As filed with the Securities and Exchange Commission on June 7, 2002
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PROGRESS FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 6711 23-2413363
- ------------------------ ------------------------- -------------------
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorporation Industrial Classification Identification No.)
or organization) Code No.)
Four Sentry Parkway
Suite 200
Blue Bell, Pennsylvania 19422-0764
(610) 825-8800
-----------------------------------------------------------------------
(Address, including zip code and telephone number, including area code,
of Registrant's principal executive offices)
W. Kirk Wycoff
Chairman, President and Chief Executive Officer
Progress Financial Corporation
Four Sentry Parkway
Suite 200
P.O. Box 3036
Blue Bell, Pennsylvania 19422-0764
(610) 825-8800
------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
with a copy to:
Raymond A. Tiernan, Esq.
Kenneth B. Tabach, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this registration statement
becomes effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed
pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box.
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed Proposed
Maximum Maximum
Title of each Class Amount Offering Aggregate Amount of
of Securities to be to be Price Per Offering Registration
Registered Registered Share (2) Price (2) Fee
- ------------------------------------------------------------------------------
Common Stock, par
value $1.00 per
share 1,153,330 shares $9.95 $11,475,633 $1,055.76
==============================================================================
(1) This amount represents shares to be offered by the selling
shareholders from time to time after the effective date of this
registration statement at prevailing market prices at time of
sale. Pursuant to Rule 416, this registration statement also
covers such indeterminable additional shares as may become
issuable as a result of any future stock splits, stock dividends
or similar transactions.
(2) Estimated solely for purposes of calculating the amount of
the registration fee pursuant to Rule 457(c) based upon the
average of the high and low prices of the common stock as
reported on the Nasdaq National Market System on June 3, 2002
______________________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
- ------------------------------------------------------------------------------
Subject to Completion, Dated June 7, 2002
PROSPECTUS
1,153,330 Shares
PROGRESS FINANCIAL CORPORATION
Common Stock
This prospectus relates to the offering of up to 1,153,330
shares of common stock of Progress Financial Corporation which
may be sold from time to time by the selling shareholders
identified on pages 5 and 6. We will not receive any of the
proceeds from the sale of common stock being offered by the
selling stockholders.
The common stock is traded on the Nasdaq Stock Market's
National Market under the symbol "PFNC." On June 6, 2002, the
closing price for the common stock was $10.14 per share.
See "Risk Factors" beginning on page 2 for a discussion of
certain factors that should be considered carefully by
prospective investors in the common stock.
_______________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
_______________
The securities offered hereby are not deposits or savings
accounts and are not insured by the Federal Deposit Insurance
Corporation or any other government agency or instrumentality.
The date of this prospectus is _______ __, 2002
The information in this prospectus is not complete and may be
changed. The selling stockholders may not sell these securities
until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is
not permitted.
TABLE OF CONTENTS
Page
----
About this Prospectus....................................... 1
Risk Factors................................................ 2
Progress Financial Corporation.............................. 4
Use of Proceeds............................................. 5
Selling Shareholders........................................ 5
Description of Capital Stock................................ 7
Restrictions on Acquisitions of the Company................. 8
Plan of Distribution........................................ 8
Legal Matters............................................... 9
Experts..................................................... 9
Where You Can Find More Information......................... 9
Cautionary Statement About Forward Looking Statements....... 10
ABOUT THIS PROSPECTUS
In this prospectus, "Progress," "us," "we" and "our" refer
to Progress Financial Corporation and its consolidated
subsidiaries unless otherwise stated or the context otherwise
requires.
You should rely only on the information or representations
provided in this prospectus. We have authorized no one to
provide you with different information. You should not assume
that the information in this prospectus is accurate as of any
date other than the date on the front of this document.
The shares offered by this prospectus have not been
registered under the securities laws of any state or other
jurisdiction as of the date of this prospectus. We are not
making an offer of these securities in any jurisdiction where the
offer is not permitted. Brokers or dealers should confirm the
existence of an exemption from registration or effectuate such
registration in connection with any offer and sale of the shares.
You should read this prospectus together with the additional
information described under the heading "Where You Can Find More
Information" on page 9 of this prospectus.
1
RISK FACTORS
Prospective investors should consider carefully the
following factors in addition to the other information included
or incorporated by reference in this prospectus before making an
investment in the common stock.
We are operating under a written directive issued by the Office
of Thrift Supervision and we could be subject to additional
actions if we fail to comply with its terms.
