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
June 14, 1996 June 7, 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 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 7, 1996, Standard Federal Bancorporation, Inc. (the "Company"),
completed its acquisition of Bell Bancorp, Inc. ("Bell"). The acquisition was
accomplished through the merger (the "Merger") of Bell with and into a
subsidiary of the Company and the subsequent merger of Bell's wholly owned
subsidiary, Bell Federal Savings and Loan Association ("Bell Federal") with and
into the Company's wholly owned subsidiary, Standard Federal Bank (the "Bank").
The acquisition was completed pursuant to the Agreement and Plan of
Reorganization (the "Agreement"), dated December 14, 1995. The Agreement is
included as Exhibit 2 to this report.
Under the terms of the Agreement, the Company paid approximately $354.5 million
to acquire all of the outstanding shares (and unexercised stock options) of
Bell. The transaction was funded through a combination of cash and cash
equivalents available to the Company.
Prior to the execution of the Agreement, there was no material relationship
between the Company and Bell or between any officers or directors of the
Company and the officers or directors of Bell.
Item 7(a) below presents the financial statements of Bell for its fiscal year
ended March 31, 1996, which is its most recent fiscal year. Item 7(b) below
presents unaudited pro forma consolidated financial statements of the Company,
as of March 31, 1996, 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 24, 1996, as of March 31, 1996 and 1995, and for each
of the years in the three year period ended March 31, 1996 are
included in this report as Exhibit 99.
Consolidated Statements of Financial Condition as of March 31, 1996
and 1995
Consolidated Statements of Earnings for the years ended March 31,
1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders' Equity for the
years ended March 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended March 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements
(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
1
3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(CONTINUED)
(C) EXHIBITS:
Exhibit
No. Description
------- -----------
2 Agreement and Plan of Reorganization, dated December 14, 1995 (Schedules to this exhibit
have not been filed, and the registrant hereby agrees to furnish supplementally a copy of
any omitted schedule to the Commission upon request).
23 Consent of KPMG Peat Marwick LLP, independent certified public accountants
99 Additional Exhibits. Bell Bancorp, Inc. and Subsidiary Consolidated Financial Statements
as of March 31, 1996 and 1995, and for each of the years in the three year period ended
March 31, 1996 (with Independent Auditors' Report).
SIGNATURE
2
4
STANDARD FEDERAL BANCORPORATION, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
MARCH 31, 1996
(In Thousands)
Standard Pro Forma
Federal Adjusting Entries
Bancorporation, Bell -------------------- Pro Forma
Inc. Bancorp, Inc. Combined Debit Credit Combined
--------------- ------------- -------- -------------------- -----------
Assets
Cash $ 88,554 $ 15,304 $ 103,858 $100,000 $ 203,858
----------- ---------- ----------- -------- -------- -----------
Investment securities 218,395 179,401 397,796 $ 38 $160,000 237,834
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 2,169,647 411,982 2,581,629 205,469 2,376,160
Loans receivable held for sale 967,297 - 967,297 967,297
Loans receivable:
Mortgage 7,994,966 1,286,275 9,281,241 2,740 9,283,981
Consumer/Commercial 704,249 20,000 724,249 724,249
----------- ---------- ----------- -------- -------- -----------
Total loans receivable 8,699,215 1,306,275 10,005,490 2,740 10,008,230
----------- ---------- ----------- -------- -------- -----------
Total earning assets 12,826,206 1,897,658 14,723,864 2,778 365,469 14,361,173
Real estate and other repossessed assets 6,892 3,094 9,986 9,986
Premises and equipment 195,548 5,321 200,869 3,000 203,869
Core deposit intangible 18,714 - 18,714 15,000 33,714
Cost in excess of fair value of net assets acquired 119,099 - 119,099 67,544 186,643
Other assets 250,414 17,077 267,491 267,491
----------- ---------- ----------- -------- -------- -----------
Total assets $13,505,427 $1,938,454 $15,443,881 $188,322 $365,469 $15,266,734
=========== ========== =========== ======== ======== ===========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $ 9,449,204 $1,604,325 $11,053,529 $11,053,529
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 1,614,325 13,700,233 100,000 13,800,233
Undisbursed payments on participations sold 107,675 - 107,675 107,675
Advance payments by borrowers for taxes and
