1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 14, 1996 May 16, 1996
(Date of Report) (Date of earliest
event reported)
Commission File Number: 1-13734
STANDARD FEDERAL BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2899274
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2600 West Big Beaver Road, Troy, Michigan 48084
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 810-643-9600
NOT APPLICABLE
(Former name or former address, if changed since last report)
2
ITEM 5. OTHER EVENTS
On April 9, 1996, the Office of Thrift Supervision ("OTS") informed Standard
Federal Bancorporation, Inc. (the "Company"), that it had approved the
Company's acquisition of Bell Bancorp, Inc. ("Bell"), and its wholly owned
subsidiary, Bell Federal Savings and Loan Association ("Bell Federal"). The
acquisition will be accomplished through the merger (the "Merger") of Bell with
and into a subsidiary of the Company and the subsequent merger of Bell Federal
with and into the Company's subsidiary, Standard Federal Bank ("Standard
Federal" or the "Bank"). On May 16, 1996, Bell will hold a special meeting of
stockholders, the primary purpose of which is to consider and vote on the
Merger. When approved by Bell stockholders at such meeting, the Company
intends to complete the Merger and its acquisition of Bell at the close of
business on June 7, 1996.
Bell is a Delaware corporation formed for the purpose of becoming a holding
company for Bell Federal. Its executive offices are located at 79 West Monroe
Street, Chicago, Illinois, and it operates its main banking office and 13
branch office locations in northern Illinois. At December 31, 1995, Bell had
total assets of $1.9 billion, total deposits of $1.6 billion and stockholders'
equity of $301.7 million, on a consolidated basis.
Item 7(a) below incorporates by reference financial statements of Bell for its
fiscal year ended March 31, 1995, which is its most recent fiscal year, and
financial statements of Bell as of and for the nine months ended December 31,
1995. Item 7(b) below presents unaudited pro forma consolidated financial
statements of the Company, as of and for the year ended December 31, 1995,
assuming that the Merger with Bell had been completed on January 1, 1995.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS OF BELL BANCORP, INC.
The following consolidated financial statements of Bell, together with
the related notes thereto and the report thereon of KPMG Peat Marwick
LLP, dated May 26, 1995, which have been incorporated by reference
into the Annual Report on Form 10-K of Bell for the fiscal year ended
March 31, 1995, are hereby incorporated by reference into this report:
Consolidated Statements of Financial Condition as of March 31,
1995 and 1994
Consolidated Statements of Earnings for the years ended March 31,
1995, 1994 and 1993
Consolidated Statements of Changes in Stockholders' Equity for the
years ended March 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended March
31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
The following consolidated financial statements of Bell, together with
the related notes thereto, are hereby incorporated by reference into
this report from the Bell Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1995:
Consolidated Statements of Financial Condition as of December 31,
1995 (unaudited) and March 31, 1995
Consolidated Statements of Earnings for the three and nine months
ended December 31, 1995 and 1994 (unaudited)
Consolidated Statements of Changes in Stockholders' Equity for the
nine months ended December 31, 1995 and 1994 (unaudited)
Consolidated Statements of Cash Flows for the nine months ended
December 31, 1995, 1994 and 1993 (unaudited)
Notes to Unaudited Consolidated Financial Statements
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(CONTINUED)
(B) PRO FORMA FINANCIAL INFORMATION
The following pro forma financial statements of the Company have been
prepared as if the acquisition of Bell had occurred on January 1,
1995, and are based on the assumptions described in the accompanying
notes thereto:
Index to Unaudited Pro forma Financial Statements Page
------------------------------------------------- ----