During July 2001, our board of directors approved a
resolution to comply with the terms of a directive issued by the
Office of Thrift Supervision that requires Progress Bank to (i)
reduce its lending to early stage technology companies; (ii)
increase its leverage capital ratio to no less than 8.0% and its
total risk-basked capital ratio to no less than 14.0% by April 1,
2002 through gradual compliance; and (iii) increase its valuation
allowance and implement improved credit review and monitoring
programs. The increased capital levels reflect Progress Bank's
level of business lending, particularly in the technology sector
and continued economic concerns. At March 31, 2002, Progress
Bank's leverage capital ratio and total risk-based capital ratio
was 8.30% and 14.84%, respectively.
On February 7, 2002, the OTS approved our revised capital
enhancement plan and agreed to extend the dates that Progress
Bank must comply with the targeted ratio of classified assets to
capital. As revised, Progress Bank's classified assets to
capital ratio must not exceed 25% on June 30, 2002 and must not
exceed 20% on September 30, 2002. At April 30, 2002, Progress
Bank's classified assets to capital ratio was approximately
33.9%. Progress Bank is working aggressively to reduce the ratio
and comply with the terms of the directive; but there can be no
assurance that Progress Bank will be in compliance with these
requirements on such dates. Failure to comply with such ratios
could result in the OTS taking further action. As of March 31,
2002, Progress Bank was in compliance with the terms of the OTS
directive.
In connection with the OTS directive, we suspended our dividend
payment and there is no assurance that dividends will be
reinstated.
The terms of the OTS directive provide that we will not pay
cash dividends on our capital stock until Progress Bank achieves
the required capital levels and has implemented an acceptable
capital plan. As such, we have suspended the quarterly cash
dividend on our common stock as well as suspended our stock
repurchase program. Although we have submitted an acceptable
capital plan and Progress Bank is in compliance with the required
capital levels, there can be no assurance that the dividend will
be reinstated.
Our commercial business, construction, commercial real estate and
lease financing are riskier than traditional residential lending.
Although we recently de-emphasized lease financing, from
1996 through 2001 we emphasized the origination of commercial
business, residential construction, commercial real estate and
lease financing. These loans have different and more risk than
traditional single-family residential loans, and could result in
higher loan losses.
Commercial business loans often involve large loan balances
to single borrowers. Payments on commercial business loans
typically depend on the successful operation of the project or
the borrower's business. Commercial real estate lending can also
be affected by supply and demand conditions in the local market
for apartments, offices, warehouses and other commercial space.
Construction financing is also thought to have more risk of loss
than long-term loans on improved, owner-occupied real estate.
Whether a construction loan loses money depends largely upon the
accuracy of the initial estimate of the completed property's
value and the estimated cost of construction. During
construction, delays and cost overruns could occur for many
reasons. If the estimated value is inaccurate, we could have a
completed project with a value which is not sufficient to assure
full repayment of the loan.
Lease financing may also have more credit risk than single-
family residential lending because of the faster depreciation of
the types of assets securing leases such as equipment, phone
systems, computers, automobiles and furniture. In addition, we
have a greater risk of loss on the disposition of the residual
value of the equipment underlying its leases. For some of the
leases, we retain the residual value of the leased property upon
expiration of
2
the lease. In the event that the residual value is less than
provided for in the lease, we may lose money when we dispose of
the property.
Changes in interest rates could adversely effect our earnings.
Progress Bank's operations depend mostly on net interest
income, which is the difference between the interest income
earned on its interest-earning assets and the interest expense
paid on its interest-bearing liabilities. Like most financial
institutions, our earnings are affected by changes in market
interest rates and other economic factors beyond our control. If
our interest-earning assets have shorter maturities than our
interest-bearing liabilities, our yield on interest-earning
assets generally will adjust more rapidly than the cost of our
interest-bearing liabilities. As a result, our net interest
income generally would be hurt by decreases in interest rates and
helped by increases in interest rates.
In addition to affecting interest income and expense,
changes in interest rates also can affect the market value of our
interest-earning assets. Generally, the market value of fixed-
rate instruments moves in the opposite direction of moves in
interest rates. At December 31, 2001, we had $38.2 million of
investment securities which were classified as held to maturity.
