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Filed by FIRSTFED AMERICA BANCORP, INC.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities and Exchange Act of 1934
Subject Company: People's Bancshares, Inc.
Commission File No.: 0-07449
On October 1, 2001, FIRSTFED AMERICA BANCORP, INC., a Delaware
Corporation, and People's Bancshares, Inc., a Massachusetts corporation, jointly
issued the following press release:
NEWS FIRSTFED
P.O. BOX 1509 FALL RIVER, MA 02722
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MEDIA RELEASE
FOR IMMEDIATE RELEASE
FIRSTFED AMERICA BANCORP, INC. TO ACQUIRE
PEOPLE'S BANCSHARES, INC.
Swansea, Massachusetts, October 1, 2001 -- FIRSTFED AMERICA BANCORP,
INC. ("FIRSTFED," AMEX: FAB), and People's Bancshares, Inc. ("People's," NASDAQ:
PBKB), New Bedford, Massachusetts, jointly announced today that they have
signed a definitive agreement pursuant to which FIRSTFED will acquire People's
for approximately $72 million in cash and stock. The transaction will increase
FIRSTFED's assets from $1.7 billion as of June 30, 2001 to approximately $2.7
billion, increase its number of banking offices from 15 to 27, and increase its
number of loan origination centers from 5 to 15.
Robert F. Stoico, Chairman, President and Chief Executive Officer of
FIRSTFED stated, "We are very pleased to announce our proposed acquisition of
People's Bancshares, Inc. This merger represents a natural extension of our
franchise and will give us the largest deposit market share among community
banks in Bristol County, Massachusetts. When combined with our on-going
expansion in Rhode Island, the transaction further solidifies FIRSTFED's
position as one of the region's premier community banks."
"We believe that this transaction is an excellent opportunity for our
shareholders and our customers," said Richard S. Straczynski, President and
Chief Executive Officer of People's. "Our commitments to maximizing shareholder
value and to preserving the community bank quality of service we have offered to
People's customers will be met by this merger. People's customers will benefit
from the addition of the extensive network of FIRSTFED offices and ATM's, and
they will have access to a greater selection of services including trust and
asset management services, as well as a full array of insurance products."
The merger is expected to be completed in the first quarter of 2002.
Upon consummation of the merger, former shareholders of People's will own
approximately 23% of FIRSTFED's outstanding shares. To the extent they receive
FIRSTFED shares, the transaction is expected to be tax-free to People's
shareholders.
FIRSTFED expects to recognize savings in the range of 20-25% of
People's consolidated expenses by the end of 2002 and also expects the merger to
be accretive to earnings per share in the first year after the merger is
completed. FIRSTFED's management team and Board of Directors will remain intact
following the merger. One member of People's board of directors will be added to
the board of directors of FIRSTFED and First Federal Savings Bank of America.
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Terms of the Merger
Under the terms of the merger agreement, People's stockholders can
elect to receive either 1.2644 shares of FIRSTFED common stock (and cash in lieu
of any fractional share) or $22.00 in cash for each share of People's common
stock they own. The elections of People's shareholders will be subject to the
requirement that 55% of People's shares be exchanged for cash and 45% be
exchanged for FIRSTFED common stock.
People's can terminate the merger agreement should FIRSTFED common
stock decline in value by more than certain percentages during a specified
measurement period, provided that FIRSTFED can require People's to proceed with
the transaction by increasing the exchange ratio to a specified level. Should
the value of FIRSTFED common stock increase by more than 20%, the value of
FIRSTFED shares to be exchanged for People's shares would be capped at $26.40.
The merger is subject to certain conditions, including the approval of
the shareholders and regulators of both companies.
In connection with the agreement, People's granted to FIRSTFED an
option to purchase up to 19.9% of People's common stock subject to certain terms
and conditions.
