Acquisition Price Premiums vs. Expected Cost Savings

+++ Deals announced in the third quater 1997

part 1 of 5

Buyer:

1 NationsBank Corp., Charlotte, N.C.

2 Travelers Group, New York

3 First Union Corp., Charlotte, N.C.

4 Fleet Financial Group, Boston

5 Star Banc Corp., Cincinnati

6 Union Planters Corp., Memphis, Tenn.

7 Sovereign Bancorp., Wyomissing, Pa.

8 Wachovia Corp., Winston-Salem, N.C.

9 United Bankshares, Charleston, W. Va.

10 Fulton Financial Corp., Lancaster, Pa.

11 Golden State Bancorp, Glendale, Calif.

12 Western Bancorp, Laguna Niguel, Calif.

13 Hibernia Corp., New Orleans

14 Zions BanCorp., Salt Lake City

15 People's Bank, Bridgeport, Conn.

16 Regions Fin'l Corp., Birmingham, Ala.

17 WesBanco, Wheeling, W Va.

Totals for Mergers Analyzed

Average for Mergers Analyzed

Findings

part 2 of 5

InstitutDate

Target: type announced

1 Barnett Banks, Jacksonville, Fla. BHC 8/29/97

2 Salomon Inc., New York Sec. bro 9/23/97

3 Signet Banking Corp., Richmond, Va. BHC 7/21/97

4 Quick & Reilly Group, Palm Beach, Fla. Sec. bro 9/16/97

5 Great Financial Corp., Louisville, Ky. S&L 9/15/97

6 Capital Bancorp, Miami BHC 8/13/97

7 ML Bancorp, Villanova, Pa. S&L 9/18/97

8 1st United Bancorp, Boca Raton, Fla. BHC 8/7/97

9 George Mason Bankshares, Fairfax, Va. BHC 9/11/97

10 Keystone Heritage Group, Lebanon, Pa. BHC 8/15/97

11 Cenfed Financial Corp., Pasadena, CalifS&L 8/18/97

12 Santa Monica Bank, Santa Monica, Calif.Bank 7/31/97

13 ArgentBank, Thibodeaux, La. Bank 7/16/97

14 Vectra Banking Corp., Denver BHC 9/24/97

15 Norwich Financial Corp., Norwich, Conn.BHC 9/4/97

16 Palfed Inc., Aiken, S.C. S&L 9/23/97

17 Commercial Bancshares, Parkersburg, W VBHC 9/12/97

part 3 of 5

Deal pri

Value of Price Deal price

transaction to book P/ 12 to 1998 to 1999 at announ. against EPS estimate

Target: ($millions) value at an estimate

1 Barnett Bank $14,821.70 4.06 16.64 24.75 20.83

2 Salomon Inc. 9,200.00 1.92 18.09 13.87 12.55

3 Signet Banki 3,324.60 3.49 31.32 34.57 18.94

4 Quick & Reil 1,600.00 3.88 15.01 20.16 18.59

5 Great Financ 656.4 2.16 22.24 28.21 19.13

6 Capital Banc 359.2 2.23 19.52 14.8 14.1

7 ML Bancorp, 349.8 2.26 22.98 22.66 19.96

8 1st United B 221.1 4 15.3 21.53 16.18

9 George Mason 215 2.93 16.55 25.61 21.49

10 Keystone Her 210.9 3.2 18.71 20.55 18.94

11 Cenfed Finan 208.4 1.65 54.21 17.41 12.3

12 Santa Monica 198.2 2.72 23.64 20.61 17.5

13 ArgentBank, 190 2.79 15.65 24.77 22.53

14 Vectra Banki 173.9 4.24 22.71 20.27 17.94

15 Norwich Fina 164 1.96 20.37 20.28 19.23

16 Palfed Inc., 149.9 2.64 20.38 51.68 23.81

17 Commercial B 126.7 2.98 21.94 25.45 23.12

$321,667.70

2.89 22.07 23.95 18.65

Deals Dilutive

Deals Accretive

part 4 of 5

1998 1999

Deal price Effect of Deal

price

Target: estimate date per shr.

