Filed by: First Niagara Financial Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: Troy Financial Corporation
Commission File No.: 000-25439
Date: August 11, 2003
First Niagara Financial Group, Inc. to Acquire Troy Financial Corporation
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First Niagara to Expand into New York Capital Region;
Transaction Expected to be 14% Accretive to First Niagara's 2004 E.P.S.
LOCKPORT, NY and TROY, NY -- The Boards of Directors of First Niagara Financial
Group, Inc. (NASDAQ: FNFG) and Troy Financial Corporation (NASDAQ: TRYF) jointly
announced today that they have signed a definitive Merger Agreement under which
Troy Financial Corporation will merge into First Niagara. Headquartered in Troy,
New York, Troy Financial Corporation is the holding company for The Troy Savings
Bank and The Troy Commercial Bank.
Upon completion of the transaction, First Niagara will serve customers through a
combined network of 67 branches in 19 counties throughout New York State. The
company will have total assets of approximately $4.9 billion.
Under the terms of the Agreement, First Niagara Financial Group, Inc. will pay
$35.50 per share for each of the 9,394,510 outstanding shares of Troy Financial
Corporation common stock. The purchase price represents 212% of Troy Financial
Corporation's book value as of June 30, 2003, 20.6 times 2004 estimated earnings
and 15.1 times 2004 estimated earnings including anticipated after tax expense
savings. The purchase price represents a premium of approximately 23% over
Troy's closing stock price on August 8, 2003. 57% of the consideration will be
in First Niagara stock and 43% will be in cash.
Including the cash-out value of outstanding Troy Financial options, the
aggregate purchase price for Troy Financial Corporation will be approximately
$356.6 million. The acquisition is anticipated to be accretive to First
Niagara's estimated 2004 earnings per share by approximately 14% based on
anticipated cost savings of approximately $10.7 million pre-tax. It is expected
that the acquisition will be completed in late fourth quarter 2003 or early
2004.
In announcing the transaction, William E. Swan, chairman, president and CEO of
First Niagara Financial Group, Inc. and First Niagara Bank said, "This
transaction is a significant milestone in the strategic development of First
Niagara. We are expanding our network further east into the markets of New
York's Capital Region. This is consistent with our growth strategy, which is to
expand into new and attractive markets. Our shareholders will benefit from the
acquisition, as earnings growth will be enhanced by this transaction. Troy
Financial is a company with excellent asset quality and a loan and deposit mix
that fits with our balance sheet objectives. Customers will benefit from the
expanded range of consumer, commercial and municipal products and services of
the combined entity. We see this transaction as an excellent use of the capital
that we raised in our second step stock offering.
"Troy Financial is a community bank that has had tremendous success built on a
solid foundation of customer and community commitment. We look forward to Troy
Financial becoming part of our company."
Chairman, President and CEO of Troy Financial Corporation, Daniel J. Hogarty,
Jr., will join First Niagara Financial Group's board of directors as Vice
Chairman. Commenting on the agreement, Hogarty said, "This transaction
represents excellent value for Troy Financial's shareholders. Troy Financial has
served the Troy community and the Capital Region with dedication and pride for
180 years. I am pleased to say that we have found in First Niagara a partner who
shares our passion for outstanding customer and community service. We look
forward to joining First Niagara and working together."
First Niagara and Troy Financial have identified cost efficiencies within this
acquisition, and some management, support and administrative positions held by
Troy Financial Corporation staff will be eliminated. Those displaced will be
offered severance, opportunities to post for positions within First Niagara for
which they are qualified, and outplacement assistance.
The transaction expands First Niagara's market presence in eight counties that
it does not currently operate in including Albany, Washington, Warren, Saratoga,
Schenectady and Schoharie. Based on current market shares, the transaction also
gives First Niagara the number one deposit market share in Rensselaer County
(22.9%) and the number two share in Greene County (24.1%). The acquisition,
which has been unanimously approved by the boards of directors of First Niagara
and Troy Financial, is subject to the approval of Troy Financial Corporation's
stockholders and the approval of bank regulatory authorities, as well as other
customary conditions. The Merger Agreement provides for breakup fees if the
Agreement is terminated under certain circumstances. After completion of the
transaction, The Troy Savings Bank will be merged into First Niagara Bank, while
The Troy Commercial Bank will operate as First Niagara Commercial Bank, a
subsidiary of First Niagara Bank.
First Niagara was advised by the investment banking firm of Ryan Beck & Co. and
the law firm of Luse, Gorman, Pomerenk & Schick. Troy Financial was advised by
the investment banking firm of Keefe, Bruyette & Woods and the law firm of Hogan
& Hartson.
