1
Exhibit 2
[UST CORP. LETTERHEAD]
NEW RELEASE
- ------------------------------------
For: Immediate Release
Contact: Lynda Tocci
617-726-7221
UST CORP. TO ACQUIRE SOMERSET SAVINGS BANK
BOSTON, MASS...December 10, 1997...UST Corp. (NASDAQ: USTB) and Somerset
Savings Bank (NASDAQ: SOSA) jointly announced today that their organizations
have signed a definitive agreement under which UST will acquire Somerset.
The addition of Somerset's $520 million asset base will result in UST
becoming a $4.2 billion bank holding company with 71 branches in the greater
Boston area. Somerset has a total of five branches in Middlesex County including
four Somerville locations and a Burlington Office. This transaction will
increase UST's branch presence in Middlesex County from 27 to 32 offices. Under
the agreement, Somerset will be merged with and into USTrust, UST's principal
banking subsidiary.
"This acquisition continues UST's expansion into Middlesex County. The
increased coverage will enhance our market share, strengthen our geographic
presence in eastern Massachusetts, and enable USTrust to offer a stronger
banking alternative to an even larger number of consumers and businesses,"
stated Neal F. Finnegan, President and Chief Executive Officer of UST. "The
combination of the two organizations will further enhance the current position
of UST's branch network as the third largest in metropolitan Boston. In
addition, it will allow us to improve our leverage and efficiency as we will be
able to expand our customer base without incurring proportionate increases in
operating expenses."
2
"The members of the Board of Directors of Somerset unanimously believe
that this transaction is in the best interest of our shareholders and will
greatly benefit our customers," stated Thomas J. Kelly, Chairman of the Board,
President and Chief Executive Officer of Somerset. "In addition to a
significantly expanded branch network, our customers will benefit from UST's
highly competitive products and services."
The transaction, which will be accounted for as a pooling of interests,
is expected to close during the first half of 1998, and is structured as a
tax-free exchange of 0.19 shares of UST common stock for each share of Somerset
common stock. At UST's closing stock price of $29 5/8 on December 9, 1997, the
transaction would be valued at approximately $93.7 million, and Somerset
shareholders would receive a value of $5.63 in UST common stock for each share
of Somerset common stock. The Company expects to record a one-time pre-tax
charge of approximately $7.5 million of acquisition related costs in connection
with the transaction.
The agreement is subject to the approval of Somerset shareholders as well
as federal and state bank regulatory authorities. In connection with the merger
agreement, Somerset has granted UST an option to purchase approximately 16.7%
of its common stock exercisable upon the occurrence of certain events and has
also granted UST certain additional consideration related to the option.
UST Corp. is a $3.7 billion Boston based bank holding company which serves
as the parent company to USTrust and United States Trust Company. Through its
subsidiaries, the Company operates a total of 66 banking offices throughout
eastern Massachusetts and provides a broad range of financial services,
principally to individuals and small-and medium-sized companied in New England.
Included in these services are commercial banking, consumer financial services,
trust and money management, and equipment leasing.
Somerset Savings Bank is a $520 million bank which serves consumer and
small business banking needs through its 5 branch offices located in the
Massachusetts communities of Somerville and Burlington.
Supplemental data is attached.
3
UST CORP. ACQUISITION OF SOMEREST SAVINGS BANK
SUPPLEMENTAL DATA
TRANSACTION DATA:
Consideration: 0.19 shares of UST Corp. for each share of
Somerest; $5.63 per SOSA share @ 12/9/97 USTB
close of $29 5/8
Shares to be Issued: 3.164 million shares of UST for 16,652,601
outstanding shares of Somerest
Lock-UP: Option granted to UST to purchase up to
16.7% of Somerest common stock plus other
consideration
Collar/Walkaway: None: Fixed Exchange Ratio
Accounting Pooling of Interests
Due Diligence: Complete
Shareholder Approval Required: Somerest
Regulatory Approvals Required: FDIC and Massachusetts Commissioner of Banks
FINANCIAL SUMMARY:
(In millions, except per share data)
Total assets $3,776 $ 520 $4,296
Total earning assets 3,564 493 4,057
Total deposits 2,864 458 3,322
Equity capital 329 34 363
Shares outstanding:
Period End (9/30/97) 29.8 16.7 32.9
Weighted average 30.2 16.9 33.4
Book value per share $11.02 $2.06 $11.00
Equity to asset ratio 8.71% 6.60% 8.45%
*Includes October, 1997 acquisition of Firestone Financial Corp. as a pooling
of interests.
###