Webster Contacts Eagle Contacts
Media: Christopher Capot, 203-578-2461 Media: Robert J. Britton, 860-314-6411
Investors: John V. Brennan, 203-578-2335 Investors: Mark J. Blum, 860-314-6410
WEBSTER FINANCIAL CORP. TO JOIN FORCES
WITH EAGLE FINANCIAL CORP. IN MERGER
WATERBURY, Conn., Oct. 27, 1997 -- Webster Financial Corporation (Nasdaq: WBST)
today announced a definitive agreement to acquire Eagle Financial Corp. (Nasdaq:
EGFC) on a stock-for-stock basis in a tax-free exchange fixed at 0.84 shares of
Webster common stock for each share of Eagle common stock. Eagle, the fourth
largest Connecticut-based bank with total assets of $2.1 billion, operates 30
branches in Hartford and Litchfield counties. With the addition of Eagle,
Webster will have $8.9 billion in assets and more than 110 branches.
The definitive agreement, which has been approved by both companies' boards of
directors, is subject to the approval of Webster's and Eagle's shareholders and
the appropriate regulatory agencies. Webster expects the transaction to close in
the first quarter of 1998.
"We are extremely pleased to be joining forces with one of Connecticut's leading
banks," said James C. Smith, Webster's chairman and chief executive officer.
"This is a natural alliance between two like-minded, customer-and
community-oriented banks. Both banks' employees are dedicated to providing
excellent customer service, and both companies have strong commitments to the
communities they serve. This merger will allow our combined organization to
offer more convenient and accessible banking services to our customers."
Under terms of the agreement, Eagle shareholders will receive a fixed exchange
of 0.84 shares of Webster common stock for each share of Eagle common stock. To
illustrate the value of this transaction at a given point in time, using
Webster's closing stock price on Friday, Oct. 24, of $66.00 per share, the
transaction would have a value of $55.44 per share to Eagle shareholders and an
approximate transaction value of $362 million.
The acquisition, which is expected to have a positive impact on Webster's
earnings per share beginning in the first year, will be accounted for as a
pooling of interests. The purchase price is approximately 2.50 times Eagle's
book value and 18.97 times Eagles' estimated 1998 earnings and 16.43 times
Eagle's estimated 1998 cash earnings per share. Webster currently anticipates
recognizing acquisition related charges of approximately $18.9 million before
taxes.
Robert J. Britton, Eagle's president and chief executive officer, said, "Webster
and Eagle fit well together because of our common understanding of our customers
and our markets. Eagle has sought to be a good corporate citizen in the
communities where our customers live. We are pleased that Webster has
demonstrated the same commitment. The merger increases our capacity to provide
financial services, including expanded business banking, as well as new services
such as trust and investment management and PC banking, to our growing numbers
of customers."
The merger will increase Webster's assets to $8.9 billion and its deposits to
$5.6 billion, representing 10.8 percent of total deposits in Connecticut.
"Webster will strengthen its position as number two in deposit market share in
Hartford and New Haven counties, and will immediately gain the top deposit
market share in Litchfield County," said John V. Brennan, Webster's executive
vice president and chief financial officer. Webster will have more than 110
branches and more than 130 ATMs.
"Webster guarantees positions in our combined branch network to all Eagle
non-management branch employees. When two similar companies combine to form a
stronger bank, there will inevitably be duplication of duties, resulting in some
job eliminations," Brennan said. "While we have not yet finalized the number of
overlapping positions, we will do all we can to keep the number of position
eliminations to a minimum, as in past mergers. Employees whose positions are
eliminated at Eagle will be given preference for open positions at Webster. Our
history demonstrates a pattern of successfully placing most employees affected
by our mergers."
Regarding potential branch consolidation, Brennan said that some branches,
because of geographic proximity, will be consolidated. "We have not determined
the number and locations. Usually where branches are on opposite corners of the
street or within a mile of each other, we can consolidate the offices without
disruption to customers," Brennan said. It is important to note that both Eagle
and Webster customers will have more branches and more ATMs following this
merger."
