Exhibit 99.1
FOR IMMEDIATE RELEASE:
CONTACT: Marty E. Adams
President & Chief Operating Officer
Sky Financial Group, Inc.
(419) 327-6300
Thomas J. O'Shane
Chairman, President & Chief Executive Officer
First Western Bancorp, Inc.
(724) 652-8550
SKY FINANCIAL GROUP, INC.
AGREES TO ACQUIRE
FIRST WESTERN BANCORP, INC.
DECEMBER 14, 1998 ( BOWLING GREEN, OHIO; NASDAQ: SKYF) Sky Financial Group,
Inc. announced today the execution of a definitive agreement to acquire First
Western Bancorp, Inc., a $2.2 billion bank holding company headquartered in New
Castle, Pennsylvania. (NASDAQ: FWBI) The acquisition, which is expected to be
completed in the third quarter of 1999, will create a $7 billion financial
services organization, with market capitalization of $1.8 billion, making Sky
Financial the 54th largest bank in the United States in terms of market
capitalization. Upon completion of the acquisition, the combined company will
have total assets of approximately $7.0 billion, total deposits of
approximately $5.3 billion, stockholders' equity of approximately $535 million,
and will conduct its banking business through 210 banking centers throughout
Ohio, Western Pennsylvania, West Virginia and Michigan.
Under the terms of the agreement, First Western shareholders will receive 1.211
shares of Sky Financial common stock for each share of First Western common
stock in a tax-free exchange. Based upon Sky Financial's average closing price
of $31.45 for the week ended December 11, 1998, the transaction represents an
exchange value of $38.09 for each common share of First Western and an
aggregate transaction value of $434 million.
First Western Bank, N.A. will be merged into The Citizens Banking Company to
create a $4 billion commercial bank serving Eastern Ohio, Western Pennsylvania,
and Northern West Virginia. Marty
E. Adams, President & COO, of Sky Financial Group stated, "First Western is a
premier banking franchise in Western Pennsylvania, and we are extremely pleased
to have them join Sky Financial Group. The partnership among our two companies
complements our existing market area, and will enable us to realize important
synergies in our retail, commercial and fee-based businesses."
Thomas O'Shane, Chairman and Chief Executive Officer of First Western, stated,
"We are extremely excited to become part of the Sky Financial family. Over the
years, our two franchises have worked together on commercial loans and have
exchanged many management and banking ideas. Therefore, we know each other very
well. I am confident that the First Western customers, employees, and
shareholders will benefit tremendously by this affiliation with one of the
truly exceptional regional banking franchises in the Midwest."
The merger, which is to be accounted for as a pooling-of-interest, is expected
to be accretive to earning per share by approximately 2% in the first full year
of operations . The merger is expected to result in an annual pre-tax cost
savings of at least $11 million, representing 22% of First Western's expense
base, through the elimination of redundant systems and excess capacity,
improved branch efficiencies and increased alternative delivery channels for
financial products and services. A pre-tax merger related charge of
approximately $60 million will be recognized in the quarter in which the merger
is completed. First Western has issued an option in favor of Sky Financial to
purchase up to 19.9% of outstanding shares of First Western, at an exercise
price of $28.50 per share, which is exercisable upon the occurrence of certain
events.
David R. Francisco, Chairman and CEO, of Sky Financial Group commented, " We
have made great progress in integrating the fine institutions that comprise Sky
Financial Group and we are well prepared to take on this important, in-market
transaction. The acquisition terms meet all of our established acquisition
criteria. We have used conservative assumptions and the acquisition will
benefit our shareholders in the first full year of operations. We are also
enthusiastic about welcoming First Western's employees to Sky Financial, where
one of our core values is the creation of an exceptional environment for our
people."
Sky Financial Group, Inc. is a diversified financial services holding company
headquartered in Bowling Green, Ohio. The Company's banking affiliates include
Mid American National Bank and Trust Company, Toledo, Ohio; The Citizens
Banking Company, Salineville, Ohio; and The Ohio
Bank, Findlay, Ohio. The Company's financial services affiliates include Mid Am
Recovery Services, Inc., Clearwater, Florida; MFI Investments Corp., Bryan,
Ohio; Mid Am Credit Corp., Columbus, Ohio; Mid Am Private Trust, N.A.,
Cincinnati, Ohio; Mid Am Financial Services, Inc., Carmel, Indiana; Simplicity
Mortgage Consultants, Marion, Indiana; Mid Am Title Insurance Agency, Inc.,
Adrian, Michigan; Sky Technology Resources, Inc., Bowling Green, Ohio;
ValueNet, Inc., Lisbon, Ohio; Freedom Financial Life Insurance Company,
Phoenix, Arizona; and Freedom Express, Inc., Salineville, Ohio.
*****
The information contained in this press release contains
forward-looking statements regarding expected future financial performance
which are not historical facts and which involve risks and uncertainties.
Actual results and performance could differ materially from those contemplated
by these forward-looking statements.
-end-
Exhibit 99.2
[Logo] Sky Financial Group
ACQUISITION OF
FIRST WESTERN BANCORP, INC.
Sky Financial Group, Inc.