Pricing Summary
Price to normalized trailing 4Q earnings 11.0x
Price to 6/30/01 book value 216%
Premium to 9/28/01 People's market price 60%
Premium to 6/30/01 deposits 6.7%
Safe Harbor
This news release contains certain forward-looking statements about the
proposed merger of FIRSTFED and People's. These statements include statements
regarding the anticipated closing date of the transaction, anticipated cost
savings and anticipated future results. Forward-looking statements can be
identified by the fact that they do not relate strictly to historical or current
facts. They often include words like "believe," "expect," "anticipate,"
"estimate" and "intend" or future or conditional verbs such as "will," "would,"
"should," "could" or "may." Certain factors that could cause actual results to
differ materially from expected include delays in completing the merger,
difficulties in achieving cost savings from the merger or in achieving such cost
savings within the expected time frame, difficulties in integrating FIRSTFED and
People's, increased competitive pressures, changes in the interest rate
environment, changes in general economic conditions, legislative and regulatory
changes that adversely affect the business in which FIRSTFED and People's are
engaged, and changes in the securities markets.
FIRSTFED and People's will be filing a joint proxy statement/prospectus
and other relevant documents concerning the merger with the Securities and
Exchange Commission (SEC). WE URGE INVESTORS TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND
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ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain the documents free of charge at
the SEC's website, www.sec.gov. In addition, documents filed with the SEC by
FIRSTFED will be available free of charge from the Secretary of FIRSTFED at ONE
FIRSTFED PARK, Swansea, Massachusetts 02777, telephone (508) 679-8181. Documents
filed with the SEC by People's will be available free of charge from the
Secretary of People's at 545 Pleasant Street, New Bedford, Massachusetts 02740,
telephone (508) 991-2601. READ THE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY
BEFORE MAKING A DECISION CONCERNING THE MERGER.
FIRSTFED and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from FIRSTFED shareholders to
approve the merger. Information about the directors and executive officers of
FIRSTFED and their ownership of FIRSTFED common stock is set forth in FIRSTFED's
proxy statement as filed with the SEC on June 22, 2001.
People's and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from People's shareholders to
approve the merger. Information about the directors and executive officers of
People's and their ownership of People's common stock is set forth in People's
proxy statement as filed with the SEC on April 30, 2001.
Additional information about the interests of those participants may be
obtained from the definitive joint proxy statement/prospectus regarding the
proposed acquisition when it becomes available.
FIRSTFED is a financial services company offering a wide range of
financial products through its subsidiaries. First Federal Savings Bank of
America currently operates 15 banking offices throughout Southeastern
Massachusetts and Rhode Island as well as four loan origination centers serving
Massachusetts and Rhode Island. The Bank also operates a financial service
center serving Western Massachusetts and Connecticut and will open its sixteenth
banking office in Middletown, Rhode Island later this year. At June 30, 2001,
First Federal had total assets of $1.7 billion and total deposits of $703
million. Online banking is available through FIRSTFEDonline at
www.firstfedamerica.com. Through FIRSTFED INSURANCE AGENCY, LLC, which is
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licensed in Massachusetts, Rhode Island and Connecticut, the Company also sells
insurance products at all of its locations and via www.firstfedinsurance.com.
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FIRSTFED TRUST COMPANY, N.A. offers comprehensive trust, estate, and investment
management products and services. Visit the FIRSTFED Web site at
www.firstfedamerica.com for additional information on the Company including
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previous press releases and historical financial data.
People's is the holding company for People's Savings Bank of Brockton.
People's Mortgage Corporation is a subsidiary of People's Savings Bank. People's
Savings Bank currently operates 12 banking locations in Southeastern
Massachusetts and People's Mortgage operates out of 10 loan production offices
in Massachusetts, Connecticut, Maryland and Virginia. At June 30, 2001, People's
had total assets of $926.3 million and total deposits of $579.0 million.
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For further information contact:
Robert F. Stoico Edward A. Hjerpe, III
Chairman, President and CEO Executive Vice President, COO and CFO
FIRSTFED AMERICA BANCORP, INC. FIRSTFED AMERICA BANCORP, INC.
(508) 679-8181 (508) 679-8181
Richard S. Straczynski James K. Hunt
President and CEO Chief Financial Officer
People's Bancshares, Inc. People's Bancshares, Inc.
(508) 991-2601 (508) 991-2601
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