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Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: Marty E. Adams
President and Chief Operating Officer
(330) 679-0175
Gregory L. Ridler
Chairman, President and Chief Executive Officer
(330) 742-7099
SKY FINANCIAL GROUP ANNOUNCES AFFILIATION
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OF MAHONING NATIONAL BANCORP, INC.
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JUNE 7, 1999 (BOWLING GREEN, OHIO, NASDAQ: SKYF) Sky Financial Group,
Inc. announced today the execution of a definitive agreement to acquire Mahoning
National Bancorp, Inc., an $809 million bank holding company headquartered in
Youngstown, Ohio. (NASDAQ: MGNB) The acquisition, expected to be completed in
the fourth quarter of 1999, solidifies a strong market position for Sky
Financial in six contiguous counties in eastern Ohio and western Pennsylvania
and adds a significant profitable trust operation to Sky Financial's growing
trust business.
Under the terms of the agreement, Mahoning National shareholders will
receive 1.66 shares of Sky Financial common stock for each share of Mahoning
National common stock in a tax-free exchange. Based upon Sky Financial's closing
price of $29.31 on June 4, 1999, the transaction represents an exchange value of
$48.66 for each common share of Mahoning National and an aggregate transaction
value of $307 million. Mahoning National has issued an option in favor of Sky
Financial to purchase up to 19.9% of its outstanding shares, at an exercise
price of $36.60 per share, which is exercisable under certain conditions.
Mahoning National Bank will be merged into Sky Bank, the new name for
the bank resulting from the merger of The Citizens Banking Company and First
Western Bank, N.A. to be completed in the third quarter of this year. With the
Mahoning National merger, Sky Bank will be a $4.6 billion commercial bank
serving eastern Ohio, western Pennsylvania, and northern West Virginia. Marty E.
Adams, President and COO, of Sky Financial stated, "We are extremely pleased to
have Mahoning National join the Sky Financial Group. Mahoning National is a
high-performing bank with an excellent trust operation and strong position in
the markets it serves and will fit well with our existing franchise."
Commenting on the merger, Gregory L. Ridler, Chairman, President and
CEO, of Mahoning National stated, "Sky Financial is one of the top performing
financial service companies in America as a result of its commitment to
customers, employees and shareholders, and we are truly excited to be joining
them."
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The merger, which will be accounted for as a pooling-of-interest, is
expected to be accretive to earnings per share by approximately 1% in the first
full year of operations. The merger is expected to achieve annual pre-tax cost
savings of $6.5 million, approximately 30% of Mahoning National's expense base,
through the integration of systems and support functions, improved branch
efficiencies and increased alternative delivery channels for financial products
and services. An after-tax merger-related charge of $7.4 million will be
recognized in the quarter in which the merger is completed.
Upon completion of the merger with Mahoning National and Sky
Financial's pending acquisitions of First Western and Wood Bancorp to be
completed in the third quarter of 1999, Sky Financial Group will have $7.7
billion in total assets, $5.8 billion in total deposits and $585 million in
total shareholders' equity, with 230 banking centers throughout Ohio, western
Pennsylvania, West Virginia and Michigan. The combined company will have a
market capitalization of $2.1 billion, ranking Sky Financial the 55th largest
bank holding company in the United States.
David R. Francisco, Chairman and CEO, of Sky Financial commented, "As
the financial services industry continues to consolidate, the addition of
Mahoning National to the Sky Financial Group enhances our franchise and our
ability to build shareholder value. Our pending acquisitions are proceeding at
or ahead of schedule, positioning us well for the addition of the
high-performing Mahoning National into our strong eastern Ohio, western
Pennsylvania bank." .