First Niagara Financial Group, Inc., through its wholly owned subsidiary First
Niagara Bank, has assets of $3.6 billion and deposits of $2.4 billion. First
Niagara Bank is a full-service, community-oriented bank that provides financial
services to individuals, families and businesses through 46 banking centers, a
loan production office, several financial services subsidiaries and 80 ATMs
throughout upstate New York. First Niagara's range of products includes personal
and business checking, savings, business loan and mortgage products, cash
management services, investment alternatives, lease financing and trust
services. The Company offers an expanded product line, which includes commercial
and personal insurance and investment advisory services.
Troy Financial Corporation is the bank holding company of The Troy Savings Bank
and The Troy Commercial Bank and is headquartered in Troy, NY. Founded in 1823,
Troy Savings is the oldest chartered savings bank in New York. The bank has 21
offices, 22 ATMs and is a full-service financial services organization offering
a wide variety of business and consumer banking products and services. As of
June 30, 2003, Troy Financial had assets of $1.2 billion, deposits of $925.4
million and equity of $154.6 million.
Conference Call - First Niagara will be hosting a conference call concerning the
acquisition announcement will be held at 10 a.m. Eastern Standard Time on
Monday, August 11, 2003. Interested shareholders, investors and analysts should
call (800) 946-0719 and use the Code 321728 to participate. Participants can
call as early as 9:45 a.m. and a replay will be available for seven days
following the call at (888) 203-1112. A copy of an investor handout will be
available on our website at www.fnfg.com.
Forward-Looking Statements - This news release contains certain forward-looking
statements about the proposed merger of First Niagara Financial Group, Inc. and
Troy Financial Corporation. These include statements regarding the anticipated
consummation date of the transaction, anticipated cost savings and anticipated
future results. Forward-looking statements can be identified by the fact that
they do not relate strictly to historical or current facts. They often include
words like "believe," "expect," "anticipate," "estimate" and "intend" or future
or conditional verbs such as "will," "would," "should," "could" or "may."
Certain factors that could cause actual results to differ materially from
expected results include delays in completing the merger, difficulties in
achieving cost savings or in achieving such savings within the expected time
frame, difficulties in integrating First Niagara Financial Group, Inc. and Troy
Financial Corporation, increased competitive pressures, changes in the interest
rate environment, changes in general economic conditions, legislative and
regulatory changes that adversely affect the businesses in which First Niagara
Financial Group, Inc. and Troy Financial Corporation are engaged and changes in
the securities markets.
This press release does not constitute an offer of securities. The proposed
transaction will be submitted to Troy Financial Corporation's stockholders for
their consideration. Troy Financial Corporation will file a proxy statement and
other relevant documents concerning the proposed transaction with the SEC.
Stockholders are urged to read the proxy statement when it becomes available and
any other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information.
You will be able to obtain a free copy of the proxy statement as well as other
filings containing information about First Niagara Financial Group and Troy
Financial Corporation, at the SEC's Internet site (www.sec.gov). Copies of the
proxy statement and the SEC filings that will be incorporated by reference in
the proxy statement can be obtained, without charge, by directing a request to
First Niagara Financial Group, Investor Relations, Christopher J. Thome, P.O.
Box 514, Lockport, NY 14095-0514. (716) 625-7645 or to Troy Financial
Corporation, Investor Relations, David DeLuca, 433 River Street, Troy, NY 12180,
(518) 270-3206.
Troy Financial Corporation and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the stockholders
of Troy Financial Corporation in connection with the merger. Information about
the directors and executive officers of Troy Financial Corporation and their
ownership of Troy Financial Corporation common stock is set forth in the proxy
statement, dated January 14, 2003, for Troy Financial Corporation 's 2003 annual
meeting of stockholders, as filed with the SEC on a Schedule 14A. Additional
information regarding the interests of these participants may be obtained by
reading the proxy statement regarding the proposed transaction when it becomes
available.
Officer Contacts
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William E. Swan...................... Chairman, President and CEO
Paul J. Kolkmeyer.................... Executive Vice President, COO and CFO
Christopher J. Thome................. Reporting and Investor Relations Manager
(716) 625-7645
chris.thome@fnfg.com
Leslie G. Garrity.................... Public Relations and Corporate
Communications Manager
(716) 625-7528
leslie.garrity@fnfg.com
Corporate Information
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First Niagara Financial Group, Inc. Transfer Agent and Registrar
6950 South Transit Road Mellon Investor Services, LLC
P.O. Box 514 P.O. Box 3315
Lockport, New York 14095-0514 South Hackensack, NJ 07606
Telephone (800) 201-6621 Telephone (800) 851-9677
www.fnfg.com www.melloninvestor.com