Such designation effectively prevents us from selling these
assets in order to meet our liquidity needs or in response to
increases in market interest rates. Generally, the
reclassification and sale of any of these assets could result in
the remainder of our portfolio of investment and mortgage-backed
securities classified as held to maturity being reclassified as
available for sale. Securities classified as available for sale
must be reported at fair value, with unrealized gains or losses
being reported as a component of comprehensive income. Our
investment and mortgage-backed securities available for sale had
an aggregate carrying value of $211.8 million and an amortized
cost of $212.8 million at December 31, 2001.
Changes in interest rates also can affect the average life
of loans and mortgage-related securities. Decreases in interest
rates generally result in increased prepayments of loans and
mortgage-backed securities, as borrowers refinance their loans.
Under these circumstances, we may not be able to reinvest the
funds received because of the loan prepayments at rates which are
comparable to the rates on the maturing loans or securities.
We depend on key personnel whose loss could hurt our operations.
We are currently dependent on the continued services of
certain key management personnel. W. Kirk Wycoff, President and
Chief Executive Officer of Progress, maintains a significant role
in the development and management of our business. In addition,
we have put together a senior management team primarily with
commercial banking experience, Eric J. Morgan, Senior Vice
President for Credit and Administration, and Michael B. High,
Chief Operating Officer and Chief Financial Officer. The loss
of services of Mr. Wycoff or the other senior executives could
hurt our operations.
Anti-takeover provisions could discourage takeover attempts.
Certain provisions of our certificate of incorporation and
bylaws and Delaware law as well as our shareholder rights plan,
could have the effect of discouraging takeover attempts which
certain stockholders might deem to be in their interest. These
provisions may also make it more difficult for our stockholders
to remove members of our board of directors and management. In
addition, various federal laws and regulations could affect the
ability of another person to acquire us or shares of our common
stock.
3
PROGRESS FINANCIAL CORPORATION
We are a financial services company incorporated under the
laws of the State of Delaware headquartered in Blue Bell,
Pennsylvania. We own all of the outstanding stock of Progress
Bank, a federally chartered savings bank. We are a registered
unitary thrift holding company and authorized as a Delaware
corporation to engage in any activity permitted by the Delaware
General Corporation Law and federal law and regulation. The
holding company structure permits us to expand the size and scope
of the financial services offered beyond those that the bank is
permitted to offer.
Our current business strategy is to focus on community
banking and wealth management, providing a full range of
traditional banking services including commercial business loans,
commercial real estate loans, residential construction and
consumer lending, funded primarily by customer deposits and
providing financial planning services, life insurance and
investments. Our business activities also include commercial
mortgage banking and brokerage services and financial and
operational management consulting services for commercial
clients, which provide an additional source of fee income. In
2001, we began to focus on a corporate simplification program,
which commenced in early 2000. As part of this new strategy, we
reduced the number of our businesses at the end of 2001,
including venture fund management and real estate development. In
January 2002, Progress Bank also sold its technology lending
group to Comerica Bank-California.
Progress Bank increased its retail network with the addition
of four banking offices during 2001 expanding further into Bucks
County, Pennsylvania and into the state of New Jersey. Progress
Bank has a total of twenty banking offices in the Delaware Valley
area with ten full-service banking offices located in Montgomery
County, four full-service banking offices in Bucks County, one
full-service banking office in Delaware County, two full-service
banking offices in Chester County, two full-service banking
offices in Philadelphia County, in southeastern Pennsylvania and
one full-service banking office in Lambertville, Hunterdon
County, New Jersey. In 2001, banking hours were expanded at all
banking offices to give clients increased convenience of banking.
Also, during 2001, item processing was brought in-house,
providing more management oversight, greater operational
efficiency and improved quality.
Historically, our principal business consisted of attracting
deposits from the general public through Progress Bank's banking
office network and using such deposits to originate loans secured
by first mortgage liens on existing single-family residential,
multi-family residential and commercial real estate as well as to
originate construction loans. Beginning in 1995, our emphasis
shifted to commercial business, commercial real estate,
construction lending and equipment leasing, with a focus on
providing such banking services to small- and medium-sized
businesses, including companies in the technology sector. During
2001, we decided to reduce our exposure in the technology sector
and dedicate all resources to more traditional lines of business
which have a more predictable earnings level including expanding
the retail franchise and focusing on core banking. Therefore, we
exited the business of lending to pre-profit companies in July
2001and in November 2001 entered into an agreement to sell a
significant portion of loans in the technology sector, which
closed in January 2002. We also de-emphasized the equipment
leasing operation and have exited asset-based lending.
