White River Capital, Inc. (AMEX: RVR) (“White River”) and First Chicago Bancorp (“First Chicago”) today announced the signing of a definitive agreement and plan of merger pursuant to which First Chicago will merge into White River. Terms of the agreement call for shareholders of First Chicago to receive one share of White River common stock for each two shares of First Chicago common stock. Subject to approval from the American Stock Exchange (“Amex”) and the U.S. Securities and Exchange Commission (“SEC”) declaring effective White River’s registration statement covering the common stock issued to First Chicago’s shareholders in the merger, the common stock issued to First Chicago shareholders will trade on the Amex. Additional terms of the merger include:
- Issuance of 6.14 million White River common shares to First Chicago shareholders, giving them 61.2% of the total shares of White River following the merger (1-for-2 exchange ratio).
- The board of directors of the surviving company will consist of nine current members of the First Chicago board, as well as Thomas C. Heagy and Daniel W. Porter from White River’s board of directors, and J. Mikesell Thomas, the former Chief Executive Officer of the Federal Home Loan Bank of Chicago. John W. Rose currently serves on the boards of directors of both companies and will remain a board member post closing.
- William J. Ruh will become Chairman and Chief Executive Officer of the combined company. John G. Eck will remain President of First Chicago Bank & Trust, the bank subsidiary of the First Chicago. William E. McKnight will remain President of Coastal Credit LLC (“Coastal Credit”), White River’s operating subsidiary.
- Coastal Credit will become a subsidiary of First Chicago Bank & Trust.
- Upon closing, White River will change its name to First Chicago Bancorp.
White River’s Chairman and Chief Executive Officer John Eggemeyer stated, “We are pleased to have reached this agreement with First Chicago. Integrating into a larger organization will support our growth objectives for Coastal Credit. Most importantly we intend that the combination will provide Coastal Credit with more permanent funding at lower cost. We are happy to present our shareholders with this opportunity to realize additional value on their investment.”
William Ruh, Chairman and Chief Executive Officer of First Chicago commented, “This unique transaction that combines our companies will provide First Chicago Bank & Trust with an opportunity to diversify its portfolio by adding a higher yield asset class managed by an exceptionally experienced and proven team. Further, this merger provides flexibility to First Chicago given the significant accretion to its tangible book value while affording our shareholders the opportunity to convert their shares to publicly registered stock. We look forward to working with the White River team to build value for all shareholders.”
Completion of the transaction is subject to certain conditions, including approvals by both White River’s and First Chicago’s shareholders and bank regulatory authorities, and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2008.
ABOUT FIRST CHICAGO
First Chicago Bancorp is a privately held bank holding company based in Itasca, Illinois. The company operates through its bank subsidiary, First Chicago Bank & Trust, with seven branches and $1.2 billion in assets. First Chicago Bank & Trust provides commercial banking services, including real estate, construction and commercial loans, primarily to individuals and small and medium-sized businesses located in the Chicagoland area.
The following is First Chicago’s unaudited condensed consolidated balance sheet as of March 31, 2008 and its unaudited condensed consolidated statement of income for the quarter ending March 31, 2008. Additional information about First Chicago is available at www.fdic.gov.
