Filed by Webster Financial Corporation
(Commission File No. 1-31486)
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: FIRSTFED AMERICA BANCORP, INC.
(Commission File No. 1-12305)
The following is from an investor presentation that took place on
October 7, 2003 in connection with the proposed acquisition by Webster Financial
Corporation of FIRSTFED AMERICA BANCORP, INC.:
[WEBSTER FINANCIAL [FIRSTFED LOGO]
CORPORATION LOGO] FIRST FED AMERICA BANCORP, INC.
We Find a Way
A POWERFUL FORCE IN SOUTHERN
NEW ENGLAND
OCTOBER 7, 2003
Forward Looking Statements
This presentation 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 about (i) the benefits of
the merger between Webster Financial Corporation ("Webster" or "WBS") and
FIRSTFED AMERICA BANCORP, INC. ("FIRSTFED" or "FAB"), including future financial
and operating results, cost savings and accretion to reported earnings that may
be realized from the merger; (ii) Webster's and FIRSTFED's plans, objectives,
expectations and intentions and other statements contained in this presentation
that are not historical facts; and (iii) other statements identified by words
such as "expects," "anticipates, ""intends," "plans," "believes," "seeks,"
"estimates" or words of similar meaning. These forward-looking statements are
based upon the current beliefs and expectations of Webster's and FIRSTFED's
management and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change. Actual results may differ materially from the anticipated
results discussed in these forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the businesses of Webster and FIRSTFED may not
be combined successfully, or such combination may take longer to accomplish than
expected; (2) the cost savings from the merger may not be fully realized or may
take longer to realize than expected; (3) operating costs, customer loss and
business disruption following the merger, including adverse effects on
relationships with employees, may be greater than expected; (4) governmental
approvals of the merger may not be obtained, or adverse regulatory conditions
may be imposed in connection with governmental approvals of the merger; (5) the
stockholders of FIRSTFED may fail to approve the merger; (6) adverse
governmental or regulatory policies may be enacted; (7) the interest rate
environment may further compress margins and adversely affect net interest
income; (8) the risks associated with continued diversification of assets and
adverse changes to credit quality; (9) the risks associated with a proposed
balance sheet deleveraging; (10) difficulties associated with achieving expected
future financial results; (11) competition from other financial services
companies in Webster's and FIRSTFED's markets; (12) the risk of an economic
slowdown that would adversely affect credit quality and loan originations.
Additional factors that could cause actual results to differ materially from
those expressed in the forward-looking statements are discussed in Webster's and
FIRSTFED's reports (such as Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K) filed with the Securities and
Exchange Commission and available at the SEC's Internet site
(http://lwww,sec.gov). All subsequent written and oral forward looking
statements concerning the proposed transaction or other matters attributable to
Webster or FIRSTFED or any person acting on their behalf are expressly qualified
in their entirety by the cautionary statements above. Except as required by law,
Webster and FIRSTFED do not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date the forward-looking statement is made.
2
[Webster Logo] [FirstFed Logo]
Additional Information
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.
3
[Webster Logo] [FirstFed Logo]
A Powerful Force in Southern New
England
The combination of Webster and FIRSTFED creates:
- 46th largest bank in the United States with $16 billion in assets (1)
- $2.2 billion in market capitalization (2)
- 141-branch retail footprint in Connecticut, Massachusetts and Rhode
Island
- Full retail and commercial banking product offering
1. Pro forma at June 30, 2003, adjusted for planned balance sheet
deleveraging.
2. Market data as of October 3, 2003.
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[Webster Logo] [FirstFed Logo]
Summary of Significant Terms
Value per FIRSTFED Share: $24.50 per share
Transaction Value: $456.5 million (1)
Consideration: 60% stock / 40% cash
Exchange Ratio: Fixed at 0.5954 Webster shares for each
FIRSTFED share (2)
Transaction Structure: Tax-free exchange with election mechanism
Estimated Cost Savings: Approximately 25% of FIRSTFED's expenses
Merger-Related Costs: Capitalized after-tax restructuring
charge of $30.6 million and one-time
after-tax merger related expenses of
$3.1 million
Balance Sheet Deleveraging: Up to $1.5 billion through a combination
of investment portfolio reduction and/or
loan sales/securitization
Revenue Enhancement: $9.5 million identified, none assumed
1. Includes cash out of options and net of Webster's holding of 328,800
shares of FIRSTFED.
