WATERBURY, Conn.--(BUSINESS WIRE)--Oct. 7, 2003--
Note: Conference call at 10:00 a.m. today, October 7; call
information provided within this release.
Webster Financial Corporation (NYSE:WBS), the holding company for
Webster Bank, today announced that it has reached a definitive
agreement to acquire FIRSTFED AMERICA BANCORP, INC. (AMEX:FAB),
headquartered in Swansea, Massachusetts, the holding company for First
Federal Savings Bank of America. The agreement is a combination cash
and stock transaction valued at approximately $465 million, or $24.50
per common share of FIRSTFED stock, payable 60% in Webster stock and
40% in cash.
Upon completion of the acquisition, FIRSTFED shareholders will be
entitled to receive either 0.5954 shares of Webster common stock or
$24.50 in cash for each share of FIRSTFED common stock, subject to
proration.
The combined bank would rank as the 46th largest in the United
States, with $16 billion in assets, market capitalization of $2.2
billion and a 141-branch retail footprint in Connecticut,
Massachusetts and Rhode Island.
"Our partnership with FIRSTFED is a union with people we know well
and trust, and whose strategic goals are highly compatible with our
own," said James C. Smith, Webster chairman and chief executive
officer. "Together, Webster and FIRSTFED create a powerful franchise
stretching across Southern New England from lower Fairfield County
through Connecticut and Rhode Island to southeastern Massachusetts.
The merger opens new opportunities and establishes a platform for
future growth in the region."
FIRSTFED AMERICA BANCORP is a federally chartered savings and loan
holding company with $2.7 billion in assets at June 30, 2003 and 26
branches, 19 in Massachusetts and 7 in Rhode Island.
The purchase price is 2.08 times FIRSTFED's book value and
represents a premium of 22.4 per cent to deposits, excluding jumbo
certificates of deposit. The acquisition is expected to contribute
positively to Webster's earnings per share immediately, excluding
one-time merger-related costs in 2004.
FIRSTFED and Webster will merge operations, and existing FIRSTFED
branches will be renamed as branches of Webster Bank. Both companies
have similar structures with extensive consumer, mortgage and
commercial banking operations, and both also have insurance agencies
and trust companies. Webster intends to retain the existing FIRSTFED
branch locations and all customer service personnel.
Robert F. Stoico, FIRSTFED chairman, president and chief executive
officer, will be Webster's chairman and chief executive officer for
the Massachusetts and Rhode Island region, and he will join the board
of directors of Webster Financial Corporation and Webster Bank.
FIRSTFED executive vice president, chief operating officer and chief
financial officer Edward A. Hjerpe III, will serve as president and
chief operating officer of the Massachusetts and Rhode Island region.
FIRSTFED Chairman Stoico said, "In considering strategic
alternatives, our board of directors placed great value on the
compatibility of Webster's strategy and culture and on leadership that
will enable us to compete effectively as a regional financial services
company. This partnership is excellent news for our shareholders,
customers and the communities FIRSTFED serves."
In connection with the merger, Webster plans to deleverage its
balance sheet by up to $1.5 billion through a combination of
investment portfolio reduction, loan sales or securitization. The
deleveraging will improve the combined company's funding mix and
accelerate Webster's transition to a commercial bank.
Excluding estimated one-time merger-related costs of $3.1 million,
but including the impact of balance sheet restructuring, Webster
expects its 2004 diluted GAAP earnings per share will reflect
approximately 1.0% accretion, including anticipated cost savings. For
2005, the first full year of combined operations, Webster expects the
transaction to be 1.4% accretive to its diluted GAAP earnings per
share. Webster has identified over $9 million of revenue enhancement
opportunities, but has not factored them into its projections.
The definitive agreement, which was unanimously approved by
FIRSTFED's board of directors, is subject to approval by regulatory
authorities and FIRSTFED's shareholders. Webster expects the
transaction to close in the first quarter of 2004.
Lehman Brothers Inc. served as financial advisor to Webster and
Keefe, Bruyette & Woods, Inc. and Sandler O'Neill & Partners, L.P.
served as financial advisors to FIRSTFED.