1) Unaudited Pro Forma Statement of Financial Condition at March 31, 1996 3
2) Unaudited Pro Forma Statement of Income for the Year Ended December 31, 1995 4
3) Unaudited Pro Forma Statement of Income for the Quarter Ended March 31, 1996 5
4) Notes to the Unaudited Pro Forma Consolidated Financial Statements 6-10
(C) EXHIBITS:
Exhibit
No. Description
------- -----------
23 Consent of KPMG Peat Marwick LLP, independent accountants 11
SIGNATURE 12
2
4
STANDARD FEDERAL BANCORPORATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
MARCH 31, 1996
(In Thousands)
Standard Pro Forma
Federal Bell Adjusting Entries
Bancorporation, Bancorp, Inc. --------------------- Pro Forma
Inc. (1) Combined Debit Credit Combined
--------------- ----------- ------------- ---------- --------- --------------
ASSETS
Cash $88,554 $18,604 $107,158 $100,000 $207,158
--------------- ----------- ------------- ---------- --------- --------------
Investment securities 218,395 111,590 329,985 $239 $160,000 170,224
Mortgage-backed securities held for trading 54,229 - 54,229 54,229
Mortgage-backed securities available for sale 717,423 - 717,423 717,423
Mortgage-backed securities 2,169,647 427,111 2,596,758 202,252 2,394,506
Loans receivable held for sale 967,297 - 967,297 967,297
Loans receivable:
Mortgage 7,994,966 1,324,001 9,318,967 15,555 9,334,522
Consumer/Commercial 704,249 20,000 724,249 724,249
--------------- ----------- ------------- ---------- --------- --------------
Total loans receivable 8,699,215 1,344,001 10,043,216 15,555 10,058,771
--------------- ----------- ------------- ---------- --------- --------------
Total earning assets 12,826,206 1,882,702 14,708,908 15,794 362,252 14,362,450
Real estate and other repossessed assets 6,892 4,863 11,755 11,755
Premises and equipment 195,548 5,435 200,983 5,000 205,983
Core deposit intangible 18,714 - 18,714 15,981 34,695
Cost in excess of fair value of
net assets acquired 119,099 - 119,099 50,293 169,392
Other assets 250,414 14,435 264,849 264,849
--------------- ----------- ------------- ---------- --------- --------------
Total assets $13,505,427 $1,926,039 $15,431,466 $187,068 $362,252 $15,256,282
=============== =========== ============= ========== ========= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $9,449,204 $1,598,057 $11,047,261 $11,047,261
FHLB advances and other long-term borrowings 1,877,329 10,000 1,887,329 $100,000 1,987,329
Securities sold under agreements to repurchase 759,375 - 759,375 759,375
--------------- ----------- ------------- ---------- --------- --------------
Total interest-bearing liabilities 12,085,908 1,608,057 13,693,965 100,000 13,793,965
Undisbursed payments on participations sold 107,675 - 107,675 107,675
Advance payments by borrowers for
taxes and insurance 130,769 7,471 138,240 138,240
Deferred federal income tax liability 64,429 997 65,426 4,875 70,301
Other liabilities 177,403 7,815 185,218 21,640 206,858
--------------- ----------- ------------- ---------- --------- --------------
Total liabilities 12,566,184 1,624,340 14,190,524 126,515 14,317,039
--------------- ----------- ------------- ---------- --------- --------------
STOCKHOLDERS' EQUITY:
Common stock and additional paid-in capital 234,401 151,126 385,527 $151,126 234,401
Retained earnings 689,910 227,255 917,165 227,255 689,910
Less: Treasury stock - (71,923) (71,923) 71,923 -
Less: Unearned employee stock ownership shares - (3,893) (3,893) 3,893 -
Less: Unearned association recognition and retention
shares - (866) (866) 866 -
Net unrealized loss on securities available
for sale, net of tax 14,932 - 14,932 14,932
--------------- ----------- ------------- ---------- --------- --------------
Total stockholders' equity 939,243 301,699 1,240,942 378,381 76,682 939,243
--------------- ----------- ------------- ---------- --------- --------------
Total liabilities and stockholders' equity $13,505,427 $1,926,039 $15,431,466 $378,381 $203,197 $15,256,282
=============== =========== ============= ========== ========= ==============
(1) The Bell Bancorp, Inc., Statement of Financial Condition reflects data as
of December 31, 1995, the most recent information filed with the Securities
and Exchange Commission.