2. Based on WBS closing share price of $41.15 on October 3, 2003.
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[Webster Logo] [FirstFed Logo]
Summary of Significant Terms
Due Diligence: Completed
Management Representation: Robert Stoico, Chairman and CEO of MA
and RI Region Ed Hjerpe, President and
COO of MA and RI Region
Board Representation: Robert Stoico to be added to Webster
Financial Corporation and Webster Bank
Boards
Walk-Away: Limited price-based walkaway, subject
to top-up right (1)
Termination Fee: $17 million
Required Approvals: FIRSTFED shareholders
Customary regulatory approvals
Expected Closing: First quarter of 2004
1. FIRSTFED has the right of termination if the value of Webster stock
declines by 20% and underperforms a peer index by 20%, unless Webster
determines to adjust consideration.
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[Webster Logo] [FirstFed Logo]
Transaction Pricing and
Comparables
Comparable Transactions (1)
---------------------------
WBS / FAB Northeast Nationwide
--------- --------- ----------
Premium to Market: 7.9% (2) 17.5% 26.1%
Price I LTM Reported EPS: 16.4x 19.8x 19.9x
Price / 2003E EPS: (3) 18.7x 18.2x 19.8x
Price / Book Value: (4) 2.08x 2.30x 2.16x
Price / Tangible Book Value: (4) 2.83x 2.45x 2.40x
Core Deposit Premium: (5) 22.4% 23.9% 20.4%
1. Thrift acquisitions announced since January 1, 2002 with deal value between
$l00 million and $1 billion. Numbers represent average values. Source of
information for comparable transactions is SNL Financial.
2. Based on FIRSTFED's closing stock price of $22.70 on October 3, 2003.
3. 2003 calendar year estimate is IBES mean earnings estimate. For comparable
transactions, represents current year earnings multiple at the time of
transaction announcement.
4. Based on stated book value and intangible assets as of June 30, 2003.
5. Core deposits exclude all CDs greater than $100,000.
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[Webster Logo] [FirstFed Logo]
FIRSTFED At-a-Glance
FIRSTFED's operations and culture are an excellent strategic fit with Webster
- $2.68 billion in assets
- $1.38 billion in loans
Attractive Commercial - $1.53 billion in deposits (63.5% transaction
and Community and savings)
Banking Franchise - 24% of FIRSTFED's loans are commercial & industrial
- Recently developed trust company and an insurance
agency
- 26 branches in Bristol, Plymouth and Norfolk counties
in Massachusetts and Providence, Kent and Newport
counties in Rhode Island
Market Position - a FIRSTFED ranks #3 in Bristol County, MA in terms of
total deposits
- #12 in Boston MSA and #8 in Providence MSA
- ROAA: 1.01%
- ROAE: 12.86%
Solid Profitability - NPAs/Assets: 0.08%
and Asset Quality - Reserves/NPLs: 10.2 times
- NCOs/Avg. Loans: 0.02%
Note: Data as of or for the quarter ended June 30, 2003.
8
[Webster Logo] [FirstFed Logo]
Strategic Rationale
- Natural extension of Webster's franchise into adjacent
market areas of Massachusetts and Rhode Island
FranchiseEnhancing - Creates a powerful regional financial
services provider
- Consistent with Webster's long-term strategic plan of
pursuing in-market and adjacent market acquisitions
- Attractive bank-like loan and deposit mix
- Like Webster, FIRSTFED is transitioning to a bank-like
business mix
Similar Strategy - FIRSTFED's market demographics compare favorably with
and Markets those of Webster
- FIRSTFED's markets are the types of communities in
which Webster has had success
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[Webster Logo] [FirstFed Logo]
Strategic Rationale
- 1.4%, or 6 cents, accretion to GAAP EPS in 2005
Attractive Financial - 1.7%, or 7 cents, accretion to cash EPS in 2005
Results - Webster has a track record of exceeding initial
projections
- FIRSTFED has solid fundamentals and a low-risk balance
sheet
Low-risk - FIRSTFED is a "clean" institution with similar
Transaction business lines
- Webster has demonstrated success in executing and
integrating
comparable transactions
10
[Webster Logo] [FirstFed Logo]
Expanding Webster's Successful Community
Banking Franchise into MA and RI
[Map of Massachusetts and Rhode Island with surround towns
indicating Webster Bank and FIRSTFED franchises]
11
[Webster Logo] [FirstFed Logo]
FIRSTFED Market Positions
RANK DEPOSITS BRANCHES SHARE
Bristol, MA 3 $987.7 14 14.6 %
Plymouth, MA 14 140.3 4 2.6
Providence, RI 5 130.2 4 1.3
Kent, RI 8 33.4 1 1.5
Norfolk, MA 44 32.7 1 0.2
Newport, RI 6 1.8 1 0.2
--------------------------------------------------------------------------------
Boston MSA 12 $1,160.6 19 1.0 %
Providence MSA 8 163.6 5 1.1
Source: SNL Financial. Data as of June 30, 2002. Excludes institutional
deposits. Deposits in millions.
