Exhibit 99.2
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Fidelity Financial of Ohio, Inc.
&
Glenway Financial Corporation
Merger of Equals
September 28, 1998
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This current report on Form 8-K, including the investor materials filed
as an exhibit hereto, contains forward-looking statements that involve risk and
uncertainty. It should be noted that a variety of factors could cause the
combined company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in the combined company's
forward-looking statements.
The risks and uncertainties that may affect the operations,
performance, development, growth projections and results of the combined
company's business include, but are not limited to, the growth of the economy,
interest rate movements, timely development by the combined company of
technology enhancements for its products and operating systems, the impact of
competitive products, services and pricing, customer based requirements, Federal
and state legislation, acquisition cost savings and revenue enhancements and
similar matters. Readers of this report are cautioned not to place undue
reliance on forward-looking statements which are subject to influence by the
named risk factors and unanticipated future events. Actual results, accordingly,
may differ materially from management expectations.
CONTACTS:
FFOH - John Reusing (513) 351-6666 GFCO - Robert Sudbrook (513) 922-5959
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| FIDELITY FINANCIAL OF OHIO, INC. |
| Pro Forma Branch Locations |
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[Graphic-Depiction Branch locations of Fidelity Financial of Ohio, Inc.
in the Indiana & Kentucky Regions]
Transaction Description - Term Sheet
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Structure: Merger of equals
Tax-free exchange of common stock accounted for as a
"pooling of interest"
Cross options granted to each company for 19.9% of the other
partner
Exchange Ratio: Fixed exchange ratio of 1.50 Fidelity shares for each share
of Glenway; Fidelity shares remain outstanding (FFOH - NMS)
Pro Forma Diluted Shares Outstanding: 9 million
Pro Forma Holding Company: Combined assets: $835 million
Combined market capitalization: $120 million
Pro Forma Identities: Holding Company: Fidelity Financial of Ohio, Inc. (FFOH - NMS)
Bank: Centennial Bank
Expected Closing: First quarter 1999, subject to regulatory and shareholder
approvals
Transaction Description - Term Sheet
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Management of Holding Company:
Chairman - John R. Reusing (current Fidelity President & CEO)
President & CEO - Robert R. Sudbrook (current Glenway President & CEO)
Chairman of Executive Committee - Edgar a. Rust (current Glenway Chairman)
Chief Financial Officer - Paul D. Staubach (current Fidelity Chief Financial Officer)
Chief Lending Officer - Joseph D. Hughes (current Fidelity Chief Lend Officer)
Chief Operations Officer - Elaine M. Schmidt (current Glenway Chief Operating Officer)
Board of Directors: 12 members - 7 directors from Fidelity & 5 directors from
Glenway
Headquarters: 5535 Glenway Avenue - Current Glenway headquarters
Strategic Rationale for Merger
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o Combine two well-known Cincinnati thrift franchises.
o Enhanced deposit market share creates largest community bank presence
in existing counties.
o Added scale provides competitive advantage:
- More locations to serve customers
- Greater scale to absorb investment in commercial lending
- Enhanced image to attract quality lenders and customers
o Largest "Cincinnati" only lending institution.
o Intend to convert to commercial bank charter and develop commercial
lending business.
Merger Benefits
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o Merger creates a $835 million asset size Cincinnati-based community
banking franchise with approximately $120 million in market
capitalization.
o Identified cost savings of approximately $1.7 million which represents
12% of combined last 12 months G&A expenses. Potential for enhanced
cost savings post acquisition following evaluation of employee
compensation and benefit plans.
o Significantly accretive to both shareholder groups' earnings per
share.
o Pro forma institution creates significant opportunities in the merger
market arena.
o Combined management team provides enhanced intellectual capital
positioning company for successful transition into commercial banking
markets.
Pro Forma Market Share
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Pro Forma Market Share for Hamilton County, Ohio
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1. Fifth Third Bancorp 23.96%
2. Provident Financial Group 22.39%
3. Star Banc Corp. 14.81%
4. PNC Bank Corp. 12.59%
5. FIDELITY FINANCIAL OF OHIO 3.83%
6. KeyCorp 2.41%
7. Huntington Bancshares 1.94%
Cost Savings / One-time Charges
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Dollars in Thousands
Cost Savings Detail
-------------------
Salaries and payroll taxes $1,000
Benefits $100
Branch closures $100
Back office / operating costs $500
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Total $1,700
One-Time Charges
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Estimated one-time charges are not expected to exceed $4 million.
Financial Impact of Transaction
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Dollars in thousands except for per share numbers
FFOH GFCO
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1999 I.B.E.S. EPS Estimates $.91 $1.42*
Annual Pre-Tax Cost Savings 1,700
After-Tax Cost Savings 1,080
Actual 9 Month Impact** 810
Annual per Share Impact .12
Actual 9 Month Impact .09
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Pro Forma EPS - Annual Savings | $1.03 $1.55 |
| |
Earnings Accretion | 13% 9% |
| |
Pro Forma EPS - Actual 99 Savings | $1.00 $1.50 |
| |
Earnings Accretion | 10% 6% |
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*I.B.E.S. estimates not available; internal estimates used
** Transaction is expected to close in the first quarter in 1999
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| FIDELITY FINANCIAL OF OHIO, INC. |
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Balance Sheet Items (As of 6/30/98):
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Total Assets - $531,926
Total Deposits - $418,404
[Graphic-Depiction of 14 Branchs of Total Equity - $66,015
Fidelity Financial of Ohio, Inc.
located in Hamilton, Butler Income Statement Items (As of 6/30/98):
and Clermont Counties] ---------------------------------------
ROAA (LTM) - 0.90%
ROAE (LTM) - 7.20%
Efficiency Ratio (LTM) - 52.31%
Market Share Rank Diluted EPS (LTM) - $0.88
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1. Hamilton County, OH - #5 Market Information:
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2. Butler County, OH - #14
Stock Price (Close 9/25/98) - $13.25
3. Clermont Count, OH - #19
Market Capitalization - $74,226
Branch Detail: Price/Tangible Book Value - 126.31%
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# of Offices - 12 Price/LTM EPS - 15.06x
Avg. Deposits per Office - $34,867
*Dollars in Thousands
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| GLENWAY FINANCIAL CORPORATION |
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Balance Sheet Items (As of 6/30/98):
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Total Assets - $303,332
Total Deposits - $220,639
[Graphic-Depiction of 5 Branchs of Total Equity - $29,211
Glenway Financial Corporation
located in Hamilton County] Income Statement Items (As of 6/30/98):
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ROAA (LTM) - 0.92%
ROAE (LTM) - 9.58%
Efficiency Ratio (LTM) - 58.01%
Market Share Rank Diluted EPS (LTM) - $1.16
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1. Hamilton County, OH - #5 Market Information:
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Stock Price (Close 9/25/98) - $18.25
Market Capitalization - $41,851
Branch Detail: Price/Tangible Book Value - 146.12%
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# of Offices - 5 Price/LTM EPS - 15.73x
Avg. Deposits per Office - $44,128
*Dollars in Thousands