1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 1999
FIRST FINANCIAL BANCORP.
(Exact name of registrant as specified in its charter)
Ohio 0-12379 31-1042001
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
300 High Street, Hamilton, Ohio 45011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513) 867-4700
Page 1 of 9
2
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On June 1, 1999, Sand Ridge Financial Corporation, an Indiana corporation and a
registered bank holding company ("Sand Ridge"), was merged (the "Merger") into
First Financial Bancorp., an Ohio corporation and a registered bank holding
company ("First Financial"), pursuant to the terms of a Plan and Agreement of
Merger. As a result of the Merger, each outstanding share of Sand Ridge's no par
common stock, which has a stated value of $10.00 per share, was converted into
85.25 shares of First Financial's no par common stock. Cash was paid for
fractional shares. Approximately 5,115,000 shares of First Financial's common
stock were issued in the Merger. The Merger was accounted for as a pooling of
interests under generally accepted accounting principles. A copy of the News
Release, dated May 25, 1999, issued by First Financial relating to the
consummation of the Merger is attached as Exhibit 99(a) and is incorporated
herein by reference.
First Financial's Registration Statement on Form S-4 (Registration No.
333-73283), which was declared effective by the Securities and Exchange
Commission on April 9, 1999, sets forth certain information concerning First
Financial, Sand Ridge, and the Merger, including without limitation, a
description of the assets involved, the nature and amount of consideration paid
by First Financial, the method used for determining the amount of such
consideration, the nature of any material relationships between Sand Ridge and
First Financial or any officer or director of First Financial or any associate
of any such officer or director, the nature of Sand Ridge's business and First
Financial's intended use of the assets acquired in the Merger. Such information
is incorporated herein by reference as additional information in response to
Item 2 of this Current Report on Form 8-K.
ITEM 5: OTHER INFORMATION
The information contained or incorporated by reference in this Current Report on
Form 8-K may contain forward-looking statements that are provided to assist in
the understanding of anticipated future financial performance. However, such
performance involves risks and uncertainties which may cause results to differ
materially.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) The historical financial statements for December 31, 1998, including
the Report of Independent Auditors and the Notes to Consolidated
Financial Statements, of Sand Ridge required by Item 7(a) of Form 8-K,
which were included on pages F-15 through F-40 of the Proxy
Statement/Prospectus, dated March 3, 1999, previously filed with the
Securities and Exchange Commission pursuant to 424(b)(3), are
incorporated herein by reference. The historical financial statements
for March 31, 1999 are included as exhibits as follows:
Consolidated Balance Sheet as of March 31, 1999
Consolidated Statements of Income for the periods ended March 31, 1998
and 1999
Consolidated Statements of Cash Flows for the periods ended March 31,
1998 and 1999
Notes to Consolidated Financial Statements
(b) The pro forma financial statements, are included as Exhibit 99(b)
(c) Exhibits:
2(a) Plan and Agreement of Merger, dated December 16, 1998, between
First Financial Bancorp. and Sand Ridge Financial
Corporation--previously filed as Appendix A to the Proxy
Statement/Prospectus, dated March 3, 1999, filed with the
Securities and Exchange Commission pursuant to 424(b)(3), and
incorporated herein by reference.
Page 2 of 9
3
99(a) Press release dated May 25, 1999, relating to the merger of
Sand Ridge Financial Corporation with and into First Financial
Bancorp.
99(b) Pro forma financial statements:
Pro Forma Consolidated Balance Sheet as of March 31, 1999
Pro Forma Consolidated Statement of Income for the three
months ended March 31, 1999
Pro Forma Consolidated Statement of Income for the three
months ended March 31, 1998
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1998
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1997
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1996
Notes to Pro Forma Consolidated Financial Statements
99(c) Form S-4 (Registration No. 333-73283), which was declared
effective by the Securities and Exchange Commission on April
9, 1999 filed with the Securities and Exchange Commission
pursuant to 424(b)(3), and incorporated herein by reference.
Page 3 of 9
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST FINANCIAL BANCORP.