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[Webster Logo] [FirstFed Logo]
Financial Overview
SIGNIFICANT OPPORTUNITIES TO IMPROVE NET INTEREST MARGIN, OPERATING EFFICIENCY
AND FEE INCOME GENERATION
($ IN MILLIONS)
WEBSTER FIRSTFED
------- --------
BALANCE SHEET ITEMS
------------------------------------
Assets $14,453 $2,681
Net Loans 8,591 1,379
Deposits 8,086 1,529
Equity 1,099 199
Core Deposits/
Total Deposits (1) 67.6 % 63.5 %
INCOME STATEMENT ITEMS
--------------------------------------
ROAA 1.15 % 1.01 %
ROAE 15.0 12.9
Net Interest Margin 3.10 2.60
Efficiency Ratio 58.7 62.2
Fee Income/Revenue (2) 31.2 11.6
FINANCIAL DATA AS OF OR FOR THE QUARTER ENDED JUNE 30, 2003.
1. CORE DEPOSITS EXCLUDE ALL TIME DEPOSITS.
2. FEE INCOME AND REVENUE EXCLUDE SECURITIES GAINS AND GAINS ON SALES OF
LOANS AND LOAN SERVICING.
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[Webster Logo] [FirstFed Logo]
Significant Fee Income
Opportunities
- The FIRSTFED franchise offers significant fee income growth potential:
FIRSTFED WEBSTER
Fee Income / Revenue (1) 12% 31%
Fee Income / Employee (1) $2,758 $16,709
- Provides significant fee growth opportunities from the addition of
Webster's broad product array:
- High Performance Checking - Asset based lending
- Consumers
- Small businesses - Equipment finance
- Commercial business lending - Investment products
- Small business lending - Wealth Management/Trust
- Insurance brokerage - Cash management
1. FEE INCOME AND REVENUE EXCLUDE SECURITIES GAINS AND GAINS ON SALES OF
LOANS AND LOAN SERVICING. DATA FOR THE QUARTER ENDED JUNE 30, 2003.
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[Webster Logo] [FirstFed Logo]
Similar, Diverse Loan Mix
AT JUNE 30, 2003
($ in millions)
WEBSTER FIRSTFED COMBINED
LOANS % LOANS % LOANS %
Commerdal & Industrial $2,010 23.1 $340 24.3% $2,350 23.2%
Commercial Real Estate 1,144 13.1 158 11.3 1,302 12.9
Residential Real Estate 3,542 40.7 698 49.9 4,240 41.9
Consumer 2,013 23.1 203 14.5 2,216 21.9
-------------- --------------- ---------------
TOTAL LOANS $8,710 100.0% $1,398 100.0% $10,108 100.0%
Less: Loan Loss Reserve (119) (19) (139)
------- ------- --------
NET LOANS $8,591 $1,379 $9,970
------- ------- --------
------- ------- --------
NOTE: COMBINED NUMBERS DO NOT REFLECT PURCHASE ACCOUNTING ADJUSTMENTS.
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[Webster Logo] [FirstFed Logo]
Attractive Funding Base
At or for the quarter ended June 30, 2003
($ in millions)
WEBSTER FIRSTFED COMBINED
--------------- -------------- ----------------
DEPOSITS % DEPOSITS % DEPOSITS %
--------------------------------------------------------------------------------
Checking and NOW $2,100 26.0% $656 42.9% $2,756 28.7%
Savings and MMDA5 3,366 41.6 314 20.6 3,679 38.3
Certificates of Deposit 2,526 31.2 559 36.5 3,085 32.0
Treasury Deposits 94 1.2 - - 94 1.0
----------------- -------------- ------------------
TOTAL DEPOSITS $8,086 100.0% $1,529 100.0% $9,614 100.0%
----------------- -------------- ------------------
----------------- -------------- ------------------
NOTE: COMBINED NUMBERS DO NOT REFLECT PURCHASE ACCOUNTING ADJUSTMENTS.