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5
STANDARD FEDERAL BANCORPORATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1995
(In Thousands, Except Per Share Data)
Standard
Federal Pro Forma
Bancorporation, Bell Adjusting Pro Forma
Inc. Bancorp, Inc. Combined Entries Combined
--------------- ------------- --------- --------- ---------
INTEREST INCOME:
Investment securities $24,555 $4,388 $28,943 ($17,260) $11,683
Mortgage-backed securities 200,477 28,857 229,334 1,108 230,442
Loans receivable 700,671 96,721 797,392 (2,222) 795,170
--------- --------- --------- --------- ---------
Total 925,703 129,966 1,055,669 (18,374) 1,037,295
--------- --------- --------- --------- ---------
INTEREST EXPENSE:
Deposits 418,049 71,543 489,592 489,592
FHLB advances and other long-term borrowings 123,995 2,737 126,732 6,750 133,482
Federal funds purchased and reverse repurchase
agreements 61,175 - 61,175 61,175
--------- --------- --------- --------- ---------
Total 603,219 74,280 677,499 6,750 684,249
--------- --------- --------- --------- ---------
Net interest income 322,484 55,686 378,170 (25,124) 353,046
Provision for losses 1,304 3,398 4,702 4,702
--------- --------- --------- --------- ---------
Net interest income after provision for losses 321,180 52,288 373,468 (25,124) 348,344
--------- --------- --------- --------- ---------
NON-INTEREST INCOME:
Retail fees and charges 32,998 823 33,821 2,500 36,321
Loan servicing fee income, net 6,597 - 6,597 6,597
Gain on the sale of earning assets 20,694 227 20,921 20,921
Loss on the sale of real estate owned (1,271) (818) (2,089) (2,089)
Other 6,015 481 6,496 6,496
--------- --------- --------- --------- ---------
Total 65,033 713 65,746 2,500 68,246
--------- --------- --------- --------- ---------
OTHER EXPENSES:
Compensation and benefits 78,997 19,075 98,072 (6,844) 91,228
Occupancy and equipment 46,982 3,656 50,638 78 50,716
Federal insurance premium 19,379 3,501 22,880 22,880
Other 36,874 6,407 43,281 (3,178) 40,103
--------- --------- --------- --------- ---------
Total operating and administrative expenses 182,232 32,639 214,871 (9,944) 204,927
Amortization of cost in excess of fair value of net
assets acquired 15,780 - 15,780 5,636 21,416
--------- --------- --------- --------- ---------
Total 198,012 32,639 230,651 (4,308) 226,343
--------- --------- --------- --------- ---------
Income before provision for federal income taxes 188,201 20,362 208,563 (18,316) 190,247
Provision for federal income taxes 68,700 7,618 76,318 (5,318) 71,000
--------- --------- --------- --------- ---------
NET INCOME $119,501 $12,744 $132,245 ($12,998) $119,247
========= ========= ========= ========= =========
EARNINGS PER SHARE $3.70 $0.39 $4.09 ($0.40) $3.69
========= ========= ========= ========= =========
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STANDARD FEDERAL BANCORPORATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
QUARTER ENDED MARCH 31, 1996
(In Thousands, Except Per Share Data)
Standard
Federal Bell Pro Forma
Bancorporation, Bancorp, Inc. Adjusting Pro Forma
Inc. (1) Combined Entries Combined
--------------- -------------- ---------- ------------ -----------
INTEREST INCOME:
Investment securities $5,922 $1,401 $7,323 ($4,315) $3,008
Mortgage-backed securities 61,383 6,884 68,267 277 68,544
Loans receivable 175,182 24,771 199,953 (556) 199,397
--------- --------- --------- --------- ---------
Total 242,487 33,056 275,543 (4,594) 270,949
--------- --------- --------- --------- ---------
INTEREST EXPENSE:
Deposits 112,095 19,284 131,379 131,379
FHLB advances and other long-term borrowings 29,213 169 29,382 29,382
Federal funds purchased and reverse repurchase
agreements 13,053 - 13,053 1,688 14,741
--------- --------- --------- --------- ---------
Total 154,361 19,453 173,814 1,688 175,502
--------- --------- --------- --------- ---------