| First Chicago Bancorp | ||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET | ||||
| AS OF MARCH 31, 2008 | ||||
| ($ in 000's) | ||||
ASSETS | ||||
| Total cash and cash equivalents | $ | 13,254 | ||
| Investments: | ||||
| Securities available for sale | 108,821 | |||
| FHLB and FRB stock, at cost | 12,265 | |||
| Loans and leases | ||||
| Real Estate | ||||
| 1-4 Family | 92,182 | |||
| Multifamily | 146,628 | |||
| Construction & Development | 196,616 | |||
| Commercial | 244,406 | |||
| Commercial and industrial | 216,412 | |||
| Consumer | 2,906 | |||
| Non-Accrual | 9,756 | |||
| Total loans and leases | 908,905 | |||
| Unearned income on loans and leases | (2,566 | ) | ||
| Allowance for loan and lease losses | (10,133 | ) | ||
| Loans and leases, net | 896,206 | |||
| Premises and equipment, net | 35,235 | |||
| Intangible assets | 93,191 | |||
| Total other assets | 16,017 | |||
| Total Assets | $ | 1,174,990 | ||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||
| Liabilities | ||||
| Deposits | ||||
| Demand deposits | $ | 61,634 | ||
| NOW | 43,562 | |||
| Savings | 64,412 | |||
| Money markets | 120,178 | |||
| Time certificates | 547,528 | |||
| Total Deposits | 837,313 | |||
Federal funds purchased and securities sold under agreements to repurchase | 32,267 | |||
| Borrowings | 104,500 | |||
| Subordinated debentures | 40,774 | |||
| Accrued interest payable and other liabilities | 8,995 | |||
| Total Liabilities | 1,023,849 | |||
| Shareholders’ equity | ||||
| Common stock & paid-in capital | 142,533 | |||
| Retained earnings | 11,220 | |||
| Other equity capital components | (2,612 | ) | ||
| Total Shareholders’ Equity | 151,141 | |||
| Total Liabilities and Shareholders’ Equity | $ | 1,174,990 | ||
| First Chicago Bancorp | |||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||
| QUARTER ENDED MARCH 31, 2008 | |||||
| ( $ in 000's) | |||||
| Interest income | |||||
| Loans | $ | 15,256 | |||
| Investment securities & other | 1,507 | ||||
| Total interest income | 16,764 | ||||
| Interest expense | |||||
| Deposits | 7,628 | ||||
| Borrowings | 1,738 | ||||
| Total interest expense | 9,365 | ||||
Net interest income | 7,399 | ||||
| Provision for loan losses | 481 | ||||
| Net interest income, after provision | 6,918 | ||||
| Noninterest income | |||||
| Service Charges | 285 | ||||
| Other | 402 | ||||
| Gain (loss) on sale | 445 | ||||
| Total noninterest income | 1,132 | ||||
| Noninterest expenses | |||||
| Salaries and employee benefits | 2,431 | ||||
| Occupancy and equipment | 668 | ||||
| Amortization of intangibles | 535 | ||||
| Other | 1,642 | ||||
| Total noninterest expenses | 5,276 | ||||
| Income before income taxes | 2,774 | ||||
| Income tax expense | 1,003 | ||||
| Net Income | $ | 1,771 | |||
| Shares Outstanding, Ending (x 1,000) | 12,286 | ||||
| Average Shares Outstanding (x 1,000) | 12,279 | ||||
| Earnings Per Share (GAAP) | $ | 0.14 | |||
| Book Value Per Share | $ | 12.30 | |||
| Tangible Book Value Per Share | $ | 4.72 | |||
ABOUT WHITE RIVER, COASTAL CREDIT AND UAC
Founded in 2004, White River is the holding company for Coastal Credit LLC and Union Acceptance Company LLC.
Coastal Credit LLC is a specialized auto finance company, headquartered in Virginia Beach, Virginia, engaged in acquiring sub-prime auto receivables from both franchised and independent automobile dealers which have entered into contracts with purchasers of typically used, but some new, cars and light trucks. Coastal Credit then services the receivables it acquires. Coastal Credit commenced operations in Virginia in 1987 and conducts business in 20 states – Alaska, Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Louisiana, Maryland, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia and Washington – through its 17 branch locations. The Coastal Credit receivables portfolio, net of unearned finance charges, was $96.9 million at March 31, 2008.
Union Acceptance Company LLC is a specialized auto finance company, based in Indianapolis, Indiana, which holds and oversees its portfolio of $6.9 million in non-prime auto receivables, as of March 31, 2008.
The following is White River’s unaudited condensed consolidated balance sheet as of March 31, 2008 and its unaudited condensed consolidated statement of income for the quarter ending March 31, 2008. Additional information can be obtained from the SEC’s website at www.sec.gov or by accessing White River’s website at www.WhiteRiverCap.com.
