SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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UNIFIED FINANCIAL SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person Filing Proxy Statement if other than the Registrant)
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[LOGO] UNIFIED FINANCIAL SERVICES
FILED BY UNIFIED FINANCIAL SERVICES, INC.
PURSUANT TO RULE 14a-12 OF THE SECURITIES EXCHANGE ACT
June 16, 2003
Dear Stockholders:
The first quarter of 2003 produced a continuation of the progress in the
underlying fundamentals that we described to you in our recent annual
stockholders' letter. During such quarter, adjusted revenues (as discussed
below) advanced, our gross profit widened, we achieved slight profitability and
our trust and retirement services operation experienced very good growth.
We reported the following for the first quarter of 2003 compared to the
first quarter of 2002:
(000 OMITTED) 1Q-02 1Q-03 CHANGE
----- ----- ------
Gross revenue................... $4,329 $4,214 (2.7)%
Gross profit.................... 3,727 3,838 3.0
Gross profit percentage......... 86.1% 91.1% n/m
While gross revenues declined 2.7% for the first quarter of 2003 compared
to the first quarter of 2002, this decline was attributable to a significant
decline in our brokerage revenues. As we previously have informed you, we are
consciously narrowing this business' scope and focus to better concentrate its
ability to service and support the continued growth in our mutual fund
administrative services operation. Adjusting our quarter-over-quarter results by
eliminating the effects of brokerage revenues in both quarters shows a very nice
3.1% gain in all other business line revenues.
(000 OMITTED) 1Q-02 1Q-03 CHANGE
----- ----- ------
Gross revenue................... $4,329 $4,214 (2.7)%
Less: brokerage revenue........ 496 262 (47.2)
-------- --------
Adjusted gross revenue.......... 3,833 3,952 3.1
Gross profit.................... 3,727 3,838 3.0
Less: brokerage gross profit 148 118 (20.3)
--------- --------
Adjusted gross profit........... 3,579 3,720 3.9
Adjusted gross profit percentage 93.4% 94.1% n/m
We are particularly pleased with these results given that the markets were
again off 3.5% to 4.0% at March 31, 2003 from year-end 2002 levels. Also, as the
above chart illustrates, we experienced a nice gain in gross profit to an
adjusted 94.1% for the quarter ended March 31, 2003, excluding our brokerage
operation. Even on a non-adjusted basis, the first quarter's gross profit was
91.1% as compared to 86.5% for all of 2002.
As to profitability, we are pleased to report a pretax profit from
continuing operations of $24,479. Modest to be sure but, hopefully, a start on
the road to consistent profitability in a more stable economic environment.
June 16, 2003
Page 2
We also are pleased to report to you that on June 9, 2003 we entered into
an agreement to sell Unified Banking Company. A copy of the press release with
respect to such transaction is included for your information and review. The
decision to sell Unified Banking Company is in keeping with our company's
long-term strategy to focus on managing and servicing assets, specifically the
business conducted by our mutual fund administration services, trust and
retirement services and investment advisory operations. We plan to share our
developing strategic plan with you at our 2003 annual stockholders' meeting,
which is tentatively scheduled for late in the third quarter of 2003.
Finally, we are excited to report that our trust and retirement services
operation reported new account relationships totaling just over $54.0 million
for the first quarter of 2003. This strong performance follows on the heels of
our year-end report to you of growth for 2002 of over $63.1 million for our
trust and retirement services operation. Congratulations to Dr. Kasten and his
entire team.
This quarterly stockholder letter may be deemed to be solicitation material
in respect of the proposed acquisition of Unified Banking Company by Blue River
Bancshares. Unified Financial Services and its directors and executive officers
may be deemed to be participants in the solicitation of proxies in respect of
the proposed transaction. In connection with the proposed transaction, Unified
Financial Services will file a proxy statement with the Securities and Exchange
Commission. STOCKHOLDERS OF UNIFIED FINANCIAL SERVICES ARE URGED TO READ THE
PROXY STATEMENT AND OTHER RELEVANT MATERIALS (WHEN THEY BECOME AVAILABLE)
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT UNIFIED FINANCIAL
SERVICES, INC., BLUE RIVER BANCSHARES, INC. AND THE PROPOSED TRANSACTION. A
DESCRIPTION OF THE INTERESTS OF THE DIRECTORS AND EXECUTIVE OFFICERS OF UNIFIED
FINANCIAL SERVICES, INC IN THE TRANSACTION, IF ANY, WILL BE SET FORTH IN THE
PROXY STATEMENT. In addition to the proxy statement to be filed by Unified
Financial Services in connection with the proposed transaction, Unified
Financial Services files annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission. The proxy
statement and other relevant materials (when they become available), and any
other documents filed by Unified Financial Services with the Securities and
Exchange Commission, may be obtained free of charge at the Securities and
Exchange Commission's website at (www.sec.gov), and also may be obtained from
Unified Financial Services' corporate secretary.