We also invest in mortgage-backed securities, including
securities which are insured or guaranteed by the U.S. Government
and agencies thereof, and other similar investments permitted by
applicable laws and regulations. In addition, Progress Bank is
periodically involved in real estate development and related
activities, through its subsidiaries, solely to facilitate the
completion and sale of certain property held as real estate
owned.
As a registered thrift holding company, we are subject to
examination and regulation by the Office of Thrift Supervision
and various reporting and other requirements of the Commission.
Progress Bank, as a federally chartered savings bank, is subject
to comprehensive regulation and examination by the OTS, as its
chartering authority and primary regulator, and by the Federal
Deposit Insurance Corporation, which administers the Savings
Association Insurance Fund, which insures Progress Bank's
deposits to the maximum extent permitted by law.
Progress Bank is a member of the FHLB of Pittsburgh, which
is one of the 12 regional banks which comprise the FHLB System.
Progress Bank is further subject to regulations of the Board of
Governors of the Federal Reserve System governing reserves
required to be maintained against deposits and certain other
matters.
4
Our principal executive offices are located at Four Sentry
Parkway, Suite 200, Blue Bell, Pennsylvania 19422-0764, and our
telephone number is (610) 825-8800.
USE OF PROCEEDS
We will not receive any of the proceeds from sales of stock
being offered. See "Selling Shareholders" for a list of those
persons who will receive the proceeds from such sales.
SELLING SHAREHOLDERS
The selling shareholders acquired the shares in a private
placement of our common stock in February 2002. In the private
placement, we issued 1,153,330 shares of our common stock at a
price of $7.50 per share to accredited investors. We received
net proceeds of approximately $8.3 million in the offering. We
granted registration rights to the investors covering the resale
of common stock issued to investors in the private placement. We
are registering the shares on a registration statement on Form S-
3, of which this prospectus forms a part. The shares are being
registered to permit public secondary trading of the shares, and
the selling shareholders may offer the shares for resale from
time to time.
The following table lists the selling shareholders and sets
forth certain information known to us as of May 31, 2002
regarding the beneficial ownership of common stock of each
selling shareholder. The following table assumes that the
selling shareholders sell all of the shares offered by this
prospectus. We are unable to determine the exact number of
shares that will actually be sold by each selling shareholder.
Shares owned prior Number of Shares owned after
to this offering shares this offering
------------------------- offered by -----------------------
Name Number Percentage this prospectus Number Percentage
- --------------------------------- ---------- ---------- --------------- ---------- ----------
Robert G. Cox 10,000 * % 10,000 -- --%
Richard J. Levinson 10,000 * 10,000 -- --
John M. Blume 10,000 * 10,000 -- --
Lester K. Wismer and
Evelyn K. Wismer 10,000
Arthur Wiener 10,000 * 10,000 -- --
Drake Associates, L.P. 10,000 * 10,000 -- --
Richard A. Hortsmann 30,000
Financial Institutions
Partners II, L.P. 16,500 * 16,500 -- --
Financial Institutions
Partners III, L.P. 16,500 * 16,500 -- --
Jackson Ventures IV L.P. 50,000 * 50,000 -- --
Metex Corporation 10,000 * 10,000 -- --
Stilwell Associates, L.P. 60,000 * 60,000 -- --
Craig A. White and
Deborah White 30,000 * 30,000 -- --
Banc of America Securities,
LLC FBO Hot Creek Investors, L.P. 53,650 * 53,650 -- --
Acadia Fund I, LP 75,000 1.1 75,000 -- --
FJ Morrissey & Co., Inc. FBO
James M. Weaver IRA 27,230 * 23,330 3,900 *
FJ Morrissey & Co., Inc. FBO
Alexander A. Maguire IRA 12,384 * 10,000 2,384 *
Edward H. Maguire 10,000 * 10,000 -- --
Susan M. Barrett 10,000 * 10,000 -- --
5
Shares owned prior Number of Shares owned after
to this offering shares this offering
------------------------- offered by -----------------------
Name Number Percentage this prospectus Number Percentage
- -------------------------------- ---------- ---------- --------------- ---------- ----------
Virginia M. W. Gardiner 10,000 * % 10,000 -- --%
Suzanne F. Collins 10,000 * 10,000 -- --
Dr. John P. Dahdah and Dr.