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[Webster Logo] [FirstFed Logo]
Strong Asset Quality
AT OR FOR THE QUARTER ENDED JUNE 30, 2003
WEBSTER FIRSTFED COMBINED
------- -------- --------
Non-Performing Assets/Total Assets 0.39% 0.08% 0.35%
Non-Performing Assets/Total Loans 0.65 0.15 0.59
Reserves/Total Loans 1.37 1.39 1.37
Reserves/Non-Performing Loans 228 1,015 256
Net Charge-Offs/Average Loans 0.20 0.02 0.17
NOTE: COMBINED NUMBERS DO NOT REFLECT PURCHASE ACCOUNTING ADJUSTMENTS.
17
[Webster Logo] [FirstFed Logo]
People's Mortgage Corp. ("PMC")
- Retail mortgage originator and wholly-owned subsidiary of FIRSTFED
- Conducts business through 9 loan origination centers
- 3 in Massachusetts, 1 in Rhode Island, 1 in Connecticut, 4 in
Maryland
- Originated approximately $3 billion of mortgage loans in the
twelve-month period ended June 30, 2003
- Street earnings estimates for FIRSTFED in 2004 reflect analyst
expectations that national mortgage origination volume and FIRSTFED
mortgage origination volume will decrease significantiy
- Webster expects PMC's earnings will account for less than 2% of
Webster's pro forma combined earnings in 2004 and beyond, and less
than 7% of FIRSTFED's estimated pro forma earnings
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[Webster Logo] [FirstFed Logo]
Pro Forma Impact - Assumptions
- Webster's earnings based on IBES mean 2004 EPS estimate grown at 8%
per annum.
- FIRSTFED's earnings based on IBES mean 2004 EPS estimate grown at 8%
per annum. Earnings have been adjusted to reflect elimination of $1.5
million in annual after-tax CDI amortization expense.
- Assumes cost savings equivalent to 25% of FIRSTFED's expense base
taking into account 5% annual expense growth. Cost savings phased in
75% in 2004 and 100% thereafter.
- Assumes $1.5 billion of balance sheet deleveraging through a
combination of investment portfolio reduction and/or loan
sales/securitization at a cost of approximately $4.9 million to
pre-tax earnings.
- Assumes a 4.5% pre-tax opportunity cost of cash.
- Core deposit intangible equivalent to 3% of FIRSTFED's core deposits
amortized straight-line over 7 years.
- Zero revenue enhancements assumed.
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[Webster Logo] [FirstFed Logo]
GAAP and Cash EPS Impact
PROJECTION FOR CALENDAR YEAR
--------------------------------------------
2004 (1) 2005
---------------- ----------------
Current GAAP EPS Estimate $3.77 $4.07(2)
Pro Forma GAAP EPS 3.81 4.13
GAAP ACCRETION TO WEBSTER ($) $0.04 $0.06
GAAP ACCRETION TO WEBSTER (%) 1.0% 1.4%
Stand-Alone Cash EPS Estimate $4.00 $4.31
Pro Forma Cash EPS 4.06 4.38
CASH ACCRETION TO WEBSTER ($) $0.06 $0.07
CASH ACCRETION TO WEBSTER (%) 1.4% 1.7%
1. ASSUMES MERGER CONSUMMATION AT 3/31/2004. INCLUDING ONE-TIME MERGER RELATED
COSTS IN 2004 OF $3.1 MILLION AFTER-TAX, TRANSACTION IS DILUTIVE TO GAAP
EPS BY $0.03 OR 0.7% AND CASH EPS BY $0.01 OR 0.2%.