insurance 130,769 6,676 137,445 137,445
Deferred federal income tax liability 64,429 2,673 67,102 5,298 72,400
Other liabilities 177,403 7,395 184,798 24,940 209,738
----------- ---------- ----------- -------- -------- -----------
Total liabilities 12,566,184 1,631,069 14,197,253 130,238 14,327,491
----------- ---------- ----------- -------- -------- -----------
Stockholders' Equity:
Common stock and additional paid-in capital 234,401 151,726 386,127 $151,726 234,401
Retained earnings 689,910 229,335 919,245 229,335 689,910
Less: Treasury stock - (71,107) (71,107) 71,107 -
Less: Unearned employee stock ownership shares - (1,900) (1,900) 1,900 -
Less: Unearned association recognition and retention
shares - (669) (669) 669 -
Net unrealized loss on securities available
for sale, net of tax 14,932 - 14,932 14,932
----------- ---------- ----------- -------- -------- -----------
Total stockholders' equity 939,243 307,385 1,246,628 381,061 73,676 939,243
----------- ---------- ----------- -------- -------- -----------
Total liabilities and stockholders' equity $13,505,427 $1,938,454 $15,443,881 $381,061 $203,914 $15,266,734
=========== ========== =========== ======== ======== ===========
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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 ($17,218) $ 11,725
Mortgage-backed securities 200,477 28,857 229,334 1,568 230,902
Loans receivable 700,671 96,721 797,392 (392) 797,000
-------- -------- ---------- -------- ----------
Total 925,703 129,966 1,055,669 (16,042) 1,039,627
-------- -------- ---------- -------- ----------
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 (22,792) 355,378
Provision for losses 1,304 3,398 4,702 4,702
-------- -------- ---------- -------- ----------
Net interest income after provision for losses 321,180 52,288 373,468 (22,792) 350,676
-------- -------- ---------- -------- ----------
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 6,646 22,426
-------- -------- ---------- -------- ----------
Total 198,012 32,639 230,651 (3,298) 227,353
-------- -------- ---------- -------- ----------
Income before provision for federal income taxes 188,201 20,362 208,563 (16,994) 191,569
Provision for federal income taxes 68,700 7,618 76,318 (4,372) 71,946
-------- -------- ---------- -------- ----------
Net Income $119,501 $ 12,744 $ 132,245 ($12,622) $ 119,623
======== ======== ========== ======== ==========
Earnings Per Share $ 3.70 $ 0.39 $ 4.09 ($0.39) $ 3.70
======== ======== ========== ======== ==========
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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 Pro Forma
Bancorporation, Bell Adjusting Pro Forma
Inc. Bancorp, Inc. Combined Entries Combined
--------------- ------------- --------- ----------- -----------
Interest Income:
Investment securities $ 5,922 $ 2,215 $ 8,137 ($4,305) $ 3,832
Mortgage-backed securities 61,383 6,631 68,014 392 68,406
Loans receivable 175,182 24,080 199,262 (98) 199,164
-------- ------- -------- ------- --------
Total 242,487 32,926 275,413 (4,011) 271,402
-------- ------- -------- ------- --------
Interest Expense:
Deposits 112,095 19,215 131,310 131,310
FHLB advances and other long-term borrowings 29,213 158 29,371 1,688 31,059
Federal funds purchased and reverse repurchase
agreements 13,053 - 13,053 13,053
-------- ------- -------- ------- --------
Total 154,361 19,373 173,734 1,688 175,422
-------- ------- -------- ------- --------
Net interest income 88,126 13,553 101,679 (5,699) 95,980
Provision for losses 605 1,007 1,612 1,612
-------- ------- -------- ------- --------
Net interest income after provision for losses 87,521 12,546 100,067 (5,699) 94,368
-------- ------- -------- ------- --------
Non-Interest Income:
Retail fees and charges 8,469 215 8,684 625 9,309
Loan servicing fee income, net 2,991 - 2,991 2,991
Gain on the sale of earning assets 5,681 35 5,716 5,716
Loss on the sale of real estate owned (113) (192) (305) (305)
Other 1,207 358 1,565 1,565
-------- ------- -------- ------- --------
Total 18,235 416 18,651 625 19,276
-------- ------- -------- ------- --------
Other Expenses:
Compensation and benefits 21,345 4,836 26,181 (1,711) 24,470
Occupancy and equipment 12,190 756 12,946 (280) 12,666
Federal insurance premium 5,607 894 6,501 6,501
Other 10,941 1,163 12,104 (597) 11,507
-------- ------- -------- ------- --------
Total operating and administrative expenses 50,083 7,649 57,732 (2,588) 55,144
Amortization of cost in excess of fair value of net
assets acquired 4,082 - 4,082 1,662 5,744
-------- ------- -------- ------- --------
Total 54,165 7,649 61,814 (926) 60,888
-------- ------- -------- ------- --------
Income before provision for federal income taxes 51,591 5,313 56,904 (4,148) 52,756