Sky Financial Group, Inc. is a diversified financial services holding
company headquartered in Bowling Green, Ohio. The Company's banking affiliates
include Mid Am Bank, Toledo, Ohio; The Citizens Banking Company, Salineville,
Ohio; and The Ohio Bank, Findlay, Ohio. The Company's financial service
affiliates include Sky Asset Management Services, Inc., Clearwater, Florida; Sky
Investments, Inc., Bryan, Ohio; Sky Financial Solutions, Inc, Columbus, Ohio;
Mid Am Private Trust, N.A., Pepper Pike, Ohio; Mid Am Financial Services, Inc.
and Simplicity Mortgage Consultants, Carmel, Indiana; Picton Cavanaugh, Inc.,
Toledo, Ohio; Mid Am Title Insurance Agency, Inc., Adrian, Michigan; Sky
Technology Resources, Inc., Bowling Green, Ohio; ValueNet, Inc., Lisbon, Ohio;
Freedom Financial Life Insurance Company, Phoenix, Arizona; and Freedom Express,
Inc., Salineville, Ohio.
*****
The information contained in this press release contains
forward-looking statements regarding expected future financial performance which
are not historical facts and which involve risks and uncertainties. Actual
results and performance could differ materially from those contemplated by these
forward-looking statements.
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[SKY FINANCIAL GROUP, INC. LOGO]
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ACQUISITION OF
MAHONING NATIONAL BANCORP, INC.
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Sky Financial Group, Inc.
June 7, 1999
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FORWARD LOOKING
INFORMATION
This presentation contains certain estimates and projections of future operating
results regarding both Sky Financial Group, Inc. and Mahoning National Bancorp,
Inc. on a stand-alone basis and a pro forma combined basis following the merger,
including estimates of financial condition and operating efficiencies on a
combined basis, and certain merger-related charges expected to be incurred in
connection with the transaction. These estimates constitute forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995) which involve significant risks and uncertainties. Actual results may
differ materially from the results discussed in these forward looking
statements. Factors that might cause such a difference include, but are not
limited to: (1) expected cost savings from the Merger cannot be fully realized
or realized within the expected time frame; (2) revenues following the Merger
are lower than expected; (3) competitive pressures among depository institutions
increase significantly; (4) costs or difficulties related to the integration of
the business of Sky Financial Group, Inc. and Mahoning National Bancorp, Inc.
are greater than expected; (5) changes in the interest rate environment reduce
interest margins; (6) general economic conditions, either national or in the
states in which the combined company will be doing business are less favorable
than expected; and (7) legislation or regulatory changes adversely affect the
businesses in which the combined company would be engaged.
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TRANSACTION
SUMMARY
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FIXED EXCHANGE RATE: 1.66 SKYF shares per MGNB Share
INDICATED TRANSACTION VALUE: $307 million (a)
PER MGNB SHARE: $48.66 (a)
STRUCTURE: Pooling of Interests
Tax Free Exchange
AGREEMENT: Definitive agreement signed
19.9% stock option granted to SKYF
DUE DILIGENCE: Complete
BOARD REPORTING: One MGNB Director will join
SKYF's Board
EXPECTED CLOSING: Fourth Quarter 1999
(a) Based on SKYF closing market price of $29.31 as of June 4, 1999.
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MAHONING NATIONAL BANCORP, INC.
PROFILE
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- $809 million high-performing bank holding company headquartered in
Youngstown, Ohio
- Primary businesses include Community Banking and Trust
- 20 banking offices in Mahoning (#3 market share) and Trumbull counties.
- $497 million in loans; $545 million in deposits
- $97 million in equity; average five-year ROE is 15.35%, EPS growth 12%
- $700 million Trust assets under management
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TRANSACTION
RATIONALE
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GOOD STRATEGIC FIT
- Enables strong market share position in six (6) contiguous counties
- Expands Sky Trust to $2.7 billion in assets under management
FINANCIALLY BENEFICIAL
- Accretive in first year of combined operations
- Based on conservative assumptions for cost savings and utilization of
excess capital
- With SKYF's diversified fee-based business lines, significant
additional opportunity for revenue enhancements (not factored into
projected earnings improvements)
LOW RISK
- In-market transaction
- SKYF and predecessors have completed 23 acquisitions since 1990 o
Pending acquisitions of First Western (FWBI) and Wood Bancorp (FFWD) on
schedule for closing in early third quarter 1999
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TRANSACTION
RATIONALE
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[GRAPHIC]
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TRANSACTION
RATIONALE
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FINANCIAL TERMS MEET SKYF'S ESTABLISHED ACQUISITION CRITERIA AND COMMITMENT
TO FINANCIAL DISCIPLINE:
- Cost savings estimated at $6.5 million or 30% of non-interest expense-
very supportable based on similar in-market transactions
- Cost savings have been identified
- Immediately accretive without revenue enhancements
- Capitalization in excess of 7% combined tangible ratio (approximately
$25 million) provides estimated after-tax earnings of $2.0 million in
2000.