2. BASED ON 2004 IBES MEAN EPS ESTIMATE GROWN AT 8%.
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[Webster Logo] [FirstFed Logo]
Pro Forma Impact - Earnings
(in millions)
PROJECTIONS FOR CALENDAR YEAR
-------------------------------------------
2004(1) 2005
-------------- ----------------
Webster Earnings $171.0 $184.6
FIRSTFED Earnings 17.8 25.5
Anticipated Cost Savings 9.0 12.6
Net Cash Opportunity Cost (5.3) (6.8)
Impact of Balance Sheet
Deleveraging (2.3) (3.2)
CDI Amortization Expense (2.1) (2.8)
Net Accretion of Fair Value
Adjustments 1.8 2.4
-------- ---------
PRO FORMA NET INCOME $189.9 $212.3
Intangible Amortization Expense 12.7 13.3
-------- ---------
PRO FORMA CASH NET INCOME $202.6 $225.6
1. Assumes merger consummation at 3/31/2004. Excludes one-time merger
related costs in 2004 of $3.1 million after-tax.
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[Webster Logo] [FirstFed Logo]
Realistic and Achievable Cost
Savings
($ in millions)
FIRSTFED
Projected for
Sources of Cost Savings CY 2005 (1)
----------------------------------------- --------------
Salaries and Benefits $13.7
Professional Fees, Facilities and Other 5.2
------
TOTAL COST SAVINGS (PRE-TAX) $18.9
TOTAL COST SAVINGS (AFTER-TAX) $12.6
PERCENT OF FIRSTFED 2005 EXPENSE (1) 24.6%
IMPLIED EFFICIENCY RATIO FOR FIRSTFED (2) 48.4%
1. Assumes 5% annual expense growth from quarter end June 30, 2003 reported
numbers.
2. Based on FIRSTFED 2Q CY2003 annualized non-interest expense of $68.1
million before amortization of intangible assets and 2Q CY2003 annualized
net revenue of $106.2 million before provision for loan losses and gain on
sale of securities.
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[Webster Logo] [FirstFed Logo]
Rapid Capital Generation
PRO FORMA FOR THE TRANSACTION, CAPITAL LEVELS REMAIN COMFORTABLY ABOVE
REGULATORY "WELL CAPITALIZED" REQUIREMENTS AND STRENGTHEN CONSIDERABLY BY THE
END OF 2004
Webster Standalone at Pro Forma Transaction at Pro Forma Transaction
6/30/03 (1) 3/31/04 (close) at 12/31/04
[bar graph] [bar graph] [bar graph]
Note: Dotted line area represents excess over regulatory "well capitalized"
requirements.
1. Adjusted for the issuance of S75 million of trust preferred securities on
September 18, 2003 and pending acquisition of North American Bank and Trust
Company.
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[Webster Logo] [FirstFed Logo]
Proven Merger Integration
Experience
- Webster is strong operationally and a highly experienced acquiror
- Webster has successfully integrated over 20 depository and finance
company transactions since the early 1990's
- Realistic expense saving targets and no revenue enhancements assumed
- Earnings estimates for FIRSTFED are conservative
- Similar organizations - strong asset quality, similar balance sheet
composition and market demographics
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[Webster Logo] [FirstFed Logo]
Merger Integration Track Record
(IN MILLIONS)
ASSETS ACQUIRED/ DEPOSITS ACQUIRED
BANK/FINANCE ASSETS WBS ASSETS AT DEPOSITS /WBS DEPOSITS
YEAR COMPANY ACQUIRED ANNOUNCEMENT ACQUIRED AT ANNOUNCEMENT
---- -------------------- --------- ------------ --------- ----------------
1991 SuffIeld Bank $301.4 42.9% $264.1 46.3%
1992 First Constitution
Bank 1,300.3 47.7 1,222.7 166.9
1993 Bristol Savings Bank 504.3 23.9 478.2 28.7
1994 Shoreline Bank & Trust 51.0 1.9 47.4 2.2
1995 Shelton Bancorp 295.0 10.6 271.4 12.5
1995 Shawmut Branch Purchase 807.0 26.6 850.0 39.4
1996 DS Bancor, Inc. 1,257.4 32.8 1,031.0 33.2
1997 People's Savings
Financial 482.4 12.3 358.1 11.6
1997 Sachem Trust
Company N.A. 300.0 4.9 NA NA
1997 Eagle Financial Corp. 2,013.4 29.6 1,385.4 32.5
1998 Maritime Bank & Trust 103.7 1.1 91.2 1.6
1998 Village Bancorp, Inc. 234.3 2.6 215.6 3.8
1999 New England Community 786.9 8.9 635.0 11.5
1999 Chase Manhattan Bank
branches NA NA 165.0 3.0
1999 FleetBoston branches NA NA 138.0 2.5
1999 MECH Financial, Inc. 1,097.2 12.2 664.7 11.9
2001 Center Capital Corp. 260.0 2.3 NM NM
2002 IBJ Whitehall 500.0 4.1 NM NM
2003 Budget Installment
Corp. NA NA NM NM
2003 North American Bank 192.0 1.3 147.9 1.9
2003 FirstFed $2,680.5 18.5% $1,528.5 18.9%
SOURCE: SNL FINANCIAL. INCLUDES BANK AND FINANCE COMPANY ACQUISITIONS ONLY.