Carol Henwood-Dahdah 10,000 * 10,000 -- --
Leon Prince 10,000 * 10,000 -- --
Philadelphia United Life
Insurance Co. c/o
Mr. Robert R. Ries 10,000 * 10,000 -- --
FJ Morrissey & Co., Inc. FBO
Henry B. Maguire IRA 10,243 * 10,000 243 *
Robert Weis 10,000 * 10,000 -- --
RBC Dain Rauscher FBO Peter
Panas IRA 10,000 * 10,000 -- --
Bay Pond Partners 70,005
Bay Pond Investors (Bermuda) L.P. 11,667
Astor & Co 151,678
Verity Associates LP 20,000 * 20,000 -- --
Hamburg, Rubin, Mullin, Maxwell
& Lupin, a Professional
Corporation Retirement Plan 33,622 * 10,000 23,622 *
James Marks 15,000 * 15,000 -- --
Jackson T. Stephens 66,000 * 25,000 41,000 *
Robert & Patricia P. Ayerle 20,300 * 15,000 5,300 *
SC Fundamental Value Fund, L.P. 38,760 * 38,000 760 *
SC Fundamental Value BVI, Ltd. 63,240 * 62,000 1,240 *
Leon and Lois Fox 102,689 1.5 10,000 92,689 1.3
Arthur J. Kania Trust udt
3/31/67 (1) 240,357 3.4 40,000 200,357 2.8
Arlene Hillig 15,000 * 15,000 -- --
Arthur J. Kania, Jr 10,000 * 10,000 -- --
James D. Kania 10,000 * 10,000 -- --
Linda Kania 15,000 * 15,000 -- --
Arthur J. Kania FBO Arthur J.
Kania III Trust 7,500 * 7,500 -- --
Arthur J. Kania FBO Katherine
E. Kania Trust 5,000 * 5,000 -- --
Arthur J. Kania FBO James D.
Kania, Jr. Trust 7,500 * 7,500 -- --
Arthur J. Kania FBO Michael
Kania Trust 7,500 * 7,500 -- --
Arthur J. Kania FBO Alyssa M.
Roland Trust 7,500 * 7,500 -- --
Arthur J. Kania FBO Jenna
Roland Trust 7,500 * 7,500 -- --
Arthur J. Kania FBO Heather
Roland Trust 7,500 * 7,500 -- --
Brittany Investors 100,000 1.4 50,000 50,000 *
________________
*Less than 1% of the outstanding common stock.
(1) Arthur J. Kania disclaims beneficial ownership or control of shares owned
by the Arthur J. Kania Trust or members of his family. Includes
155,389 shares beneficially owned by Arthur J. Kania directly.
6
DESCRIPTION OF CAPITAL STOCK
We are currently authorized to issue up to 12,000,000 shares
of common stock, par value $1.00 per share, and 1,000,000 shares
of preferred stock, par value $.01 per share. At March 31, 2002,
there were 7,034,000 shares of common stock issued and outstanding
and no shares of preferred stock were issued. The capital stock of
Progress Financial Corporation does not represent or constitute a
savings account or deposit of Progress Financial Corporation or
Progress Bank and is not insured by the FDIC or any other governmental
agency.
Common Stock
General. Each share of common stock has the same relative
rights and is identical in all respects with each other share of
common stock. The common stock is not subject to call for
redemption and, is fully paid and non-assessable.
Voting Rights. Except as provided in any resolution or
resolutions adopted by the board of directors establishing any
series of preferred stock, the holders of common stock possess
exclusive voting rights in Progress. Each holder of common stock
is entitled to one vote for each share held on all matters voted
upon by stockholders. Stockholders are not permitted to cumulate
votes in elections of directors.
Dividends. The holders of the common stock are entitled to
such dividends as may be declared from time to time by the board
of directors out of funds legally available therefor.
Pre-emptive Rights. Holders of the common stock do not have
any pre-emptive rights with respect to any shares which may be
issued by Progress in the future; Progress, therefore, may sell
shares of common stock without first offering them to its then-
existing stockholders.
Liquidation. In the event of any liquidation, dissolution
or winding up of Progress, the holders of the common stock would
be entitled to receive, after payment of all debts and
liabilities of Progress, all assets of Progress available for
distribution, subject to the rights of the holders of any
preferred stock which may be issued with a priority in
liquidation or dissolution over the holders of the common stock.
Preferred Stock
The board of directors is authorized to issue preferred
stock and to fix and state voting powers, designations,
preferences or other special rights of such shares and the
qualifications, limitations and restrictions thereof. The
preferred stock may be issued in distinctly designated series,
may be convertible into common stock and may rank prior to the
common stock as to dividend rights, liquidation preferences, or
both.
