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Exhibit 4
[UST CORP. LETTERHEAD]
NEWS RELEASE
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For: Immediate Release
Contact: Lynda Tocci John G. Fallon
UST Corp. Affiliated Community Bancorp, Inc.
617-726-7221 617-894-6810 ext. 399
UST CORP. TO ACQUIRE AFFILIATED COMMUNITY BANCORP, INC.
BOSTON, MASS...December 15, 1997... UST Corp. (NASDAQ: USTB) and Affiliated
Community Bancorp, Inc. (NASDAQ: AFCB) jointly announced today that the
Corporations have signed a definitive agreement under which UST will acquire
Affiliated.
Upon completion of the acquisition UST will become a $5.4 billion bank
holding company with 83 branches in the greater Boston area, after giving effect
to UST's pending acquisition of five eastern Massachusetts branches from
Somerset Savings Bank. Affiliated conducts business through three subsidiary
banks: Lexington Savings Bank, The Federal Savings Bank and Middlesex Bank &
Trust Co. The three banks have a total of 12 branches located in Middlesex
County. This transaction, including the addition of the Somerset branches, will
increase UST's branch presence in Middlesex County from 32 to 44 offices. While
UST will first acquire Affiliated and the banks will operate as subsidiaries of
UST, it is expected that the banks will be merged with and into USTrust, UST's
principal banking subsidiary.
"This transaction, including the pending Somerset acquisition, will
improve UST's Middlesex County market share and enable USTrust to offer a
stronger banking alternative to an even larger number of local businesses and
consumers," stated Neal F. Finnegan, President and Chief Executive Officer of
UST Corp. "Our expansion in this market and the added volume of consumer
oriented business will further our program of creating a network of regional
community banking organizations enhanced by UST's traditional strength as a
commercial lender. 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."
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"We believe that our shareholders and customers will greatly benefit from the
proposed transaction," stated Timothy J. Hansberry, President and Chief
Executive Officer of Affiliated. "Our customers will have access to a number of
additional banking services including investment management and trust services
along with a wide array of consumer loan and deposit products. In addition, our
offering to business customers will be enhanced by UST's commercial banking
capabilities including cash management, asset based lending, international
services and leasing."
Under the terms of the Agreement, Neal F. Finnegan will serve as Chairman
and Chief Executive Officer and Timothy J. Hansberry will become President and
Chief Operating Officer of USTrust. Mr. Hansberry will also serve as Vice
Chairman and Chief Operating Officer of UST Corp.
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 1.41 shares of UST common stock for each share of
Affiliated common stock. At UST's closing stock price of $28 5/16 on December
12, 1997, the transaction would be valued at approximately $259 million, and
Affiliated shareholders would receive a value of $39.92 in UST common stock for
each share of Affiliated common stock. The purchase price represents a multiple
of 2.3 times stated book value of Affiliated at September 30, 1997. The Company
expects to record a one-time pre-tax charge of approximately $12 million of
acquisition related costs in connection with the transaction.
The agreement is subject to the approval of the shareholders of UST and
Affiliated as well as federal and state bank regulatory authorities. In
connection with the merger agreement, Affiliated has granted UST an option to
purchase approximately 19.9% of its common stock exercisable upon the occurrence
of certain events.
In October, 1997 Affiliated approved a stock repurchase program which
authorized the purchase of up to 300,000 shares of Affiliated's outstanding
common stock. No shares have been purchased and in connection with this
transaction the program is being cancelled.
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 companies in New England.
Included in these services are commercial banking, consumer financial services,
trust and money management, and equipment leasing.
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Affiliated Community Bancorp, Inc. is a $1.1 billion bank holding company
for three community banks that serve consumer and small business banking needs
through 12 branch offices located in eastern Middlesex County.
Supplemental data is attached.
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UST CORP. ACQUISITION OF AFFILIATED COMMUNITY BANCORP, INC.
SUPPLEMENTAL DATA
TRANSACTION DATA:
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Consideration: 1.41 shares of UST Corp. for each share of
Affiliated; $39.92 per AFCB share @ 12/12/97
USTB close of $28 5/16
Shares to be issued: 9.153 million shares of UST for 6.492
outstanding shares of Affiliated
Lock-Up: Option granted to UST to purchase up to
19.9% of Affiliated common stock
Walkaway: 15% absolute USTB decline and a 15% relative
decline to a bank index, subject to USTB's
right to adjust the exchange ratio
Accounting: Pooling of Interests
Due Diligence: Complete
Shareholder Approval Required: UST Corp. and Affiliated
Regulatory Approvals Required: FRB and Massachusetts Board of Bank
Incorporation
FINANCIAL SUMMARY:
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(In million, except per share data)
USTB(1) SOSA(2) AFCB PRO FORMA
Total assets $3,776 $ 520 $1,129 $5,425
Total earning assets 3,564 493 1,087 5144
Total deposits 2,864 458 703 4025
Equity capital 329 34 110 473
Shares outstanding:
Period End (9/30/97) 29.8 16.7 6.5 42.4
Book value per share $11.02 $2.06 17.21 $11.16
Equity to asset ratio 8.71% 6.54% 9.74% 8.72%
(1) Includes October, 1997 acquisition of Firestone Financial Corp. as a
pooling of interests.
(2) Somerset Savings Bank announced 12/10/97.