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[Webster Logo] [FirstFed Logo]
Summary
- Creates a powerful force in southern New England
- FIRSTFED possesses strong fundamentals
- Great strategic fit that enhances franchise
- Consistent with Webster's strategy of pursuing in-market or
adjacent-market acquisitions of high quality companies
- Solid earnings accretion with achievable cost savings projections
- Significant fee income opportunities identified
- Balance sheet deleveraging significantly improves funding mix,
accelerating transformation to a commercial bank
- Webster has a proven track record of integrating acquisitions
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[Webster Logo] [FirstFed Logo]
Appendix
FIRSTFED Market Positions
Bristol, MA
Rank Institution Branches Deposits Market Share
--------------------------------------------------------------------------------
1 FleetBoston Financal Corp. (MA) 29 $1,179.4 17.37
2 Seacoast Financial Services (MA)
3 FIRSTFED AMERICA BANCORP 14 1,129.7 16.64
4 Beacon Bankcorp (MA) 9 547.7 8.07
5 Royal Bank of Scotland Group 15 450.5 6.64
6 Sovereign Bancorp Inc. (PA) 11 388.3 5.72
7 Narragansett Financial Corp. (MA) 7 378.2 5.57
8 Slade's Ferry Bancorp (MA) 11 343.9 5.07
9 Fall River Five Cents Svgs Bk (MA) 8 340.7 5.02
10 North Easton Savings Bank (MA) 7 310.3 4.57
Plymouth, MA
Rank Institution Branches Deposits Market Share
--------------------------------------------------------------------------------
1 Independent Bank Corp. (MA) 31 $1,176.3 21.42%
2 Royal Bank of Scotland Group 14 79.3 14.45
3 Plymouth Bancorp Inc. (MA) 11 592.4 10.79
4 Abington Bancorp Inc. (MA) 9 463.2 8.43
5 FleetBoston Financial Corp. (MA) 113 339.2 6.18
6 Seacoast Financial Services (MA) 8 258.2 4.70
7 Hingham Instit. for Savings (MA) 4 209.9 3.82
8 Campello Bancorp (MA) 4 183.5 3.34
9 Sovereign Bancorp Inc. (PA) 8 176.8 3.22
10 Bridgewater Savings Bank (MA) 4 169.9 3.09
14 FIRSTFED AMERICA BANCORP 4 140.30 2.55
Newport, RI
Rank Institution Branches Deposits Market Share
--------------------------------------------------------------------------------
1. Bank of Nweport (RI) 7 $475.3 48.80%
2 Royal Bank of Scotland Group 5 189.0 19.40
3 FleetBoston Financial Corp. (MA) 4 111.8 11.48
4 Sovereign Bancorp Inc. (PA) 2 109.3 11.22
5 Newport FSB (RI) 2 86.9 8.92
6 FIRSTFED AMERICA BANCORP 1 1.8 0.18
Kent, RI
Rank Institution Branches Deposits Market Share
--------------------------------------------------------------------------------
1 Royal Bank of Scotland Group 12 $903.5 40.18%
2 Centreville Savings Bank (RI) 4 468.7 20.85
3 FleetBoston Financial Corp. (MA) 5 246.6 10.97
4 Sovereign Bancorp Inc. (PA) 3 243.9 10.85
5 Bancorp Rhode Island Inc. (RI) 4 144.0 6.40
6 Home Loan Financial Corp. (RI) 2 113.3 5.04
7 MetLife Inc. (NY) 1 83.4 3.71
8 FIRSTFED AMERICA BANCORP 1 33.4 1.49
9 Massachusetts State Carpenters (MA) 1 7.4 0.33
10 Sargent Investors Inc. (RI) 1 4.2 0.19
Norfolk, MA
Rank Institution Branches Deposits Market Share
--------------------------------------------------------------------------------
1 FleetBoston Financial Corp. (MA) 35 $3,255.3 23.45%
2 Royal Bank of Scotland Group 30 2,544.5 18.33