- One-time after tax charge of $7.4 million
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COST
SAVINGS
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ESTIMATED
2000 SAVINGS AS A %
(In Millions) SAVINGS OF EXPENSE CATEGORY
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Salaries & Benefits $ 3.3 28%
Occupancy & Equipment 0.7 24%
Other 2.5 36%
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TOTAL $ 6.5 30%
After tax $ 4.2
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MERGER RELATED
CHARGES
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(In Millions)
Transaction Costs $ 4.3
Conversion Costs .5
Employee-Related Costs 3.2
Occupancy/Equipment Writedowns .5
Other .5
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Gross Charges $ 9.0
Taxes 1.6
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NET MERGER RELATED CHARGES $7.4
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PRO FORMA
ACCRETION ESTIMATE
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1999 (1) 2000 (1)
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SKYF EPS (2) $1.81 $2.08
Proforma EPS -- $2.10
Accretion Before
Revenue Enhancements -- 1.0%
Earnings Improvements
(after-tax, $ in millions)
Cost Savings $ 4.2
Earnings on Excess Capital $ 2.0
(1) Subject to timing of closing and exclude merger-related charges
(2) Current IBES consensus estimates
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TRANSACTION
PRICING
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SKYF/MGNB Recent Bank SKYF
Merger (a) Mergers (b) Stand-alone
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Price to LTM EPS 21.4X 22.7X Not Meaningful
Price to Book Value 316% 289% 378%
Price to Tangible Book Value 316% 311% 393%
Price to Est. 2000
Net Income Synergies 13.4X Not Applicable 14.1X (c)
(a)Based on SKYF closing market price of $29.31 as of June 4, 1999
(b)Recently announced bank sellers with assets between $1 billion and $5 billion
(c)Based on IBES consensus estimate of $2.08 per share for SKYF on a stand alone
basis
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PRO FORMA
SKY FINANCIAL GROUP, INC.
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(In Billions) BALANCE SHEET DATA - MARCH 31, 1999
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SKYF
FWBI
FFWD Pro Forma
SKYF Combined MGNB Combined
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Assets $ 4.7 $ 6.9 $ .8 $ 7.7
Loans 3.3 4.6 .5 5.1
Deposits 3.7 5.2 .5 5.8
Equity to Assets 7.46% 7.63% 12.01% 8.09%
Leverage Ratio 7.63% 7.46% 11.87% 7.93%
Reserve to Loans 1.65% 1.62% 1.61% 1.62%
Reserve to NPLs 455% 500% 506% 501%
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PRO FORMA
SKY FINANCIAL GROUP, INC.
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INCOME DATA - FOR QUARTER ENDED MARCH 31, 1999
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SKYF
FWBI
FFWD Pro Forma
SKYF Combined(a) MGNB Combined(a)
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ROAA 1.73% 1.51% 1.88% 1.55%
ROAE 23.35% 20.22% 15.51% 19.48%
Net Interest Margin 4.40% 4.14% 5.03% 4.23%
Efficiency Ratio 53.94% 54.28% 44.99% 53.27%
(a)excludes any earnings improvements from all pending acquisitions
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PRO FORMA
SKY FINANCIAL GROUP, INC.
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- $7.7 billion assets
- Seventh largest in Ohio
- 66th in the United States
- $2.1 billion market capitalization
- 55th in the United States
- 230 banking offices in OH, MI, PA, and WV
- Three bank charters
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FINAL
SUMMARY
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- Continuation of theme and discipline
- Conservative assumptions
- Immediately accretive on cost savings and utilization of excess capital
- Attractively priced
- Proven integration plan
- High performing bank mission
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