Provision for federal income taxes 19,400 2,200 21,600 (1,058) 20,542
-------- ------- -------- ------- --------
Net Income $ 32,191 $ 3,113 $ 35,304 ($3,090) $ 32,214
======== ======= ======== ======== ========
Earnings Per Share $ 1.00 $ 0.10 $ 1.10 ($0.10) $ 1.00
======== ======= ======== ======= ========
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF PENDING ACQUISITION
As noted in Item 2 on page 1 herein, the Company completed its
acquisition of Bell on June 7, 1996. Under the terms of the
Agreement between the parties dated December 14, 1995, the
Company paid approximately $354.5 million to acquire Bell. This
transaction is being funded through a combination of cash and cash
equivalents available to the Company. The acquisition is being
accounted for using the purchase method of accounting, under which all
assets acquired and liabilities assumed are adjusted to fair value as of
the acquisition date. The aggregate core deposit premium and goodwill
resulting from this acquisition is expected to range between $75.0
million and $80.0 million. The unaudited Pro Forma Consolidated
Statement of Condition as of March 31, 1996, indicates an aggregate core
deposit premium and goodwill amount of approximately $82.5 million. The
difference between the aggregate goodwill amount presented on the Pro
Forma Consolidated Statement of Condition herein and the estimated
amount of aggregate goodwill is due to the use of financial information
for Bell as of March 31, 1996, as opposed to the merger date.
The pro forma adjusting entries included in the Consolidated
Statements of Financial Condition and Income include all currently
estimated purchase accounting adjustments based on valuations as of June
7, 1996, 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 capital 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.
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, 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, Standard Federal would then 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."
6
8
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.
The pro forma combined financial statements do not include the
anticipated earnings of Bell from March 31, 1996, through the 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 has not yet
occurred. 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 "contingent
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 $151,726
Debit - Retained Earnings 229,335
Debit - Cost in Excess of Fair Value of Net Assets Acquired ("Goodwill") 47,110
Credit - Treasury Stock $ 71,107
Credit - Unearned ESOP Shares 1,900
Credit - Unearned Restricted Stock 669
Credit - MBS Available for Sale 194,495
Credit - Investment Securities 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 $38
Debit - Mortgage Loans Receivable 2,740
Debit - Premises and Equipment 3,000
Debit - Core Deposit Intangible 15,000
Debit - Goodwill 20,434
Credit - Mortgage-Backed Securities $ 10,974
Credit - Other Liabilities - Severance and Other Employee-Related Costs 12,000
Credit - Other Liabilities - Other Merger-Related Costs 12,940
Credit - Deferred Federal Income Taxes 5,298
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.
7
9
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. At March 31, 1996, the Bank met
all of the capital requirements mandated by the OTS.
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.
8
10
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 (176,088)
Total core deposit intangible (33,714)
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 788,991 5.26% $225,128 1.50% $563,863 3.76%
Qualifying core deposit intangible 18,714
---------
Total core ("Tier 1") capital 807,705 5.37% $450,818 3.00% $356,887 2.37%
General allowance for loan
losses 38,918
---------
Total capital ("risk-based") $846,623 11.44% $591,989 8.00% $254,634 3.44%
=========
1) The regulatory capital requirements are calculated as a percentage of
adjusted assets, as defined by OTS regulation.
9
11
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 6.15%
Less goodwill and core deposit premium (220,357)
--------
Total tangible capital $718,886 4.78%
========
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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: June 14, 1996
11
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Exhibit Index
Exhibit
No. Description
------- -----------
2 Agreement and Plan of Reorganization, dated December 14, 1995
23 Consent of KPMG Peat Marwick LLP, independent certified
public accountants
99 Additional Exhibits. Bell Bancorp, Inc. and Subsidiary
Consolidated Financial Statements as of March 31, 1996
and 1995, and for each of the years in the three year period
ended March 31, 1996 (with Independent Auditors' Report).