3 Sovereign Bancorp Inc. (PA) 17 705.8 5.09
4 Dedham Institution for Savings (MA) 9 704.3 5.07
5 Brookline Bancorp Inc. (MA) 5 632.6 4.56
6 South Shore Savings Bank (MA) 10 581.7 4.19
7 Eastern Bank Corporation (MA) 7 404.7 2.92
8 Bank of Canton (The)(MA) 3 360.5 2.60
9 Benjamin Franklin Bancorp MHC (MA) 6 336.4 2.42
10 Seacoast Financial Serices (MA) 5 323.3 2.33
44 FIRSTFED AMERICA BANCORP 1 32.7 0.24
Providence, RI
Rank Institution Branches Deposits Market Share
--------------------------------------------------------------------------------
1 Royal Bank of Scotland Group 48 $4,793.2 47.63%
2 FleetBoston Financial Corp. (MA) 34 2,847.8 28.30
3 Sovereign Bankcorp Inc. (PA) 21 1,306.4 12.98
4 Bancorp Rhode Island Inc. (RI) 9 557.2 5.54
5 FIRSTFED AMERICA BANCORP 4 130.2 1.29
6 Sargent Investors Inc. (RI) 1 129.3 1.28
7 Washington Trust Bancorp (RI) 2 121.2 1.20
8 Home Loan Financial Corp. (RI) 1 89.6 0.89
9 Milford FS&LA (MA) 1 42.8 0.43
10 Centreville Savings Bank (RI) 1 14.5 0.14
Source: SNL Financial. Deposit data as of June 30, 2002. Deposits in millions.
Excludes institutional deposits.
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[Webster Logo] [FirstFed Logo]
FIRSTFED Historical Financial
Performance
($ in millions)
Fiscal Year Ended March 31, Qtr Ended June 30,
-------------------------------- --------------------
Balance Sheet Items 2001 2002 2003 2002 2003
------------------- ---------- ---------- --------- ------------ --------
Assets $l.67l $2,294 $2,414 $2,408 $2,68l
Securities 552 723 718 895 777
Loans, net 977 1,126 1,241 1,131 1,379
MSRs 6 5 5 6 5
Deposits 707 1,317 1,427 1,323 1,529
Borrowings 815 755 712 841 873
Tang. Shareholders'
Equity 110 100 139 110 146
Profitability
--------------------
Core Income $9.2 $135 $23.0 $4.4 $6.3
Core ROAA 0.78 % 0.70 % 0.95 % 0.78 % 1.01 %
Core ROAE 11.8 9.7 13.0 11.8 12.9
NIM 2.66 2.27 262 2.66 2.60
Efficiency Ratio NA 59.5 61.5 68.5 62.2
Fee Income/Operating
Revenue 19.4 20.5 13.8 15.0 11.6
Asset Quality
---------------------
NCOs / Avg. Loans 0.02 % 0.04 % 0.04 % 0.04 % 0.02 %
NPAs/Assets 0.09 0.31 0.14 0.12 0.08
Reserves / Loans 1.34 1.68 1.53 1.67 1.40
NPLs / Loans 0.13 0.32 0.26 0.23 0.14
Reservess/PLs 993.47 519.4 585.0 718.6 NM
Capital Adequacy
and Other
---------------------
Tang. Equity/Tang.
Assets 6.61 % 4.45 % 591 % 4.69% 5.57 %
Leverage Ratio 6.27 5.72 6.08 5.51 5.66
Total Risk Based
Capital Ratio 13.58 10.36 11.02 11.18 10.58
Borrowings/Assets 48.8 32.9 29.5 34.9 32.6
Loans Serviced for
Others $l,53l $l,588 $1,412 $l,582 1,292
MSRs/Loans Serviced
for Others 0.39 % 0.31 % 0.35 % 0.40 % 0.40 %
Source: SNL Financial and Company reports.
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Estimated Deal Costs
($ IN MILLIONS)
COST
----
Employee-Related Costs $24.6
Contract Termination Costs 11.8
Transaction Costs 6.4
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TOTAL RESTRUCTURING CHARGE (PRE-TAX) $42.8
Taxes (1) (12.2)
------
TOTAL RESTRUCTURING CHARGE (AFTER-TAX) $30.6
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1. Assumes 85% of total restructuring charge is tax deductible.
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