Press Release Announcing Agreement and Plan of Merger Between PSB Bancorp, Inc. and Jade Financial Corp.

Contract Categories: Mergers & Acquisitions › Merger Agreements
Summary

PSB Bancorp, Inc. and Jade Financial Corp. have entered into a definitive merger agreement under which PSB will acquire Jade and its subsidiary, IGA Federal Savings Bank, in a cash transaction valued at about $24.1 million. Jade shareholders will receive $13.55 per share, with the Jade ESOP receiving either cash, PSB stock, or both. The merger is subject to regulatory and shareholder approval. The transaction aims to expand PSB's market presence and will be accounted for as a purchase. PSB will also repurchase its own shares to fund the ESOP exchange.

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EX-2.2 3 0003.txt EXHIBIT 2.2 PRESS RELEASE Contact: Anthony DiSandro President and CEO PSB Bancorp, Inc. 215 ###-###-#### Conference Call: Thursday, November 3, 2000, 11:00 a.m. E.S.T. Call-in Number: 1 ###-###-#### Pass code: 98314 Replay (available until 11/7/00):1 ###-###-#### PSB Bancorp, Inc. Announces Agreement to Acquire Jade Financial Corp. PSB Bancorp, Inc. (NASDAQ/NMS: PSBI) and Jade Financial Corp. (NASDAQ/NMS: IGAF) announced today the execution of a definitive Agreement & Plan of Merger pursuant to which PSB will acquire Jade Financial Corp. and its wholly-owned subsidiary, IGA Federal Savings Bank in a cash transaction valued at approximately $24.1 million. Pursuant to the Agreement, PSB will purchase 100% of the outstanding shares of Jade Financial Corp. that PSB does not already own for $13.55 per share. All Jade shareholders, except its Employee Stock Ownership Plan ("ESOP"), will receive cash consideration. The Jade ESOP may receive cash, PSB stock or a combination of both. PSB will purchase its own shares in open market and privately-negotiated transactions in order to provide shares for the Jade ESOP. In connection with the transaction, Jade's wholly-owned subsidiary IGA Federal Savings Bank will merge with and into PSB's wholly-owned subsidiary, First Penn with the commercial bank charter of First Penn Bank surviving the merger. The Agreement is subject to regulatory approval and the approval of Jade Financial Corp.'s shareholders. Anthony DiSandro, President and CEO of PSB, stated: "We are delighted with this acquisition which represents a significant step in our commitment to profitably expand our franchise. The acquisition will be immediately accretive to our earnings per share, will diversify our loan portfolio and bolster our core deposit base and will provide the customers of the combined company with an increased number of products and services. The acquisition will also expand our market presence in the northern suburbs of Philadelphia." John J. O'Connell, Chairman of Jade Financial Corp. stated: "We are very pleased with our affiliation with the growth oriented, community based organization like PSB Bancorp, Inc. We believe that this merger is in the best interests of our shareholders, depositors, customers and employees of our bank." The transaction will be accounted for as a purchase for financial reporting purposes. Repurchase of PSB Stock As mentioned earlier, PSB intends to commence a share repurchase program for the purposes of funding the exchange of shares for Jade's ESOP. Based on current market pricing, PSB estimates that approximately 400,000 shares will be purchased in open market and privately-negotiated transactions. These shares may be reissued to the ESOP upon closing of the transaction. If PSB is unable to purchase enough shares for Jade's ESOP, the ESOP would receive cash for its shares and PSB would retire the repurchased shares. Extension of Option Agreement PSB and Lawrence Seidman have extended the term of the option agreement between the PSB and Mr. Seidman until December 31, 2000. The option agreement was signed on May 30, 2000 and was scheduled to expire on October 31, 2000. The agreement, as revised, gives PSB an option to purchase for $13.55 per share the 103,950 shares of Jade owned by Mr. Seidman. PSB Third Quarter Earnings and Financial Condition PSB today reported third quarter net income of $350,000, or $0.07 per share on a diluted basis. Net income for the nine months ended September 30, 2000 was $1.7 million, or $0.35 per share on a diluted basis. At September 30, 