Net interest income 88,126 13,603 101,729 (6,282) 95,447
Provision for losses 605 805 1,410 1,410
--------- --------- --------- --------- ---------
Net interest income after provision for losses 87,521 12,798 100,319 (6,282) 94,037
--------- --------- --------- --------- ---------
NON-INTEREST INCOME:
Retail fees and charges 8,469 216 8,685 625 9,310
Loan servicing fee income, net 2,991 - 2,991 2,991
Gain on the sale of earning assets 5,681 9 5,690 5,690
Loss on the sale of real estate owned (113) (127) (240) (240)
Other 1,207 345 1,552 1,552
--------- --------- --------- --------- ---------
Total 18,235 443 18,678 625 19,303
--------- --------- --------- --------- ---------
OTHER EXPENSES:
Compensation and benefits 21,345 4,709 26,054 (1,711) 24,343
Occupancy and equipment 12,190 828 13,018 (280) 12,738
Federal insurance premium 5,607 886 6,493 6,493
Other 10,941 2,176 13,117 (597) 12,520
--------- --------- --------- --------- ---------
Total operating and administrative expenses 50,083 8,599 58,682 (2,588) 56,094
Amortization of cost in excess of fair value of net
assets acquired 4,082 - 4,082 1,314 5,396
--------- --------- --------- --------- ---------
Total 54,165 8,599 62,764 (1,274) 61,490
--------- --------- --------- --------- ---------
Income before provision for federal income taxes 51,591 4,642 56,233 (4,383) 51,850
Provision for federal income taxes 19,400 1,814 21,214 (1,314) 19,900
--------- --------- --------- --------- ---------
NET INCOME $32,191 $2,828 $35,019 ($3,069) $31,950
========= ========= ========= ========= =========
EARNINGS PER SHARE $1.00 $0.09 $1.09 ($0.10) $0.99
========= ========= ========= ========= =========
(1) The Bell Bancorp, Inc., Statement of Income reflects data for the quarter
ended December 31, 1995, the most recent information filed with the
Securities and Exchange Commission.
5
7
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF PENDING ACQUISITION
As noted in Item 5 on page 1 herein, the Company anticipates the
consummation of its acquisition of Bell on June 7, 1996. All
requisite regulatory approvals have been obtained and a special
meeting of Bell stockholders to consider and vote on the Merger has
been scheduled for May 16, 1996.
Under the terms of the definitive merger agreement between the parties
dated Decemeber 14, 1995, the Company will pay approximately $354.5
million to acquire Bell. This transaction is expected to be funded
through a combination of cash and cash equivalents available to the
Company. The acquisition will be accounted for using the purchase
method of accounting, under which all assets acquired and liabilities
assumed are adjusted to fair value as of the of acquisition date. The
aggregate core deposit premium and goodwill resulting from this
acquisition is expected to range between $57.0 million and $62.0
million.
The pro forma adjusting entries included in the Consolidated
Statements of Financial Condition and Income include all estimated
purchase accounting adjustments, estimated overhead synergies,
estimated increases in retail banking fees and charges resulting from
a greater emphasis on retail banking operations in Bell's market
areas, amortization of the various valuation adjustments and the
procurement of $100.0 million proceeds from a contemplated medium-term
debt financing by the Company, which will be invested in the Bank as
an additional captial contribution. However, if no borrowing occurs
by June 30, 1996, the Bank could fall slightly below the minimum
levels of capital necessary to be categorized as "well-capitalized" by
the federal banking agencies. See Note No. 4 herein for further
discussion. If the Bank were to fall short of achieving the
"well-capitalized" status, it would not be subject to any significant
operating restrictions by the various regulatory agencies, since it
would continue to substantially exceed minimum capital requirements.