| WHITE RIVER CAPITAL, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (Unaudited) | ||||
| (Dollars in thousands) | ||||
ASSETS | March 31, 2008 | |||
| Cash and cash equivalents | $ | 3,538 | ||
| Finance receivables—net | 86,353 | |||
| Goodwill | 34,536 | |||
| Deferred tax assets—net | 35,241 | |||
| Other assets | 1,465 | |||
| TOTAL | $ | 161,133 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| LIABILITIES: | ||||
| Line of credit | 44,000 | |||
| Accrued interest | 229 | |||
| Creditor notes payable | 784 | |||
| Other payables and accrued expenses | 1,600 | |||
| Total liabilities | 46,613 | |||
| SHAREHOLDERS’ EQUITY: | ||||
Preferred Stock, without par value, authorized 3,000,000 shares; none issued and outstanding | - | |||
Common Stock, without par value, authorized 20,000,000 shares; 3,869,333 and 3,843,087 issued and outstanding at March 31, 2008 and December 31, 2007, respectively | 180,228 | |||
Warrants, 150,000 outstanding at March 31, 2008 and December 31, 2007, respectively | 534 | |||
| Accumulated other comprehensive income, net of taxes | 2,183 | |||
| Accumulated deficit | (68,425 | ) | ||
| Total shareholders’ equity | 114,520 | |||
| TOTAL | $ | 161,133 | ||
| WHITE RIVER CAPITAL, INC. | ||||
| CONDENSED CONSOLIDATED STATEMENT OF INCOME | ||||
| (Unaudited) | ||||
| (Dollars in thousands, except per share and share amounts) | ||||
Quarter Ended | ||||
March 31, | ||||
| INTEREST: | ||||
| Interest on receivables | $ | 8,070 | ||
| Accretion and other interest | 3,565 | |||
| Total interest income | 11,635 | |||
| Interest expense | (832 | ) | ||
| Net interest margin | 10,803 | |||
| Provision for estimated credit losses | (1,197 | ) | ||
| Net interest margin after provision for estimated credit losses | 9,606 | |||
| OTHER REVENUES (EXPENSES): | ||||
| Salaries and benefits | (2,294 | ) | ||
| Third party servicing expense | (114 | ) | ||
| Other operating expenses | (1,411 | ) | ||
| Bankruptcy costs | - | |||
| Charge to Master Trust—net | - | |||
| Change in fair market valuation of creditor notes payable | (46 | ) | ||
| Gain from deficiency account sale | 159 | |||
| Other income (expense) | (34 | ) | ||
| Total other revenues (expenses) | (3,740 | ) | ||
| INCOME BEFORE INCOME TAXES | 5,866 | |||
| INCOME TAX EXPENSE | (2,142 | ) | ||
| NET INCOME | $ | 3,724 | ||
| NET INCOME PER COMMON SHARE (BASIC) | $ | 0.96 | ||
| NET INCOME PER COMMON SHARE (DILUTED) | $ | 0.94 | ||
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 3,863,507 | |||
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 3,942,503 | |||
IMPORTANT MERGER INFORMATION
White River will file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”) in connection with the proposed transaction. The registration statement will include a joint proxy statement of White River and First Chicago that also constitutes a prospectus of White River, which will be sent to the shareholders of First Chicago. We urge shareholders to read the joint proxy statement/prospectus when it becomes available because it will contain important information about White River, First Chicago and the proposed transaction. When filed, this document and other documents relating to the merger filed by White River and First Chicago can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge for accessing by accessing White River’s website at www.WhiteRiverCap.com or First Chicago’s website at www.FirstChicago.com. Alternatively, these documents, when available, can be obtained free of charge from White River upon written request to:
| White River Capital, Inc. |
| Mark R. Ruh |
| President & Chief Operating Officer |
| 1445 Brookville Way |
| Suite I |
| Indianapolis, IN 46239 |
| or by calling (317) 806-2166 x6468 |
| or from First Chicago upon written request to: |
| First Chicago Bancorp |
| J. Christopher Alstrin |
| Executive Vice President & Chief Financial Officer |
| 1145 N. Arlington Heights Road |
| Itasca, IL 60143 |
| or by calling (630) 250-9500 |
PARTICIPANTS IN THIS TRANSACTION
White River and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the proposed transaction under the rules of the SEC. Information about these participants may be found in the Definitive Proxy Statement of White River relating to its 2008 Annual Meeting of Shareholders filed with the SEC on April 4, 2008. This definitive proxy statement can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking information about White River that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Such information includes forward-looking statements above regarding the prospective effects and timing of the proposed merger of First Chicago into White River. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of White River. White River cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to potential failure to obtain shareholder or regulatory approval for the merger or to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe; the inability to realize expected cost savings or synergies from the merger in the amounts or in the timeframe anticipated; changes in the estimate of non-recurring charges; costs or difficulties relating to integration matters might be greater than expected; material adverse changes in First Chicago’s or White River’s operations or earnings; or a decline in the economy in primary market areas of the constituent companies. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, White River's results of operations before, or after giving effect to the merger, could differ materially from those expressed in, implied or projected by such forward-looking statements. White River assumes no obligation to update such forward-looking statements.
Contacts:
Mark R. Ruh, 317-806-2166 x6468
President
& Chief Operating Officer
or
First Chicago Bancorp
J.
Christopher Alstrin, 630-250-9500
Executive Vice President & Chief
Financial Officer
