its own, it will be able to achieve cost
savings of approximately 20% of Ledger's historical operating expense. If the
merger is completed in the anticipated time frame and Anchor is able to realize
these cost savings, Anchor currently projects that the merger will have no
effect on its earnings during its fiscal year ending March 31, 2002, the year in
which the merger is expected to be completed, and that it will be approximately
$0.04 to $0.05 per-share accretive to earnings in Anchor's March 31, 2003 fiscal
year, determined by excluding amortization of goodwill under the proposed FASB
changes to the accounting treatment for business combinations. Additionally, the
parties believe there are significant opportunities for revenue synergies
resulting from mortgage, commercial and consumer loan growth.
Information about AnchorBank's products and services can be accessed on the
Internet at http://www.anchorbank.com. Information about Ledger Bank can be
accessed on the Internet at http://www.ledgerbank.com.
Anchor plans to file with the U.S. Securities and Exchange Commission (the
"SEC") a Registration Statement on Form S-4, and Ledger plans to file a Proxy
Statement with the SEC, with respect to the proposed merger described in this
news release. The parties expect to mail a Combined Proxy Statement/Prospectus
to Ledger shareholders containing information about the merger.
WE URGE YOU TO READ THE REGISTRATION STATEMENT AND THE COMBINED PROXY
STATEMENT/PROSPECTUS CAREFULLY WHEN THEY BECOME AVAILABLE. The Registration
Statement and the Combined Proxy Statement/Prospectus will contain important
information about Anchor, Ledger and about the proposed merger. You will be able
to obtain free copies of these documents (when they become available) through
the web site maintained by the SEC at http://www.sec.gov.
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Shareholders can also obtain copies of any documents Ledger or Anchor have filed
with the SEC by contacting their respective investor relations departments.
Ledger and its directors, executive officers and certain employees may be
considered participants in the solicitation of proxies in connection with the
proposed merger. Information concerning Ledger's directors and executive
officers can be found in Ledger's Annual Report on Form 10-K for the year ended
June 30, 2000 and proxy statement for Ledger's 2000 annual shareholders' meeting
as filed with the SEC. Some directors and executive officers of Ledger have
direct or indirect interests in the merger due to their ownership of common
stock and options of Ledger and the vesting of options and rights to severance
payments in connection with the merger. Additional information regarding the
participants in the solicitation will be contained in the Combined Proxy
Statement/Prospectus.
This news release contains forward-looking statements, including estimates of
future operating results and other forward-looking financial information for
Anchor BanCorp Wisconsin Inc., Ledger Capital Corp. and the combined company to
be created by the merger. These estimates constitute forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act of 1995).
These forward-looking statements are based on various assumptions, including the
assumption that the parties will complete the merger as currently contemplated.
These forward-looking statements, and the assumptions, involve significant risks
and uncertainties, many of which are beyond the control of Anchor or Ledger.
Actual results and other financial information may differ materially from the
results and financial information presented in these forward-looking statements.
Factors that might cause such a difference include, but are not limited to: (1)
uncertainties with respect to the timing and completion, and the accounting and
tax treatment, of the proposed merger; (2) currently-anticipated cost savings
from the merger cannot be fully realized or realized within the expected time
frame; (3) revenues following the merger are lower than expected; (4)
competitive pressures among financial institutions increase significantly; (5)
unanticipated costs or difficulties related to the integration of the businesses
of Anchor and Ledger are greater than expected; (6) general economic conditions
are less favorable than expected; (7) movements in market interest rates that
reduce the companies' margins; (8) legislation or regulatory changes adversely
affect the businesses in which the combined company will be engaged; and (9)
business, competitive, operational and other risk factors identified or
discussed in public filings made by Anchor or Ledger in filings with the
Securities and Exchange Commission.