However, the rate paid in the future for deposit insurance to the
Federal Deposit Insurance Corporation ("FDIC") could be increased by
$.03 per $100 of deposit balances until the Bank regains its
well-capitalized status.
All detailed information concerning the specific nature of the
purchase accounting adjustments has been included in the Company's
Application for Merger submitted to the OTS in February 1996.
2. FINANCIAL SERVICES INDUSTRY REFORM ISSUE
Various Committees of Congress and various federal regulatory banking
agencies, including the FDIC, are currently discussing changes to the
federal deposit insurance system to narrow or eliminate the difference
in financial characteristics between the Bank Insurance Fund ("BIF")
and the Savings Association Insurance Fund ("SAIF"). One of the
proposals being discussed would, among other things, assess thrifts,
such as Standard Federal and Bell Federal, a one-time fee to bring the
SAIF fund into parity with the BIF fund. In the event that such a
proposal was to become law after June 7, 1996, Standard Federal would
be required to record a one-time charge to earnings of approximately
$57.0 million, or $1.77 per share, after-tax, based on aggregate March
31, 1995 insured deposit balances of both Standard Federal and Bell
Federal and a fee of 0.85% of insured deposit balances. Thereafter,
the Bank's annual deposit insurance expense would be reduced for the
foreseeable future by approximately 80% to 100% of current premiums.
A premium reduction of this magnitude would represent annual after-tax
cost savings to the Bank of approximately $11.9 million to $14.9
million (i.e., $0.37 per share to $0.46 per share), based upon the
actual aggregate 1995 deposit insurance premiums incurred by Standard
Federal and Bell Federal. If such a proposal is enacted during the
second quarter of 1996, and the Bank recognizes this one-time charge
to its earnings and, therefore, its capital as well during that
quarter, the Bank could temporarily fall further below the minimum
levels of capital necessary to be categorized as "well-capitalized" by
the federal banking agencies as discussed in both Note No. 1 and No. 4
herein. Accordingly, the pro forma consolidated financial statements
presented herein have been prepared on a basis which reflects $100.0
million of medium-term financing, which would further capitalize the
Bank so as to remain "well-capitalized."
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. DETAILED DESCRIPTION OF PRO FORMA ADJUSTING ENTRIES
The pro forma information presented is not necessarily indicative of
the results of operations or the combined financial position that
would have resulted had the merger been consummated at the beginning
of the periods indicated, nor is it necessarily indicative of the
results of operations in future financial position of the combined
entities. It is anticipated that the merger will be consummated on
June 7, 1996.
The pro forma combined financial statements do not include the
anticipated earnings of Bell from December 31, 1995, through the
anticipated closing date of June 7, 1996. The historical financial
statements also exclude any post-closing growth in the Bell franchise.
The resolution of the issue concerning the disparity in federal
deposit insurance premiums discussed in detail in Note No. 2 herein is
not assumed to occur prior to the June 7, 1996, closing date.
Accordingly, when and if resolution occurs, the impact will be fully
reflected in the Company's then-current period's results of
operations. No purchase accounting recognition of this "contigent
liability" within these pro forma financial statements is warranted,
since this issue's outcome is neither probable of occurrence nor is
its cost reasonably estimable as of the date of this filing.
For purposes of this filing, the purchase price is assumed to be
funded through proceeds from the sale of $160.0 million of Bell's
short-term investment securities and $194.5 million of Bell's
mortgage-backed securities at no gain or loss.
The pro forma combined, consolidated financial statements include the
accounts of the Company, Standard Federal, Bell and Bell Federal.
