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News Release . . . .
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FIRSTPLUS Financial Group, Inc.
Daniel T. Phillips, Chairman/CEO
Eric C. Green, President
William P. Benac, CFO
Stephen Hunter, VP Investor Relations,
214-599-6300
LIFE Financial Corporation
Daniel L. Perl, Chief Executive Officer
(909) 637-4020
FOR IMMEDIATE RELEASE
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Michele Katz/Ian Hirsch/Michael Mahony
Press: Brian Maddox/Estelle Bieber
Morgan-Walke Associates
(212) 850-5600
FIRSTPLUS FINANCIAL GROUP, INC. TO ACQUIRE LIFE FINANCIAL
CORPORATION
DALLAS, TX, March 12, 1998 - FIRSTPLUS Financial Group, Inc. (NYSE: "FP") and
LIFE Financial Corporation (NASDAQ: "LFCO") today announced that the two
companies have entered into a definitive agreement whereby FIRSTPLUS will
acquire LIFE Financial in a stock-for-stock merger valued at approximately
$138 million. The transaction is structured to provide approximately $20.00
in value of FIRSTPLUS stock for each share of LIFE Financial stock to the
extent FIRSTPLUS stock trades between $30.00 and $40.00 per share. This
transaction is expected to close in either the third or fourth quarter of
1998. The acquisition is expected to be accounted for as a pooling of
interests.
LIFE, which has $409 million in assets, is the holding company for Life Bank,
a federally chartered Savings and Loan Association, and has experienced
considerable growth since Daniel L. Perl, Chairman and CEO, joined the
company in 1994. Perl, who has over 20 years of commercial and residential
lending experience, directed a rebound in Life Bank's earnings from a net
loss of $650,000 in calendar 1994 to a net profit of $12.7 million in
calendar 1997. LIFE completed its initial public offering in June 1997 at
$11.00 per share, and its closing price on Wednesday, March 11, 1998 was $18
per share.
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[Letterhead]
FIRSTPLUS FINANCIAL GROUP, INC. PAGE 2
For the 1997 calendar year, LIFE, and its subsidiary Life Bank, originated
$771 million of nonconventional mortgage loans, comprised principally of high
loan-to-value residential second mortgages, sub-prime first- and second-lien
mortgages, and commercial mortgages, all purchased through smaller
correspondents or originated through brokers. In addition, during the past
two years, LIFE implemented a retail origination program, which currently
encompasses nine retail offices throughout southern California, a HELOC
program and a commercial mortgage lending program, which focuses on owners of
income-producing commercial properties seeking loans up to $1.5 million.
Dan Phillips, FIRSTPLUS Chairman and CEO, noted the following: "LIFE is an
ideal merger partner for FIRSTPLUS because it furthers several important
FIRSTPLUS strategic goals. First, LIFE gives FIRSTPLUS immediate access to the
small correspondent and broker loan origination channel. FIRSTPLUS has not
previously capitalized on this origination channel with respect to
high-loan-to-value loans, and has only moderately developed this channel with
respect to B/C loans. Second, LIFE's servicing systems and infrastructure
accommodate HELOC and first lien loans (including escrow maintenance
functions), which will enable FIRSTPLUS to more quickly develop these and
related products. Third, LIFE services and originates commercial loans,
typically collateralized by full recourse first liens on income-producing
properties, which we believe is a business FIRSTPLUS can aggressively grow.
Fourth, while LIFE is a relatively inexpensive source of funding, we expect
to improve its cost of funds by expanding its deposit-taking branches and
developing a marketing strategy to increase commercial personal checking
accounts, potentially with Dan Marino as a spokesman. Fifth, LIFE can
be used as a platform for a variety of loan products, including credit cards.
Finally, LIFE also offers FIRSTPLUS access to a competent and efficient
whole-loan trading infrastructure."
Daniel L. Perl, LIFE's Chairman and CEO commented, "LIFE significantly
benefits from this merger because LIFE receives immediate access to loan
origination, servicing, risk management and marketing technologies and
infrastructures. FIRSTPLUS is a more efficient securitizer, and when
integrated with FIRSTPLUS's consumer finance operation, LIFE will be able to
offer a more diverse product-line to its customers. In addition, FIRSTPLUS,
through its previous Citizens Thrift and Loan acquisition, has a proven track
record of operating an FDIC-insured institution, making it an ideal merger
partner."
"This is FIRSTPLUS's most significant acquisition to date," continued Mr.
Phillips, "In addition to the strategic value of the combination, the
transaction, excluding the effect of transaction costs and related charges,
is expected to be immediately accretive to FIRSTPLUS's earnings, and during
calendar 1999 should be approximately $0.040 per share accretive. This
projected accretion will be accomplished through more efficient
securitization execution of LIFE's production, improved operating
efficiencies, and better first-lien sale execution as FIRSTPLUS utilizes
LIFE's B/C loan platform and whole-loan trading infrastructure. As more
marketing synergies and cost savings opportunities develop, and as LIFE's low
cost of funds are more frequently utilized, we expect the transaction to
continue to contribute accretively to future earnings."
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FIRSTPLUS FINANCIAL GROUP, INC. PAGE 3
FIRSTPLUS Financial Group, Inc. is a specialized consumer finance company
that, through its subsidiaries, originates, purchases, services and
securitizes consumer finance receivables, primarily home improvement and debt
consolidation loans, collateralized by liens on the borrower's home. The
Company, headquartered in Dallas, has regional offices in Columbia, South
Carolina; Columbus, Ohio; Denver, Colorado; Greenvile, South Carolina; Holly
Springs, Mississippi; Mission Viejo, California; Salt Lake City, Utah; and
Tustin, California; and a network of origination branches nationwide.
LIFE Financial Corporation conducts it business from fifteen locations: the
corporate headquarters and regional lending center located in Riverside,
California, additional regional lending centers located in Boston,
Massachusetts, Jacksonville, Florida, and the Denver, Colorado metropolitan
area, the Bank's home office in San Bernardino, California, an additional
savings branch office in Riverside, California and nine retail lending offices
in Southern California.
The two companies will hold a joint press conference this morning, Thursday,
March 12, 1998 at 10:00 a.m., eastern standard time at the Palace Hotel, 455
Madison Avenue, New York, NY on the 4th Floor, in the Holmes Suite. Anyone
interested in joining the press conference via teleconference call can do so
by dialing (800) 289-0730, confirmation number 443928. A digitized replay
will be available by dialing (402) 220-0103 available until noon, March 16,
1998.
The closing of the acquisition is subject to the receipt of all regulatory
approvals and approval by the stockholders of LIFE Financial Corporation, as
well as other customary conditions to closing; consequently, there can be no
assurance that the transaction will be consummated.
The above statements in this press release contain forward-looking statements
that involve a number of risks and uncertainties. In addition to the factors
discussed in this press release, reference is made to the Form 8-K, filed by
the Company with the Securities and Exchange Commission on December 19, 1996,
for a list of, and discussion with respect to, certain factors that could
cause actual results to differ materially from the forward-looking statements
contained herein.
Keefe, Bruyette & Woods, Inc. acted as financial advisor to LIFE. Banc One
Capital Corporation acted as financial advisor to FIRSTPLUS.
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