The authorized but unissued shares of preferred stock (as
well as the authorized but unissued and unreserved shares of
common stock) are available for issuance in future mergers or
acquisitions, in a future public offering or private placement or
for other general corporate purposes. Except as otherwise
required to approve the transaction in which the additional
authorized shares of preferred stock would be issued, stockholder
approval generally would not be required for the issuance of
these shares. Depending on the circumstances, however,
stockholder approval may be required pursuant to the requirements
for continued listing of the common stock on the Nasdaq National
Market System or the requirements of any exchange on which the
common stock may then be listed.
Transfer Agent
The transfer agent and registrar for the common stock is
American Stock Transfer & Trust Company, New York, New York.
7
RESTRICTIONS ON ACQUISITION OF THE COMPANY
General
Our certificate of incorporation and bylaws, the Delaware
General Corporation Law and applicable federal laws and
regulations contain certain provisions which may be deemed to
have a potential anti-takeover effect. Such provisions may have
the effect of discouraging a future takeover attempt which is not
approved by the board of directors but which our stockholders may
deem to be in their best interest or in which stockholders may
receive a substantial premium for their shares over then current
market prices. As a result, stockholders who might desire to
participate in such a transaction may not have an opportunity to
do so. Certain of such provisions also may make it more
difficult for stockholders to remove members of our board of
directors and management. We are not aware of any existing or
threatened effort to acquire control of Progress.
Federal Laws and Regulations
Federal laws and regulations generally require any person
who intends to acquire control of a savings and loan holding
company or savings institution to give at least 60 days prior
written notice to the OTS. "Control" is defined as the power,
directly or indirectly, to direct the management or policies of a
savings institution or to vote 25% or more of any class of voting
securities of the savings institution. In addition to the
foregoing restrictions, a company must secure the approval of the
OTS before it can acquire control of a savings institution.
Under federal regulations, a person (including business entities)
is deemed conclusively to have acquired control if, among other
things, such person acquires: (a) 25% or more of any class of
voting stock of the savings institution; (b) irrevocable proxies
representing 25% or more of any class of voting stock of the
savings institution; (c) any combination of voting stock and
irrevocable proxies representing 25% or more of any class of such
institution's voting stock; or (d) control of the election of a
majority of the directors of the savings institution. In
addition, a rebuttable presumption of control arises in the event
a person acquires more than 10% of any class of voting stock (or
more than 25% of any class of non-voting stock) and is subject to
one or more of eight enumerated control factors. Such
regulations also set forth rebuttable presumptions of concerted
action and the procedures to follow to rebut any such
presumptions. The OTS is specifically empowered to disapprove
such an acquisition of control if it finds, among other reasons,
that (i) the acquisition would substantially lessen competition;
(ii) the financial condition of the acquiring person might
jeopardize the institution or its depositors; or (iii) the
competency, experience or integrity of the acquiring person
indicates that it would not be in the interest of the depositors,
the institution or the public to permit the acquisition of
control by such person.
PLAN OF DISTRIBUTION
Each of the selling stockholders may sell his, her or its
shares of stock offered directly or through broker-dealers who
may act solely as agents, or who may acquire shares as
principals. The distribution of the shares of stock may be
effected in one or more transactions that may take place on the
Nasdaq Stock Market, including block trades or ordinary broker's
transactions, or through privately-negotiated transactions, or in
accordance with Rule 144 under the Securities Act (or any other
applicable exemption from registration under the Securities Act),
through a combination of any such methods of sale, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and
customary or negotiated brokerage fees or commissions may be paid
by the selling stockholders in connection with such sales. Sales
of the stock may be effected to cover previous short sales of
common stock.
The selling stockholders may affect transactions by selling
the stock directly or through broker-dealers acting either as
principal or as agent, and such broker-dealers may receive
compensation in the form of usual and customary or negotiated
discounts, concessions or commissions from the selling
stockholders.
The aggregate proceeds to the selling stockholders from the
sale of the stock will be the purchase price of the stock sold
less the aggregate agents' commissions, if any, and other
expenses of issuance and distribution not borne by Progress. The
selling stockholders and any dealers or agents that participate
in the distribution of the stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any
profit on the sale of the stock
8
by them and any commissions received by any such dealers or agents
might be deemed to be underwriting discounts and commissions under
the Securities Act.