Significant intercompany balances and transactions have been
eliminated. The pro forma adjusting entries are displayed below (in
thousands):
(a) Debit - Cash $100,000
Credit-Other Borrowings $100,000
To record the procurement of medium-term financing which will be used to provide additional
capital to the Company's wholly owned subsidiary, Standard Federal Bank.
(b) Debit - Common Stock and Paid-in Capital $151,126
Debit - Retained Earnings 227,255
Debit - Cost in Excess of Fair Value of Net Assets Acquired ("Goodwill") 52,796
Credit - Treasury Stock $ 71,923
Credit - Unearned ESOP Shares 3,893
Credit - Unearned Restricted Stock 866
Credit - MBS Available for Sale 194,495
Credit - Investment Securites Available for Sale 160,000
To record the aggregate purchase price for Bell and the goodwill resulting from the excess of
the purchase price over Bell's total equity position.
(c) Debit - Investment Securities $239
Debit - Mortgage Loans Receivable 15,555
Debit - Premises and Equipment 5,000
Debit - Core Deposit Intangible 15,981
Credit - Mortgage-Backed Securities $ 7,757
Credit - Other Liabilities - Severance and Other Employee-Related Costs 11,000
Credit - Other Liabilities - Other Merger-Related Costs 10,640
Credit - Goodwill 2,503
Credit - Deferred Federal Income Taxes 4,875
To record the various purchase accounting premiums and discounts on
Bell's assets and liabilities, the 1% core deposit intangible and
various merger-related expenses.
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. SUMMARY OF CAPITAL REQUIREMENTS
Pursuant to the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, the OTS has prescribed three separate minimum
capital-to-assets requirements which must be met by the Bank: (1) a
risk-based capital requirement that "total capital" be at least equal
to 8% of "risk-weighted assets"; (2) a tangible capital requirement
that "tangible capital" be at least equal to 1.5% of "adjusted total
assets"; and (3) a leverage ratio requirement that "core capital" be
at least equal to 3.0% of "adjusted total assets." Capital standards
for thrift institutions must be "no less stringent" than those
applicable to national banks. The capital standards applicable to
national banks require a leverage ratio equal to 4% of adjusted assets
in order for an entity to be categorized as at least being adequately
capitalized. As such, the general minimum requirement of core capital
at least equal to 3% of adjusted total assets, which has been de facto
superseded, was applicable only to those institutions that received a
composite rating of one, which is the highest rating under the "CAMEL"
rating system for financial institutions, and those which were, in
general, considered strong organizations having well-diversified
risks, including no undue interest rate risk exposure, excellent
control systems, good earnings, high asset quality and liquidity and
well managed on- and off-balance sheet assets. All other thrift
institutions must maintain core capital of 3% plus an additional 1% to
2%, as established by the OTS on a case-by-case basis. Therefore, the
Bank believes that it is required to maintain core capital of at least
4% of adjusted total assets.
The table below presents the Bank's position relative to the three
current regulatory capital requirements. The Bank meets all of the
capital requirements mandated by the OTS at March 31, 1996.
SUMMARY OF CAPITAL REQUIREMENTS - STANDARD FEDERAL BANK
MARCH 31, 1996
(In thousands)
Stated Required
Capital Capital Excess
Stated As a % of Required As a % of Excess Capital
Capital Assets (1) Capital Assets (1) Capital Percentage
----------- ---------- ----------- ----------- ------------ ----------
Total consolidated stockholders' equity of
the Company $939,243 6.95%
Less excess capitalization of the Company (11,627)
--------
Total stockholders' equity of the Bank 927,616 6.87%
Adjustments for tangible, core
and total capital:
Goodwill, net of deferred tax liability
on core deposit premium (114,137)
Total core deposit intangible (18,714)
Valuation adjustment for
mortgage servicing rights (9,626)
Unrealized net gain on mortgage-backed
securities available for sale (14,932)
Investments in non-includable
subsidiaries (4,265)
---------
Total tangible capital 765,942 5.75% $199,888 1.50% $566,054 4.25%
Qualifying core deposit intangible 18,714
---------
Total core ("Tier 1") capital 784,656 5.88% $400,337 3.00% $384,319 2.88%
General allowance for loan
losses 33,918
---------
Total capital ("risk-based") $818,574 12.43% $526,746 8.00% $291,828 4.43%
========
1) The regulatory capital requirements are calculated as a percentage of
adjusted assets, as defined by OTS regulation.