2000, PSB had total assets of $266.4 million, total deposits of $175.4 million, and shareholders' equity of $37.4 million. PSB is headquartered in Philadelphia and has seven offices in the Philadelphia metropolitan region. Jade Third Quarter Earnings and Financial Condition Jade today reported third quarter net income of $289,000, or $0.17 per share on a diluted basis. Net income for the nine months ended September 30, 2000 was $741,000, or $0.43 per share on a diluted basis. At September 30, 2000, Jade had total assets of $214.9 million, deposits of $187.1 million, and shareholders' equity of $27.7 million. Jade is headquartered in the Philadelphia suburb of Feasterville, PA and has five offices in the Philadelphia metropolitan region. Attachments 1. PSB Bancorp, Inc. September 30, 2000 Financial Highlights 2. Jade Financial Corp. September 30, 2000 Financial Highlights PSB BANCORP, INC BALANCE SHEETS (In thousands, except per share data) September 30, December 31, 2000 1999 (unaudited) (audited) ASSETS Cash and due from banks $ 5,185 $ 7,921 Interest bearing deposits with banks 7,887 9,354 Investment securities - available- for-sale, at fair value 23,934 22,685 Mortgage-backed securities available-for-sale, at fair value 42,843 45,951 Mortgage-backed securities held- to-maturity (fair value of $943 and $1,032) 943 1,006 Investment securities held-to- maturity (fair value of $3,836 and $3,779) 4,000 4,000 BankZip.Com ($1,250) and Other Investments 3,000 3,750 Loans, less allowance for loan losses of $1,349 and $1,231, respectively 160,820 167,787 Loans held for sale 7,927 8,221 Property acquired through loan foreclosure actions, net 1,169 1,047 Premises and equipment, net 1,817 1,692 Accrued interest receivable 2,551 2,446 Prepaid corporate taxes 773 784 Deferred tax asset 2,426 1,459 Other assets 1,123 1,505 TOTAL ASSETS $266,398 $279,608 LIABILITIES Deposits Non-interest bearing 16,301 14,720 Interest bearing 159,090 178,490 175,391 193,210 Borrowed Funds 38,000 34,000 Securities purchased under agreements to resell 13,385 15,640 Income taxes payable 695 45 Accrued interest payable 646 515 Other liabilities 887 151 Total liabilities 228,959 243,561 SHAREHOLDERS' EQUITY Common stock-authorized, 17,999,500 shares no par value issued and outstanding, 4,455,007 0 0 Treasury Stock (489) 0 Additional paid-in capital 40,829 40,873 Employee stock ownership plan (1,239) (1,359) Accumulated deficit 717 (1,136) Accumulated other comprehensive income (loss)(1) (2,379) (2,331) Total shareholders' equity 37,439 36,047 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $266,398 $279,608 (1) PSB has established a reserve of 50% of its investment in BankZip.com due to a recent restructuring of BankZip.com's operations and modification of BankZip's business model. PSB BANCORP, INC STATEMENTS OF OPERATIONS (In thousands, except per share data) Three months ended 9/30/00 9/30/99 (unaudited) (unaudited) INTEREST INCOME Loans, including fees $3,878 $3,421 Investment securities 1,183 1,207 Deposits with banks 65 138 Total interest income 5,126 4,766 INTEREST EXPENSE Interest on deposits 1,937 2,120 Interest on borrowings 765 185 Interest - other 0 0 Total interest expense 2,702 2,305 Net interest income 2,424 2,461 PROVISION FOR LOAN LOSSES 0 0 Net interest income after provision for loan losses 2,424 2,461 NON-INTEREST INCOME 144 302 NON-INTEREST EXPENSES Salaries and employee benefits 1,063 893 Occupancy and equipment 303 323 Other operating 677 652 Total non-interest expenses 2,043 1,868 Income before income taxes 525 895 INCOME TAXES 175 104 NET INCOME $ 350 $ 791 Net income per common share Basic $ .08 $ .17 Diluted .07 .14 PSB BANCORP, INC STATEMENTS OF OPERATIONS (In thousands, except per share data) Nine months ended 9/30/00 9/30/99 (unaudited) (unaudited) $11,111 $11,111 INTEREST INCOME Loans, including fees $12,019 $ 9,551 Investment securities 3,672 2,919 Deposits with banks 108 798 Total interest income 15,799 13,268 INTEREST EXPENSE Interest on deposits 5,859 6,236 Interest on borrowings 1,917 301 Interest - other 0 0 Total interest expense 7,776 6,537 Net interest income 8,023 6,731 PROVISION FOR LOAN LOSSES 100 - Net interest income after provision for loan losses 7,923 6,731 NON-INTEREST INCOME 468 866 NON-INTEREST EXPENSE Salaries and employee benefits 3,218 2,611 Occupancy and equipment 867 936 Other operating 