We thank you for your continued support.
Sincerely,
/s/ Timothy L. Ashburn
Timothy L. Ashburn
Chairman
/s/ John S. Penn
John S. Penn
President and Chief Executive Officer
SELECTED SUMMARY FINANCIAL INFORMATION
QUARTER ENDED MARCH 31,
-----------------------------------
2003 2002
------------ ----------
Income Statement Data:
Gross revenue................................................. $ 4,213,795 $ 4,329,307
Gross profit.................................................. 3,838,091 3,727,478
Total expenses................................................ 3,813,612 3,750,071
Income (loss) from continuing operations...................... 24,479 (22,593)
Other loss.................................................... (4,528) (6,095)
Income tax benefit (expense).................................. (10,000) 3,338
Net income (loss) from continuing operations.................. 9,951 (25,350)
Net income (loss) from discontinued operations................ (300) 18,302
Net income (loss)............................................. 9,651 (7,048)
Common Share Data:
Basic earnings (loss) per share............................... $ -- $ --
Fully diluted earnings (loss) per share...................... -- --
Book value per share (fully diluted).......................... 5.35 5.80
Basic common shares outstanding .............................. 2,829,246 2,877,634
Fully diluted common shares outstanding....................... 2,829,246 2,877,634
AS OF MARCH 31,
-------------------------------
2003 2002
-------- --------
Balance Sheet Data:
Total assets.................................................. $ 86,713,283 $ 89,639,882
Investment securities......................................... 711,432 594,414
Total loans, net of allowance................................. 57,120,832 52,218,461
Total deposits................................................ 63,565,867 61,333,769
Stockholders' equity.......................................... 15,132,134 16,682,745
Other Selected Data:
Assets under service........................................ $ 10,272,993,364 $ 5,912,663,614
Assets under management....................................... 705,713,070 945,875,134
Employees..................................................... 157 168
PRESS RELEASE
For Immediate Release
Date: June 9, 2003
Contact: For Blue River Bancshares, Inc.
Lawrence T. Toombs, President
Blue River Bancshares, Inc.
(317) 398-9721
For Unified Financial Services, Inc.
John S. Penn, President
Unified Financial Services, Inc.
(859) 296-2018
BLUE RIVER BANCSHARES, INC. SIGNS AGREEMENT
TO ACQUIRE UNIFIED BANKING COMPANY, LEXINGTON, KY
Shelbyville, IN -- Blue River Bancshares, Inc. (NASDAQ SC: BRBI) and
Unified Financial Services, Inc., Lexington, Kentucky, announced today that they
have signed a stock purchase agreement pursuant to which Blue River Bancshares
will acquire the outstanding shares of Unified Banking Company, Lexington,
Kentucky, a wholly-owned subsidiary of Unified Financial Services, Inc.
Under the terms of the agreement, Blue River Bancshares will acquire all of
the outstanding shares of common stock of Unified Banking Company for $8.2
million in cash. The acquisition is subject to the approval of the stockholders
of Unified Financial Services Inc., approvals by regulatory authorities,
financing contingencies and certain other conditions provided in the definitive
agreement.
Blue River Bancshares is the holding company for Shelby County Bank, a
federal savings bank with assets of approximately $98 million operating four
banking offices in Shelby County, Indiana. Unified Banking Company is a federal
savings bank with approximately $82 million in assets and one banking office in
Lexington, Kentucky.
Unified Financial Services, Inc. is a holding company for various financial
services companies, which primarily focus on three principal businesses: the
provision of complete back-office and shareholder services for the assets of
third-party mutual fund families; management and administration of 401(k) and
other ERISA-directed assets; and management of wealth for individuals through a
suite of family-office services.