(Registrant)
DATE June 16, 1999 /s/ Michael R. O'Dell
------------- --------------------------
Michael R. O'Dell
Senior Vice President, Chief
Financial Officer and Secretary
Page 4 of 9
5
SAND RIDGE FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(DOLLARS IN THOUSANDS)
As of
March 31, 1999
--------------
ASSETS
Cash and due from banks $ 11,919
Interest-bearing deposits with other banks 100
Federal funds sold and securities purchased
under agreements to resell 0
Investments available-for-sale, at market value 199,280
Loans:
Commercial 36,888
Real estate-mortgage 246,220
Installment 39,898
Credit card 2,571
--------
Total loans 325,577
Less:
Allowance for loan losses 4,778
--------
Net loans 320,799
Premises and equipment 5,900
Deferred taxes 2,503
Accrued interest and other assets 5,121
--------
TOTAL ASSETS $545,622
========
LIABILITIES
Deposits:
Noninterest-bearing $ 53,895
Interest-bearing 388,648
--------
Total deposits 442,543
Short-term borrowings
Federal funds purchased and securities sold
under agreements to repurchase 19,972
Federal Home Loan Bank borrowings 20,314
Other 706
--------
Total short-term borrowings 40,992
Long-term borrowings 13,712
Accrued interest and other liabilities 3,545
--------
TOTAL LIABILITIES 500,792
SHAREHOLDERS' EQUITY
Common stock - no par value
Authorized - 60,000,000 shares
Issued - 36,320,338 shares in 1999 600
Surplus 4,600
Retained earnings 37,761
Accumulated comprehensive income 1,869
--------
TOTAL SHAREHOLDERS' EQUITY 44,830
--------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $545,622
========
Page 5 of 9
6
SAND RIDGE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(DOLLARS IN THOUSANDS)
Three months ended
March 31,
--------------------
1999 1998
---- ----
Interest income
Loans, including fees $6,324 $5,861
Investment securities
Taxable 1,427 1,426
Tax-exempt 1,424 912
------ ------
Total investment interest 2,851 2,338
Interest-bearing deposits with other banks 2 2
Federal funds sold and securities
purchased under agreements to resell 2 42
- --
Total interest income 9,179 8,243
Interest expense
Deposits 3,745 3,734
Short-term borrowings 238 184
Long-term borrowings 533 77
--- --
Total interest expense 4,516 3,995
------ ------
Net interest income 4,663 4,248
Provision for loan losses 525 350
------ ------
Net interest income after
provision for loan losses 4,138 3,898
Noninterest income
Service charges on deposit accounts 586 502
Trust income 41 46
Investment securities gains 0 49
Other 553 469
------ ------
Total noninterest income 1,180 1,066
Noninterest expenses
Salaries and employee benefits 1,665 1,545
Net occupancy expenses 228 189
Furniture and equipment expenses 256 264
Data processing expenses 158 161
Deposit insurance expenses 20 18
State taxes 0 0
Amortization of intangibles 0 0
Other 927 865
------ ------
Total noninterest expenses 3,254 3,042
------ ------
Income before income taxes 2,064 1,922
Income tax expense 429 512
------ ------
Net earnings $1,635 $1,410
====== ======
Net earnings per share - basic $27.25 $23.50
====== ======
Net earnings per share - diluted $27.25 $23.50
====== ======
Cash dividends declared per share $ 4.75 $ 0.00
====== ======
Average shares outstanding 60,000 60,000
====== ======
Page 6 of 9
7
SAND RIDGE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
Three months ended
March 31,
---------------------------
1999 1998
-------- --------
Operating activities
Net earnings $ 1,635 $ 1,410
Adjustments to reconcile net cash provided by
operating activities
Provision for loan losses 525 350
Provision for depreciation and amortization 226 234
Net amortization of investment security
premiums and accretion of discounts 162 42
Realized investment securities gains 0 (49)
Deferred income taxes (152) 82
Net change in:
Other assets (119) (1,001)
Other liabilities (1,862) (1,203)
-------- --------
Net cash provided by (used in) operating activities 415 (135)
Investing activities
Proceeds from sales of securities available-for-sale 0 9,579
Proceeds from calls, paydowns and maturities of securities
available-for-sale 15,864 6,278
Purchases of securities available-for-sale (11,427) (26,849)
Net decrease (increase) in interest-bearing
deposits with other banks 0 0
Net increase in federal funds sold and
securities purchased under agreements to resell 0 (13,400)
Net increase in loans and leases (8,036) (988)
Recoveries from loans and leases previously charged off 326 76
Proceeds from disposal of other real estate owned 0 0
Purchases of premises and equipment (175) (136)
-------- --------
Net cash used in investing activities (3,448) (25,440)
