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FOR IMMEDIATE RELEASE - JULY 21, 1997
NEWS RELEASE
Otto L. Keeton Michael W. Kelley
President & CEO President & CEO
Enterprise Federal Bancorp, Inc. North Cincinnati Savings Bank
7810 Tylersville Square Drive 9477 Kenwood Road
West Chester, OH 45069 Blue Ash, OH 45242
(513)755-4600 (513)791-4800
ENTERPRISE FEDERAL BANCORP, INC. AND
NORTH CINCINNATI SAVINGS BANK SIGN DEFINITIVE MERGER AGREEMENT
West Chester, Ohio - Enterprise Federal Bancorp, Inc. (Nasdaq "EFBI")
and North Cincinnati Savings Bank (Nasdaq Bulletin Board "NSGB") jointly
announced today the signing of a definitive agreement for the acquisition of
NSGB by EFBI. EFBI, the holding company for Enterprise Federal Savings Bank,
is headquartered in West Chester and operates four branch offices in Hamilton,
Butler and Warren Counties, Oho. NSGB, a state chartered savings bank, has
offices in the suburban Cincinnati communities of Blue Ash and North College
Hill.
Under the terms of the agreement, EFBI will exchange $18.50 in cash or
common stock for each of the 396,750 outstanding shares of NSGB stock. NSGB
shareholders will have the right to elect to receive either cash, EFBI common
stock, or a combination of both, however, total consideration will consist of
no more than 75% stock or no more than 40% cash. In the event of an
oversubscription for either cash or EFBI stock a pro rata distribution will be
made to shareholders. The transaction is valued at approximately $7.3 million.
In the event that the average of the daily average between the high bid
and low asked price for EFBI common stock over the twenty trading days ending
the trading day prior to closing is less than $15.00, NSGB shareholders will
receive 1.2333 shares of EFBI common stock or $18.50 in cash for each share of
NSGB stock. In the event that the average of the daily average between the
high bid and low asked prices for EFBI
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common stock over the twenty trading days ending the trading day prior to
closing is greater than $22.00, NSGB shareholders will receive 0.8409 shares of
EFBI common stock or $18.50 in cash for each share of NSGB stock.
The merger, which will be accounted for under the purchase method, is
expected to be consummated by December 31, 1997, pending NSGB shareholder
approval, regulatory approval and other customary conditions of closing. The
transaction is expected to be a tax-free reorganization for federal income tax
purposes.
At March 31, 1997, NSGB had total assets of $60.6 million, deposits of
$50.8 million and shareholders' equity of $5.6 million. NSGB reported net
income of $51,548 or $0.13 per share for the quarter ended March 31, 1997 with
an annualized return on assets of 0.34% and an annualized return on equity of
3.64%.
At March 31, 1997, EFBI had total assets of $257 million, deposits of
$143 million and shareholders' equity of $31.6 million. For the quarter ended
March 31, 1997, EFBI reported net income of $597,000 or $.31 per share, with an
annualized return on assets of .97% and an annualized return on equity of
7.38%.
Otto L. Keeton, President and Chief Executive Officer of EFBI, stated,
"We are very pleased to announce this merger with North Cincinnati Savings
Bank. We are excited about this opportunity to expand our branch office
network to the communities of Blue Ash and North College Hill. We look forward
to welcoming the North Cincinnati customers and employees. This acquisition
also continues our efforts to leverage Enterprise Federal Bancorp's capital,
improve its return on equity and increase shareholder value."
Michael W. Kelley, President of North Cincinnati Savings Bank, stated,
"We believe that this transaction will benefit our shareholders, customers and
employees. Having EFBI stock will enhance the liquidity for our shareholders.
Also, our customers can expect us to offer additional banking products and
services, and our employees can grow and prosper as part of a larger company.
As part of Enterprise Federal Savings Bank, we will be in a stronger competitive
position in the years ahead."
McDonald & Company Securities, Inc. is serving as North Cincinnati
Savings Bank's financial advisor in connection with the transaction.
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ENTERPRISE FEDERAL BANCORP'S ACQUISITION OF NORTH CINCINNATI SAVINGS BANK
SUMMARY FACT SHEET
ANNOUNCEMENT DATE: July 21, 1997
DEAL STRUCTURE: Purchase method of accounting
Tax-free exchange
Due diligence completed
Definitive agreement signed
$250,000 break-up fee
TERMS: $18.50 in cash, EFBI common stock, or a
combination of both for each share of NSGB.
TIMING: Subject to normal regulatory approval and
approval by the North Cincinnati Savings Bank
shareholders.
Closing expected by year end.
PRICING: Purchase price per share $18.50
Estimated transaction value $7.3 million
TRANSACTION RATIONALE:
- Logical contiguous expansion into attractive communities
- Expands Enterprise Federal's branch office network into the
northeast Hamilton County communities of Blue Ash and North College
Hill.
- Enterprise Federal Bancorp will have the opportunity to enhance
North Cincinnati Savings Bank's net interest margin through a
reduction in NSGB's liquidity levels and the sale of lower yielding
investment securities.
- Transaction will help lever EFBI's capital position and increase its
return on equity.