WATERBURY, Conn.--(BUSINESS WIRE)--Dec. 21, 1999--Webster
Financial Corporation (Nasdaq: WBST), the holding company for Webster
Bank, and MECH Financial, Inc. (Nasdaq: MECH), the holding company for
Mechanics Savings Bank, today jointly announced that each company's
Board of Directors has voted to amend their previously announced
merger agreement to allow Webster to account for the transaction under
the purchase accounting method.
``The MECH and Webster boards believe that the current market
environment makes a purchase accounting structure advantageous for
shareholders of both companies, as the purchase accounting method will
enable us to repurchase Webster shares at attractive prices, effective
immediately,'' said James C. Smith, Webster chairman and chief
executive officer.
Webster intends to account for the MECH transaction using the
purchase method of accounting and Webster's Board has authorized the
repurchase of up to five million of its common shares specifically for
reissuance in this transaction.
The acquisition, which is structured as a tax-free, stock-for
stock exchange, was valued at $210 million at the original Dec. 2
announcement date, when it was structured as a pooling of interests.
The other terms of the agreement, by which Mechanics shareholders
receive 1.52 shares of Webster common stock for each share of
Mechanics, remain unchanged.
Mechanics Savings Bank is a state-chartered, Hartford-based
savings bank with $1.1 billion in assets and 16 branch offices in the
capital region. Mechanics branch offices are located in Avon,
Bloomfield, East Hartford, Glastonbury, Hartford, Manchester, New
Britain, Wethersfield, West Hartford and Windsor.
The amended merger agreement is subject to approval by regulatory
authorities and Mechanics shareholders. Webster expects the
transaction to close in the second quarter of 2000.
With the addition of Mechanics, the recently completed merger of
New England Community Bancorp, and the previously announced agreements
to purchase FleetBoston and Chase Manhattan branches, Webster will
rank as the fifth largest New England based bank.
Pro forma for pending merger and branch purchase activity,
Webster Bank has $11 billion in assets and operates through a network
of more than 125 banking offices, and 200 ATMs, in addition to
telephone, video, Web and PC banking.
Webster is also a leading, full-service commercial and mortgage
lender in Connecticut. Webster Trust, the bank's trust and investment
management subsidiary, is one of the leading bank trust companies
based in Connecticut. Webster's insurance subsidiary, Damman Insurance
Associates, is one of the largest agencies in the state.
Webster's Nowlending subsidiary found at www.nowlending.com on
the Worldwide Web, originates low-cost mortgages over the Internet for
customers across the United States.
For more information on Webster visit www.websterbank.com.
Statements in this press release regarding Webster Financial
Corporation's business that are not historical facts are ``forward
looking statements'' that involve risks and uncertainties. For a
discussion of such risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statement, see ``Forward Looking Statements'' in the Company's Annual
Report for the most recently ended fiscal year.
Contact:
Media: Mike Bazinet
203/578-2391
mbazinet@websterbank.com
or
Jim Kalach
203/578-2461
jkalach@websterbank.com
or
Investors:
James Sitro, 203/578-2399
jsitro@websterbank.com
or
Mechanics Savings Bank:
Edgar C. Gerwig
860/241-2838