EXHIBIT 99.1
FOR IMMEDIATE RELEASE
WEBSTER CONTACTS:
Media: MIKE BAZINET, 203-578-2391 Investors: JAMES SITRO, 203-578-2399
mbazinet@websterbank.com jsitro@websterbank.com
JIM KALACH, 203-578-2461 MECHANICS SAVINGS BANK:
jkalach@websterbank.com EDGAR C. GERWIG, 860-241-2838
WEBSTER BANK TO ACQUIRE MECHANICS SAVINGS BANK
WATERBURY, Conn., December 2, 1999 -- Webster Financial Corporation (Nasdaq:
WBST) today announced that it has reached a definitive agreement to acquire MECH
Financial, Inc. (Nasdaq: MECH), the holding company for Mechanics Savings Bank,
in a tax-free, stock-for-stock exchange valued at approximately $210 million.
Mechanics Savings Bank is a state-chartered, Hartford-based savings bank with
$1.1 billion in assets and 16 branch offices in the capital region.
Based on the terms of the agreement, Mechanics shareholders will receive 1.52
shares of Webster common stock for each share of Mechanics they hold. For
illustrative purposes, based on Webster's average closing price for the last six
months of $26.97, this would be equal to $41.00 a share. Based on Webster's
closing price on Dec. 1, 1999 of $26.00, this would be equal to $39.52 a share.
Webster expects to record after-tax acquisition related charges of $10.9 million
for the transaction.
"Our partnership with Mechanics Savings Bank significantly enhances Webster's
franchise in Hartford County, where we already rank number two in deposit market
share," said James C. Smith, Webster chairman and chief executive officer.
"Mechanics customers will benefit from having greater convenience through our
extensive network of branches and ATMs and will enjoy a broader selection of
services. In the meantime, Mechanics customers should continue to bank as they
normally do. We will make the transition to Webster simple and convenient for
our new customers. "
Mechanics branch offices are located in Avon, Bloomfield, East Hartford,
Glastonbury, Hartford, Manchester, New Britain, Wethersfield, West Hartford and
Windsor. Please see accompanying list for addresses.
With the addition of Mechanics, the pending merger of New England Community
Bancorp, and the previously announced agreements to purchase FleetBoston and
Chase Manhattan branches, Webster will have more than $11 billion in assets,
ranking it as the fifth largest New England based bank.
The purchase price is approximately 2.2 times Mechanics' book value and 16.9
times core earnings for the last 12 months. The acquisition is expected to
contribute positively to Webster's earnings per share in the first year. Webster
expects to account for the transaction as a pooling of interests.
"Given both banks' strong commitment to our customers and to Connecticut,
Webster is an ideal merger partner," said Edgar C. Gerwig, Mechanic's chairman,
president and chief executive officer. "Banking and financial services are
changing rapidly. Our Board believes that merging with Webster best serves the
interests of our communities, shareholders, customers and employees. We will
enhance our ability to provide financial services, including expanded business
banking offerings as well as trust, insurance services, and Web-based banking."
The definitive agreement, which has been approved by both companies' boards of
directors, is subject to approval by regulatory authorities and Mechanics
shareholders. Webster expects the transaction to close in the second quarter of
2000.
"When two banking companies in the same market merge to form a stronger bank,
there will inevitably be duplication of duties, resulting in some job
eliminations," said William T. Bromage, Webster senior executive vice president.
"While we have not yet determined the number of overlapping positions, we expect
to offer positions to most of the branch office employees and will do all we can
to keep the number of position eliminations to a minimum. Mechanics employees
whose positions are eliminated will be given preference for open positions in
the rapidly growing Webster organization. Our history demonstrates a pattern of
successfully placing most employees affected by our mergers."
No decisions have been made with regard to potential branch office
consolidations resulting from geographic proximity with existing Webster Bank
branches. Mechanics customers will have vastly more branches and ATMs to serve
them following this merger.
* * *
Pro forma for pending merger and branch purchase activity, Webster Bank has $11
billion in assets and operates through a network of more than 125 banking
offices, three commercial banking centers, and 200 ATMs, in addition to
telephone, video, Web and PC banking.
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Webster is also a leading, full-service commercial and mortgage lender in
Connecticut. Webster Trust, the bank's trust and investment management
subsidiary, is one of the leading bank trust companies based in Connecticut.
Webster's insurance subsidiary, Damman Insurance Associates, is one of the
largest agencies in the state.
Webster's Nowlending subsidiary found at www.nowlending.com on the Worldwide
Web, originates low-cost mortgages over the Internet for customers across the
United States.
For more information on Webster visit www.websterbank.com.
Conference Call
A conference call covering this transaction will be held today, Thursday, Dec. 2
at 10 a.m., Eastern Time and may be heard through Webster's investor relations
website at www.wbst.com. The call will be archived on the website and available
for future retrieval.
Statements in this press release regarding Webster Financial Corporation's
business that are not historical facts are "forward looking statements" that
involve risks and uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those contained
in the forward-looking statement, see "Forward Looking Statements" in the
Company's Annual Report for the most recently ended fiscal year.
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