Each selling stockholder and any other person participating
in a distribution of the stock will be subject to applicable
provisions of the Exchange Act, including Regulation M and Rules
101 through 105 thereunder. Regulation M governs the activities
of persons participating in a distribution of securities and,
consequently, may restrict certain activities of, and limit the
timing of purchases and sales of stock by, selling stockholders
and other persons participating in a distribution of the stock.
Furthermore, under Regulation M, persons engaged in a
distribution of securities are prohibited from simultaneously
engaging in market making and certain other activities with
respect to such securities for a specified period of time prior
to the commencement of such distribution, subject to exceptions
or exemptions. All of the foregoing may affect the marketability
of the securities offered hereby.
LEGAL MATTERS
The validity of the shares of common stock being offering
will be passed upon for us by the law firm of Elias, Matz,
Tiernan & Herrick L.L.P., Washington, D.C.
EXPERTS
The consolidated financial statements incorporated in this
prospectus by reference from our annual report on Form 10-K for
the year ended December 31, 2001 have been audited by
PricewaterhouseCoopers LLP, independent public accountants, as
stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such
firm given upon its authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, proxy statements
or other information filed by us at the Commission's public
reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the Commission.
Please call the Commission at 1-800-SEC-0330 for further
information on the operation of the Commission's public reference
rooms. Our filings with the Commission are also available to the
public from document retrieval services and at the Commission's
Internet website (http://www.sec.gov).
We have filed with the Commission a registration statement
on Form S-3 under the Securities Act. This prospectus is a part
of the registration statement. As permitted by the Securities
Act, this prospectus does not contain all of the information you
can find in the registration statement. The registration
statement is available for inspection and copying as set forth
above.
The Commission allows us to "incorporate by reference" into
this prospectus, which means that we can disclose important
information to you by referring you to another document filed
separately with the Commission. The information incorporated by
reference is considered to be part of this prospectus, except for
any information superseded by information contained in later-
filed documents incorporated by reference in this prospectus. We
incorporate by reference the documents filed by it with the
Commission listed below and any future filings made by us with
the Commission prior to the termination of the offering made
hereby under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act.
9
Company Filings (File No. 0-14815) Period/Date
---------------------------------- -----------
Annual Report on Form 10-K Year ended December 31, 2001
Quarterly Report on Form 10-Q Three months ended March 31, 2002
Current Reports on Form 8-K Filed on January 9, January 23,
February 7, February 14, and
April 22, 2002
You may request a copy of these filings, at no cost, by writing
or telephoning us at the following address:
Progress Financial Corporation
Four Sentry Parkway, Suite 200
Blue Bell, Pennsylvania 19422-0764
Attention: Michael B. High
(610) 825-8800
You should rely only on the information contained or
incorporated by reference in this prospectus. We have not
authorized anyone else to provide you with information that is
different from that which is contained in this prospectus.
Moreover, no offer of the common stock is being made in any state
where the offer is not permitted. The information contained in
this prospectus speaks only as of its date unless the information
specifically indicates that another date applies.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained or incorporated by reference
herein are not based on historical facts and are "forward-looking
statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. These forward-looking
statements, which are based on various assumptions (some of which
are beyond our control), may be identified by reference to a
future period(s) or by the use of forward-looking terminology,
such as "anticipate," "believe," "commitment," "consider,"
"continue," "could," "encourage," "estimate," "expect," "intend,"
"may," "plan," "present," "propose," "prospect," "will," future
or conditional verb tenses, similar terms, variations on such
terms or negatives of such terms. Although we believe that the
anticipated results or other expectations reflected in such
forward-looking statements are based on reasonable assumptions,
we can give no assurance that those results or expectations will
be attained. Actual results could differ materially from those
indicated in such statements due to risks, uncertainties and
changes with respect to a variety of factors, including, but not
limited to, those described below and other factors generally
affecting the banking industry. Some, but not all, of these
risks are summarized under "Risk Factors" in this prospectus as
well as in our reports and filings with the Commission, including
our periodic reports under the Exchange Act. We do not
undertake, and specifically disclaim any obligation, to publicly
release the results of any revisions which may be made to any
forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the
date of such statements.
10
==============================================================================
1,153,330 SHARES
PROGRESS FINANCIAL CORPORATION
COMMON STOCK
_______________
PROSPECTUS
_______________
________ __, 2002
==============================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee $ 1,056
Legal fees and expenses 10,000*
Accounting fees and expenses 3,000*
Miscellaneous expenses 1,944
--------
Total $ 16,000*
========
_________________
* Estimated.