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. SUMMARY OF CAPITAL REQUIREMENTS (CONTINUED)
SELECTED CAPITAL INFORMATION - STANDARD FEDERAL BANCORPORATION, INC.
MARCH 31, 1996
(In thousands)
Stated Capital
Stated As a % of
Capital Adjusted Assets
----------- ---------------
Total stockholders' equity $939,243 6.95%
Less goodwill and core deposit intangible (137,813)
--------
Total tangible capital $801,430 6.00%
========
The table below presents the Bank's pro forma position relative to
the three current regulatory capital requirements.
PRO FORMA SUMMARY OF CAPITAL REQUIREMENTS - STANDARD FEDERAL BANK
MARCH 31, 1996
(In thousands)
Pro Forma Required
Capital Capital Excess
Pro Forma As a % of Required As a % of Excess Capital
Capital Assets (1) Capital Assets (1) Capital Percentage
----------- ---------- ----------- ----------- ------------ ----------
Total consolidated stockholders' equity of
the Company $939,243 6.16%
Less excess capitalization of the Company (11,627)
Additional capital contribution to
the Bank 100,000
---------
Total stockholders' equity of the Bank 1,027,616 6.74%
Adjustments for tangible, core
and total capital:
Goodwill, net of deferred tax liability
on core deposit premium (158,837)
Total core deposit intangible (34,695)
Valuation adjustment for
mortgage servicing rights (9,626)
Unrealized net gain on mortgage-backed
securities available for sale (14,932)
Investments in non-includable
subsidiaries (4,265)
---------
Total tangible capital 805,261 5.36% $225,214 1.50% $580,047 3.86%
Qualifying core deposit intangible 18,714
---------
Total core ("Tier 1") capital 823,975 5.48% $450,989 3.00% $372,986 2.48%
General allowance for loan
losses 38,918
---------
Total capital ("risk-based") $862,893 11.66% $592,000 8.00% $270,893 3.66%
========
1) The regulatory capital requirements are calculated as a percentage of
adjusted assets, as defined by OTS regulation.
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. SUMMARY OF CAPITAL REQUIREMENTS (CONTINUED)
SELECTED PRO FORMA CAPITAL INFORMATION - STANDARD FEDERAL
BANCORPORATION, INC.
MARCH 31, 1996
(In thousands)
Pro Forma Capital
Pro Forma As a % of
Capital Adjusted Assets
----------- ---------------
Total stockholders' equity $939,243 6.16%
Less goodwill and core deposit premium (204,087)
--------
Total tangible capital $735,156 4.88%
========
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EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
The Board of Directors
Bell Bancorp, Inc.:
We consent to incorporation by reference in the Current Report on Form 8-K of
Standard Federal Bancorporation, Inc., of our report dated May 26, 1995,
relating to the Consolidated Statements of Financial Condition of Bell Bancorp,
Inc., and subsidiary as of March 31, 1995 and 1994, and the related
Consolidated Statements of Earnings, Changes in Stockholders' Equity and Cash
Flows for each of the years in the three-year period ended March 31, 1995,
which report has been incorporated by reference in the Annual Report on Form
10-K of Bell Bancorp, Inc., for the year ended March 31, 1995.
/s/KPMG Peat Marwick LLP
- ------------------------
Chicago, Illinois
May 13, 1996
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
STANDARD FEDERAL BANCORPORATION, INC.
By: /s/Joseph Krul
------------------------------------
Joseph Krul, Senior Vice President &
Chief Financial Officer
Date: May 13, 1996
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