Financing activities
Net decrease in total deposits (6,559) 31,984
Net increase in short-term borrowings (3,427) (14,087)
Net increase in long-term borrowings 0 (1)
Cash dividends declared (285) 0
-------- --------
Net cash (used in) provided by financing activities (10,271) 17,896
-------- --------
Increase (Decrease) in cash and cash equivalents (13,304) (7,679)
Cash and cash equivalents at beginning of year 25,223 23,010
-------- --------
Cash and cash equivalents at end of year $ 11,919 $ 15,331
======== ========
Supplemental disclosures
Interest paid $ 4,969 $ 3,952
======== ========
Income taxes paid $ 258 $ 1,491
======== ========
Recognition of deferred tax assets
attributable to SFAS No. 115 $ 152 $ 220
======== ========
Page 7 of 9
8
SAND RIDGE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The consolidated financial statements for interim periods are unaudited;
however, in the opinion of the management of Sand Ridge Financial Corporation
("Sand Ridge"), all adjustments (consisting of only normal recurring
adjustments) necessary for a fair presentation have been included.
NOTE 1: BASIS OF PRESENTATION
The consolidated financial statements of Sand Ridge, a bank holding company,
include the accounts of Sand Ridge and its wholly-owned subsidiary - Sand Ridge
Bank. All significant intercompany transactions and accounts have been
eliminated in consolidation.
The accompanying financial statements have been prepared in accordance with the
instructions for Form 10-Q and, therefore, do not include all information and
footnotes necessary to be in conformity with generally accepted accounting
principles.
NOTE 2: FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, Sand Ridge offers a variety of financial
instruments with off-balance sheet risk to its customers to aid them in meeting
their requirements for liquidity and credit enhancement and to reduce its own
exposure to fluctuations in interest rates. These financial instruments include
standby letters of credit and commitments outstanding to extend credit.
Generally accepted accounting principles do not require these financial
instruments to be recorded in the consolidated financial statements, and
accordingly, they are not. Sand Ridge does not use off-balance sheet derivative
financial instruments (such as interest rate swaps) as defined in the Financial
Accounting Standards Board's (FASB) Statement No. 119 "Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments". Sand
Ridge's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for standby letters of credit and commitments
outstanding to extend credit is represented by the contractual amounts of those
instruments. Sand Ridge uses the same credit policies in making commitments and
conditional obligations as it does for on-balance sheet instruments. Following
is a discussion of these transactions.
Standby letters of credit are conditional commitments issued by Sand Ridge to
guarantee the performance of a customer to a third party. Sand Ridge's portfolio
of standby letters of credit consists primarily of performance assurances made
on behalf of customers who have a contractual commitment to produce or deliver
goods or services. The risk to Sand Ridge arises from its obligation to make
payment in the event of the customers' contractual default. As of March 31,
1999, Sand Ridge had
Page 8 of 9
9
issued standby letters of credit aggregating $955,000 compared to $780,000
issued as of December 31, 1998. Management conducts regular reviews of these
instruments on an individual customer basis, and the results are considered in
assessing the adequacy of Bancorp's allowance for loan losses. Management does
not anticipate any material losses as a result of these letters of credit.
Loan commitments are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. Commitments generally
have fixed expiration dates or other termination clauses and may require payment
of a fee. Since many of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily represent future
cash requirements. Sand Ridge evaluates each customer's creditworthiness on an
individual basis. The amount of collateral obtained, if deemed necessary by Sand
Ridge upon extension of credit, is based on management's credit evaluation of
the counterparty. The collateral held varies, but may include securities, real
estate, inventory, plant, or equipment. Sand Ridge had commitments outstanding
to extend credit totaling $40,572,000 at March 31, 1999 and $38,875,000 at
December 31, 1998. Management does not anticipate any material losses as a
result of these commitments.
Page 9 of 9