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL")
sets forth circumstances under which directors, officers,
employees and agents may be insured or indemnified against
liability which they may incur in their capacity as such. The
Certificate of Incorporation and Bylaws of Progress provide that
the directors, officers, employees and agents of Progress shall
be indemnified to the full extent permitted by law. Such
indemnity shall extend to expenses, including attorney's fees,
judgements, fines and amounts paid in the settlement, prosecution
or defense of the foregoing actions. Section 102(b)(7) of the
DGCL sets forth circumstances under which a director's personal
liability to a corporation or its stockholders for money damages
for breach of fiduciary duty as a director may be eliminated or
limited. The Certificate of Incorporation provides for the
limitation of personal liability of directors to stockholders for
monetary damages to Progress or its stockholders for such
director's breach of fiduciary duty as a director of Progress
to the full extent permitted by law.
Progress carries a liability insurance policy for its
officers and directors.
Item 16. Exhibits and Financial Statement Schedules.
The exhibits and financial statement schedules filed as a
part of this registration statement are as follows:
(a) List of Exhibits:
Exhibit No. Exhibit Location
- ----------- ------- --------
4 Specimen Common Stock certificate (1)
5 Opinion of Elias, Matz, Tiernan & Herrick (filed herewith)
L.L.P. regarding legality of securities
being registered
23.1 Consent of Elias, Matz, Tiernan & Herrick --
L.L.P. (contained in the opinion included
as Exhibit 5)
23.2 Consent of PricewaterhouseCoopers LLP (filed herewith)
24 Powers of Attorney (included in the --
signature page to the filing of this
Registration Statement)
_____________
(1) Exhibit is incorporated by reference to the Registrant's
Registration Statement on Form S-8 (File No. 33-10160) filed with
the Commission on November 13, 1986.
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(b) Financial Statement Schedules.
No financial statement schedules are filed because the
required information is not applicable or is included in the
consolidated financial statements or related notes.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Blue Bell, Commonwealth of Pennsylvania on the 7th
day of June 2002.
PROGRESS FINANCIAL CORPORATION
By: /s/ W. Kirk Wycoff
-------------------------
W. Kirk Wycoff
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated. Each of
the directors and/or officers of Progress Financial Corporation
whose signature appears below hereby appoints W. Kirk Wycoff and
Michael B. High, and each of them severally, as his or her
attorney-in-fact to sign in his or her name and behalf, in any
and all capacities stated below and to file with the Securities
and Exchange Commission any and all amendments, including post-
effective amendments, to this Registration Statement on Form S-3,
making such changes in the Registration Statement as appropriate,
and generally to do all such things in their behalf in their
capacities as directors and/or officers to enable Progress
Financial Corporation to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities
and Exchange Commission.
/s/ W. Kirk Wycoff Date: June 7, 2002
- -----------------------------------------------
W. Kirk Wycoff
Chairman, President and Chief Executive Officer
(principal executive officer)
/s/ Michael B. High Date: June 7, 2002
- -----------------------------------------------
Michael B. High
Chief Financial Officer and Chief Operating Officer
(principal financial and accounting officer)
/s/ John E. F. Corson Date: June 7, 2002
- -----------------------------------------------
John E. F. Corson
Director
II-3
/s/ William O. Daggett, Jr. Date: June 7, 2002
- -----------------------------------------------
William O. Daggett, Jr.
Director
/s/ G. Daniel Jones Date: June 7, 2002
- -----------------------------------------------
G. Daniel Jones
Director
/s/ Joseph R. Klinger Date: June 7, 2002
- -----------------------------------------------
Joseph R. Klinger
Director
/s/ Paul M. LaNoce Date: June 7, 2002
- -----------------------------------------------
Paul M. LaNoce
Director
/s/ A. John May, III Date: June 7, 2002
- -----------------------------------------------
A. John May, III
Director
/s/ William L. Mueller Date: June 7, 2002
- -----------------------------------------------
William L. Mueller
Director
/s/ Kevin J. Silverang Date: June 7, 2002
- -----------------------------------------------
Kevin J. Silverang
Director
/s/ Charles J. Tornetta Date: June 7, 2002
- -----------------------------------------------
Charles J. Tornetta
Director
/s/ Stephen T. Zarilli Date: June 7, 2002
- -----------------------------------------------
Stephen T. Zarilli
Director
II-4