* * *
Webster Financial Corporation, headquartered in Waterbury, Conn., is the holding
company for Webster Bank, which was founded in 1935 and is a leading financial
institution in Connecticut. Webster Bank, its primary subsidiary, delivers
consumer, commercial, mortgage, and trust and investment management services to
individuals, families and businesses in Connecticut. Webster operates through a
network of 84 banking offices, three commercial banking centers, six trust
offices and more than 100 ATMs, in addition to telephone banking, video banking
and PC banking.
Webster Bank, with $6.8 billion in assets, is the second-largest bank based in
Connecticut and has the second largest deposit market share in Hartford and New
Haven counties. Webster is also the second-largest mortgage lender in
Connecticut and a leading commercial lender with an extensive line of business
services, including international and cash management. Webster Trust, the bank's
new trust and investment management subsidiary, is the second-largest bank trust
company based in Connecticut.
Eagle Bank offers a full array of innovative products and services for the
retail and commercial market, including 24-hour telephone banking, loans by
phone, cash management services, debit cards, alternative investment products
and a full line of deposit and loan products. Eagle operates 26 traditional
branch offices and four supermarket branch offices in Hartford and Licthfield
counties.
WEBSTER BANK/EAGLE BANK - FACTS
STRATEGIC BENEFITS
In-market acquisition with positive impact on earnings per share beginning in
year one
Strengthens franchise in Hartford and Litchfield countties
Increases branches to more than 110, ATMs to 130, creating greater convenience
for combined customer base.
Provides cross-sell opportunities for Webster's commercial, trust, and
investment management services
TRANSACTION SUMMARY
TERMS
Fixed Exchange Ratio: 0.84 shares of Webster for each share of Eagle
Payment: Tax-free exchange of stock
Implied Price Per Share: $55.44 (based on Webster's closing price of $66 on
10/24)
Estimated Transaction Value: Approx. $362 million
Price to Eagle Book Value: 2.50 times
Price to Eagle 1998 Estimated Fully Diluted Earnings: 18.97 times
Price to Eagle 1998 Estimated Cash Earnings: 16.43 times
Eagle can terminate the agreement should Webster's stock price decline by more
than 20 percent and more than 15 percent relative to a peer index
FINANCIAL SUMMARY
Webster Bank Eagle Bank Combined
------------ ---------- --------
Total Assets: $6.8 billion $2.1 billion $8.9 billion
Loans, Net: $3.7 billion $1.1 billion $4.9 billion
Deposits: $4.3 billion $1.4 billion $5.6 billion
EAGLE BRANCH LISTING
- --------------------
Avon Big Y Supermarket, West Main St.
Berlin (Kensington) One Webster Square
346 Main St.
51 Chamberland Highway
Bloomfield Stop & Shop, 20-22 Mountain Road
782 Park Ave.
Bristol 222 Main St.
Bristol Commons, 99 Farmington Ave.
Bristol Farms, 1235 Farmington Ave.
Pine Plaza, 785 Pine St.
Canton Canton Village, Route 44
East Hartford Big Y Supermarket, 295 Ellington Road
Glastonbury Stop & Shop, Naubuc Ave.
Hartford 108 Farmington Ave.
324 Franklin Ave.
50 State House Square
Litchfield West Street
Manchester 1147 Tolland Turnpike
New Britain One Liberty Square
747 Farmington Ave.
Newington 1120 Main St.
Plainville 63 East Main St.
Rocky Hill 53 New Britain Ave.
Simsbury Farmington Valley Mall
Terryville 115 Main St.
Torrington 50 Litchfield St.
1180 East Main St.
West Hartford 75 Park Road
Bishops Corner, 774 North Main St.
Winsted Shops at Ledgebrook Plaza, Route 44
TOTAL: 30