Conference Call
Webster and FIRSTFED will have a conference call regarding this
announcement at 10:00 a.m. Eastern time today, Tuesday, October 7. The
conference call may be heard through Webster's investor relations
website, www.wbst.com, or in listen-only mode by calling
1-877-679-9054 (access code 287192). A copy of the investor
presentation for this conference call also will be available at
www.wbst.com. The call will be archived on the website and be
available for future retrieval, and it will also be available by
telephone replay for one week at 1-800-615-3210 (access code 287192).
Webster Financial Corporation is the holding company for Webster
Bank and Webster Insurance. With $14 billion in assets, Webster Bank
provides business and consumer banking, mortgage, insurance, trust and
investment services through 110 banking offices, 220 ATMs, a
Connecticut-based call center and the Internet. Webster Financial
Corporation is majority owner of Chicago-based Duff & Phelps, LLC, a
leader in financial advisory services. Webster Bank owns the
asset-based lending firm, Whitehall Business Credit Corporation, the
insurance premium finance company, Budget Installment Corp., Center
Capital Corporation, an equipment finance company headquartered in
Farmington, Connecticut and Webster Trust Company, N.A.
Forward-Looking Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
regarding the benefits of the FIRSTFED acquisition, including future
business opportunities and financial results, and the companies'
intentions with respect to the combined company. These forward-looking
statements are based upon current beliefs and expectations and are
subject to business, economic and other uncertainties and
contingencies, many of which are beyond our control. Actual results
may differ materially from the anticipated results as a result of
various factors, including among others: (1) the failure to
successfully integrate the two companies' businesses, or to integrate
them in a timely manner; (2) the failure to achieve anticipated cost
savings, or to achieve such savings in a timely manner; (3) costs,
customer loss and business disruption in connection with the
acquisition or the integration of our companies may be greater than
expected; (4) failure to obtain governmental approvals without adverse
regulatory conditions; (5) risks associated with the proposed balance
sheet deleveraging; (6) difficulties associated with achieving
expected future financial results; and (7) failure of the FIRSTFED
stockholders to approve the acquisition. Additional factors that could
cause actual results to differ materially from those expressed in the
forward-looking statements, including those relating to the businesses
of Webster and FIRSTFED generally, are discussed in Webster's and
FIRSTFED's reports filed with the SEC (accessible on the SEC website
at http://www.sec.gov, on Webster's website at
http://websteronline.com and on FIRSTFED's website at
http://www.firstfedamerica.com). Webster and FIRSTFED do not undertake
any obligation to update any forward-looking statements to reflect
changes in beliefs, expectations or events.
The proposed transaction will be submitted to FIRSTFED's
stockholders for their consideration. Webster and FIRSTFED will file
with the SEC a registration statement, a proxy statement/prospectus
and other relevant documents concerning the proposed transaction with
the SEC. Stockholders of FIRSTFED are urged to read the registration
statement and the proxy statement/prospectus 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/prospectus, as well as other filings containing
information about Webster and FIRSTFED, at the SEC's Internet site
(http://www.sec.gov). Copies of the proxy statement/prospectus and the
SEC filings that will be incorporated by reference in the proxy
statement/prospectus can be obtained, without charge, by directing a
request to Terrence K. Mangan, Senior Vice President/Investor
Relations, Webster Financial Corporation, Webster Plaza, Waterbury, CT
06702 (203) 578-2318 or to Edward A. Hjerpe, Chief Operating Officer
and Chief Financial Officer, FIRSTFED AMERICA BANCORP, INC., ONE
FIRSTFED PARK, Swansea, MA 02777 (508) 679-8181.
FIRSTFED and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the stockholders
of FIRSTFED in connection with the merger. Information about the
directors and executive officers of FIRSTFED and their ownership of
FIRSTFED common stock is set forth in the proxy statement, dated June
26, 2003, for FIRSTFED's 2003 annual meeting of stockholders, as filed
with the SEC on a Schedule 14A. Additional information regarding the
interests of such participants may be obtained by reading the proxy
statement/prospectus when it becomes available.
CONTACT: Webster
Media
Clark Finley, 203-578-2429
cfinley@websterbank.com
or
Investors
Terry Mangan, 203-578-2318
tmangan@websterbank.com
or
FIRSTFED
Philip Campbell, 508-235-1361
pgcampbe@firstfedamerica.com
SOURCE: Webster Financial Corporation