"We believe this acquisition fits Blue River Bancshares' long-term strategy
of concentrating our efforts in the development of premier community banking
affiliates," said Larry Toombs, President of Blue River. "Unified Banking
Company and its experienced management group have done an excellent job since
the bank's inception in 1999. We know they have the commitment to a community
banking philosophy and will continue to serve the overall Lexington marketplace
in a superior manner. As a part of Blue River, we will support Unified Banking
Company's dedication to community investment and Unified Banking Company's
commitment to grow and prosper."
Russell Breeden, III, Chairman of the Executive Committee of Blue River
Bancshares added, "After the acquisition, the two banks will be operated
independently so that each Board of Directors and management team can fully
serve its distinct market."
"Since we will operate independently and with no change in employees, I
believe this transaction will allow Unified Banking Company to maintain its
growth and serve its clients in the manner to which they have been accustomed,"
said Olin W. "Buddy" Bryant, President of Unified Banking Company.
John S. Penn, President and Chief Executive Officer of Unified Financial
Services, Inc., stated, "Unified has enjoyed its affiliation with Unified
Banking Company and its people. We feel this transaction, however, is in the
best interest of our stockholders. As a part of our company's long-term
strategy, this transaction will allow Unified to focus on managing and servicing
assets."
The acquisition is expected to close in the fourth quarter of 2003. Upon
completion of the acquisition Blue River Bancshares expect to have approximately
$180 million in total assets.
The statements in this press release do not constitute an offer to sell or
the solicitation of any offer to buy the securities described above, nor shall
there be any sale of these securities in any state in which such an offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state. These offerings will
only be made pursuant to an effective registration statement filed with the
Securities and Exchange Commission.
Certain matters in this press release constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 and
are subject to certain risks and uncertainties, which may cause actual results
to differ materially. Among the risks and uncertainties that could cause actual
results to vary materially are: (1) failure to obtain necessary financing for
the acquisition, (2) failure to obtain necessary stockholder approval of the
transactions, (3) failure to obtain necessary regulatory approval of the
transactions, (4) necessary conditions in the stock purchase agreement not being
satisfied, and (5) the occurrence or existence of any facts or circumstances
which would allow any party to the stock purchase agreement to terminate the
agreement. Blue River's and Unified Financial Service's actual results,
performance and achievements may differ materially from those suggested,
expressed or implied by forward-looking statements due to a wide range of
factors including, but not limited to, the general business environment,
interest rates, the economy, competitive conditions between banks and non-bank
financial services providers, regulatory changes and other risks detailed in the
Blue River and Unified Financial Service reports filed with the Securities and
Exchange Commission.
This press release may be deemed to be solicitation material in respect of
the proposed acquisition of Unified Banking Company by Blue River Bancshares.
Unified Financial Services and its directors and executive officers may be
deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. In connection with the proposed transaction, Unified
Financial Services will file a proxy statement with the Securities and Exchange
Commission. INVESTORS AND SECURITY HOLDERS OF UNIFIED FINANCIAL SERVICES ARE
URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS (WHEN THEY BECOME
AVAILABLE) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT UNIFIED
FINANCIAL SERVICES, INC., BLUE RIVER BANCSHARES, INC. AND THE PROPOSED
TRANSACTION. A DESCRIPTION OF THE INTERESTS OF THE DIRECTORS AND EXECUTIVE
OFFICERS OF UNIFIED FINANCIAL SERVICES, INC IN THE TRANSACTION, IF ANY, WILL BE
SET FORTH IN THE PROXY STATEMENT. Unified Financial Services currently
anticipates that the meeting of stockholders to be called to vote upon the
transaction will be held late in the third quarter of 2003. In addition to the
proxy statement to be filed by Unified Financial Services in connection with the
proposed transaction, each of Unified Financial Services and Blue River
Bancshares files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. The proxy
statement and other relevant materials (when they become available), and any
other documents filed by Unified Financial Services or Blue River Bancshares
with the Securities and Exchange Commission, may be obtained free of charge at
the Securities and Exchange Commission's website at (www.sec.gov), and also may
be obtained from Unified Financial Services and Blue River Bancshares.