1 Barnett Bank 18.75 Dilutive Dilutive Dilutive $75.19

2 Salomon Inc. 13.07 Accretive Accretive Accretive 81.43

3 Signet Banki 17.07 Dilutive Accretive Accretive 53.59

4 Quick & Reil 17.4 Dilutive Dilutive Dilutive 40.89

5 Great Financ 17.05 Dilutive Accretive Accretive 44

6 Capital Banc 12.87 Accretive Accretive Accretive 43

7 ML Bancorp, 16.38 Accretive Accretive Accretive 27.35

8 1st United B 14.7 Dilutive Dilutive Accretive 20.88

9 George Mason 18.69 Dilutive Dilutive Dilutive 36.68

10 Keystone Her 17.21 Dilutive Dilutive Accretive 52.84

11 Cenfed Finan 11.18 Accretive Accretive Accretive 34.43

12 Santa Monica 15.91 Accretive Accretive Accretive 28

13 ArgentBank, 19.64 Dilutive Dilutive Dilutive 29.07

14 Vectra Banki 16.28 Accretive Accretive Accretive 28.17

15 Norwich Fina 16.68 Accretive Accretive Accretive 28.75

16 Palfed Inc., 20.75 Dilutive Dilutive Dilutive 27.39

17 Commercial B 21.01 Dilutive Dilutive Accretive 78.38

16.74

10 8 5

7 9 12

part 5 of 5

Deal priPremium Present Anticipated

to markepaid value of ccost svg.

2 wks.prby buyer savings % of targets

Target: to ann. (millions) (millions)non int.exp.

1 Barnett Bank 142 $4,240.80 $3,871.60 55

2 Salomon Inc. 128.9 2,333.20 4,971.90 45

3 Signet Banki 141.7 952.7 730.5 50

4 Quick & Reil 119.4 256.5 281.6 40

5 Great Financ 131.8 146.7 151.2 40

6 Capital Banc 106.2 19 161.5 30

7 ML Bancorp, 130.2 75.3 59.3 40

8 1st United B 122.8 39 20 30

9 George Mason 132.2 48.1 49.6 30

10 Keystone Her 165.1 82.4 109 35

11 Cenfed Finan 104.7 8.9 62 30

12 Santa Monica 121.7 35.4 44.3 30

13 ArgentBank, 133.7 47.8 73.3 40

14 Vectra Banki 122.5 24.8 64.6 35

15 Norwich Fina 115.4 20.9 50 35

16 Palfed Inc., 152.2 49.6 54.2 35

17 Commercial B 157.9 46.5 28.5 40

126.2

131.1 38

Net CostSaving-Banks 10 of 15

Net Cost Sang

M&A Research Analysis: James J. Gilloon. Announced deal price to book value reflects the price of the transaction divided by the book value per share of the target company for the quarter prior to announcement. Buyer P/E ratio at announcement reflects the price-earnings multiple to the latest 12 months' earnings per share that the buyer's common stock traded at when the deal was announced. Deal price to last 12 months' earnings per share reflects the price paid per share for the target (adjusted for all shares to be exchanged - common stock, convertible preferred, trust preferred certificates, warrants, options) divided by the earnings per share reported by the target over the latest 12 months. Deal price to 1998 and 1999 EPS estimate reflects the price per share paid for the target divided by the First Call estimates o1998 and, where obtainable, 1999 earnings per share for the target. Effect of transaction at announcement and against 1998 and 1999 EPS estimates reflects whether the merger is dilutive or accretive to earnings per share. Deal price to market price two weeks prior to announcement date reflects the percentage premium paid over the pre-acqusition price. Premium paid by buyer is the amount the acquiring firm pays for an acqusition that is above the pre-acquisition price of the target company. Two weeks prior to announcement is deemed appropriate and reflects the bare minimum time period for the target to analyze the offer. The difference between the present value of cost savings and the premium paid by the buyer represents the most measureable net cost savings of the merger. However, additional merger costs and revenue or expense gains may be recognized over the restructuring period. Anticipated cost savings as a percentage of target noninterest expense ranges from 30% to 55%, reflecting industry consensus estimates on a deal-by-deal basis. Generally, the higher the projected cost savings reflect in-market deals, whereby the companies currently conduct business within the same state or geographic region. In- market deals may also reflect an overlap in business product lines. Out- of-market deals reflect an acquisition of an institution in a state or geographic region where the buyer has not previously held a significant market share of deposits and lending activity. Out-of-market deals may also reflect an acquisition of a firm noted for its specialization in certain business product lines that the buyer is not materially involved with. Cost savings are not expected to realized until 1999. American Banker, 1997 ===

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