1,961 1,912 Total non-interest expense 6,046 5,459 Income before income taxes 2,345 2,138 INCOME TAXES 650 221 NET INCOME $ 1,695 $ 1,917 Net income per common share Basic $ .39 $ .42 Diluted .35 .33 JADE FINANCIAL CORP. Consolidated Statement of Financial Condition ASSETS September 30, December 31, 2000 1999 (In Thousands) (Unaudited) (Audited) Cash and cash equivalents: Cash and due from banks $ 11,856 $ 6,630 Interest bearing deposits in other financial institutions 350 47 Federal Funds 4,527 6,565 Restricted cash 0 0 Total cash and cash equivalents $ 16,733 $ 13,242 Investment securities, available-for-sale 40,543 40,783 Mortgage-backed securities available-for-sale 7,745 8,859 Investment securities held-to- maturity 0 0 Mortgage-backed securities held-to-maturity 3,117 4,314 (fair value of $3,038 and $4,209) BankZip.Com (subordinate debenture) 1,250 2,500 Loans receivable, net 127,275 114,081 Property, equipment and leasehold improvements, net of accumulated depreciation 2,647 1,890 Federal Home Loan Bank stock, at cost 1,000 834 Accrued interest receivable 1,176 802 Other Real Estate Owned (OREO) 0 0 Reorganization costs, net 132 162 Bank Owned Life Insurance - BOLI 10,420 10,021 Deferred tax asset, net 1,525 1,177 Prepaid expenses and other assets 1,313 911 TOTAL ASSETS $214,876 $199,576 ======== ======== LIABILITIES AND EQUITY LIABILITIES: Deposits $165,937 $156,124 Advances from FHLBank 20,000 15,000 Advances from borrowers for taxes 468 618 Accounts payable and accrued expenses 777 594 Total liabilities $187,182 $172,336 EQUITY: Common Stock, $.01 par value, 1,872,923 shares 19 19 issued and outstanding at 9/30/00 Additional Paid-in Capital 14,173 14,130 Contra Equity - unearned common stock acquired (957) (1,044) by the Employee Stock Ownership Plan Commitments and contingencies 0 0 Retained Earnings 16,628 15,853 Accumulated other comprehensive income (loss) (1) (2,169) (1,718) Total Equity $ 27,694 $ 27,240 TOTAL LIABILITIES AND EQUITY $214,876 $199,576 ======== ======== (1) Jade has established a reserve of 50% of its investment in BankZip.com due to a recent restructuring of BankZip.com's operations and modification of BankZip.com's business model.
JADE FINANCIAL CORP. CONSOLIDATED STATEMENT OF INCOME Three months ended Nine months ended September 30, September 30, 2000 1999 2000 1999 (Unaudited) (Unaudited) (In thousands) (In thousands) INTEREST INCOME: Interest on loans $2,670 $2,253 $ 7,547 $6,595 Investment and mortgage -backed securities 838 840 2,568 2,247 Interest -earning deposits 27 17 51 72 Federal Funds 102 27 280 210 Total interest income $3,637 $3,137 $10,446 $9,124 INTEREST EXPENSE: Interest on deposits $1,510 $1,308 $ 4,291 $3,950 Interest on borrowed funds 343 56 737 59 Total interest expense $1,853 $1,364 $ 5,028 $4,009 Net Interest Income $1,784 $1,773 $ 5,418 $5,115 PROVISION FOR POSSIBLE LOAN LOSSES 135 135 565 405 Net interest income after provision for possible $1,649 $1,638 $ 4,853 $4,710 loan losses NON INTEREST INCOME: Loan fees $ 8 $ 10 $ 32 $ 36 Service charges 144 133 409 355 Other Income 337 142 1,006 387 Security gains or losses 12 0 (88) 0 Total noninterest income $ 501 $ 285 $ 1,359 $ 778 NON INTEREST EXPENSES: Compensation and employee benefits $ 916 $ 732 $ 2,744 $2,194 Office and occupancy costs 420 477 1,204 1,309 Printing and Postage 68 60 196 188 Loan servicing 46 44 122 126 Professional fees 116 30 304 114 Bank and MAC charges 179 190 514 545 Advertising, marketing and promotions 29 36 126 111 Insurance Expense 29 30 96 85 Other - Foundation Expense 0 0 0 0 Total noninterest expenses $1,803 $1,599 $5,306 $4,672 INCOME BEFORE PROVISION FOR INCOME TAXES $ 347 $ 324 $ 906 $ 816 Provision for federal and state income taxes Current 58 145 281 317 Deferred 0 (30) (116) (32) Total income tax provision $ 58 $ 115 $ 165 $ 285 NET INCOME $ 289 $ 209 $ 741 $ 531 ====== ====== ===== ======
Earnings per share Three Months Ended September 30, 2000 Net Income $ 289,000 Weighted average number of common shares outstanding 1,872,923 Average ESOP shares not committed to be released (130,500) Weighted average number of common shares outstanding for basic earnings per share computation purposes 1,742,423 Dilutive effects of employee stock options 0 Weighted average shares and common share equivalents 1,742,423 Basic earnings per share $ 0.17 Diluted earnings per share $ 0.17