December 14, 1998
[Logo] Sky Financial Group
FORWARD LOOKING
INFORMATION
This presentation contains certain estimates and projections of future operating
results regarding both Sky Financial Group, Inc. and First Western Bancorp, Inc.
on a stand-alone basis and a pro forma combined basis following the merger,
including estimates of financial condition and operating efficiencies on a
combined basis, and certain merger-related charges expected to be incurred in
connection with the transaction. These estimates constitute forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995) which involve significant risks and uncertainties. Actual results may
differ materially from the results discussed in these forward looking
statements. Factors that might cause such a difference include, but are not
limited to: (1) expected cost savings from the Merger cannot be fully realized
or realized within the expected time frame; (2) revenues following the Merger
are lower than expected; (3) competitive pressures among depository institutions
increase significantly; (4) costs or difficulties related to the integration of
the business of Sky Financial Group, Inc. and First Western Bancorp, Inc. are
greater than expected; (5) changes in the interest rate environment reduce
interest margins; (6) general economic conditions, either national or in the
states in which the combined company will be doing business are less favorable
than expected; and (7) legislation or regulatory changes adversely affect the
businesses in which the combined company would be engaged.
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SKY FINANCIAL GROUP, INC.
1998 IN REVIEW
- May 21, 1998 announcement of Citizens Bancshares, Inc. and Mid Am,
Inc. Merger-of-Equals
- October 2, 1998 merger completed and "Sky Financial Group, Inc."
formed
- December 4, 1998 Sky Financial Group, Inc. completed acquisition of
The Ohio Bank (a)
- Cost Savings of $22 million or 12% of combined non-interest expense on
track for full run rate in 1999
- Immediately accretive to earnings per share and meets high performing
bank criteria
- December 14, 1998 SkyFinancial Group, Inc. announcement of First
Western Bancorp, Inc. acquisition
(a) All data for SKYF included in this presentation includes The Ohio Bank.
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TRANSACTION
SUMMARY
TERMS
- Fixed exchange ratio of 1.211 shares of Sky Financial for each First
Western share
- Termination right triggered by SKYF's stock price falling below $25.00
and underperforming a peer index by 10%
- 19.9% stock option granted to SKYF
STRUCTURE
- Pooling of interests
- Tax-free exchange
- Definitive agreement signed
TIMING
- Subject to normal regulatory and shareholder approvals
- Expected to close Third Quarter, 1999
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[Logo] Sky Financial Group
TRANSACTION
SUMMARY
Indicated Transaction Value ................$425 million (a)
Per FWBI Share .............................$37.24 (a)
SKYF Shares Issued .........................13.5 million (fixed exchange ratio)
Pro Forma SKYF Shares Outstanding ..........59 million
Pro Forma Market Capitalization ............$1.8 billion
Percent Ownership ..........................Sky Financial Group, Inc.: 77%
First Western Bancorp, Inc.: 23%
SKYF Board Representation ..................Two First Western directors will
join SKYF's board
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(a) Based on SKYF closing market price of $30.75 as of December 11, 1998
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[Logo] Sky Financial Group
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DEAL
PRICING
----------
SKYF/FWBI Recent Bank SKYF
Merger (a) Mergers (b) Stand-alone
---------- ----------- -----------
Price to LTM EPS 22.0X 23.4X Not Meaningful
Price to Book Value 280% 300% 358%
Price to Tangible Book Value 480% 340% 391%
Price to Est. 2000
Net Income Synergies 14.1X Not Applicable 15.3X (c)
(a) Based on SKYF closing market price of $30.75 as of December 11, 1998
(b) Recently announced bank sellers with assets between $1 billion and $5
billion
(c) Based on management's estimate of $2.01 per share for SKYF on a stand alone
basis
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STRATEGIC
RATIONALE
- Continuation of a theme
- Sky and its predecessors have completed 22 acquisitions since 1990
- In-market transaction
- Consolidate into Citizens Banking Company
- Acquisition terms meet Sky Financial's established acquisition
criteria and commitment to financial discipline
- Based on conservative assumptions, benefits shareholders in first full
year of operation
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STRATEGIC
RATIONALE
Creates strong #2 position in the Eastern markets of Sky Financial Group
[Map]
o Denotes Sky Financial Group, Inc.
[] Denotes First Western Bancorp
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STRATEGIC
RATIONALE
FINANCIAL PROJECTIONS ARE CONSERVATIVE:
- Cost saving assumptions are 22% of non-interest expense - very
supportable based on similar in-market transactions
- Cost savings have been identified
- Immediately accretive without revenue enhancements
- However, FWBI has a low loan-to-asset ratio and other balance
sheet restructuring opportunities
- Strong capitalization and asset quality
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[Logo] Sky Financial Group
DEAL
ECONOMICS
- In-market transaction with $11 million of estimated cost savings
or 22% of FWBI'S non-interest expense. (1/3 realized in 1999 and
2/3 in 2000)
- Immediately accretive to earnings on cost savings alone
- One time pretax charge of $60 million
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COST
SAVINGS
-------------
Savings
as a %
Estimated of Expense Category
2000 -------------------
(In Millions) Savings FWBI Combined
------------------------------------------------------------------------
Salaries & Benefits $ 6.5 30% 6%
Occupancy & Equipment 1.0 15% 3%
Other 3.5 18% 5%
---------
TOTAL $11.0 22% 5%
After tax $ 7.2
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MERGER RELATED
CHARGES
(In Millions)
------------------------------------------------
Transaction Costs $ 6.0
Conversion Costs 2.5
Employee-Related Costs 9.0
Occupancy/Equipment Writedowns 4.5
Credit Quality/Reserve Adjustments 4.0
Balance Sheet Restructuring
& Other 34.0
------
Gross Charges $60.0
Taxes 19.0
------
NET MERGER RELATED CHARGES $41.0
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[Logo] Sky Financial Group
PRO FORMA
SKY FINANCIAL GROUP, INC.
(In Millions) BALANCE SHEET DATA (a)
-------------------------------------------------------------
Pro Forma
SKYF FWBI Combined
---- ---- --------
Assets $4.8 $2.2 $7.0
Loans 3.3 1.1 4.4
Deposits 3.8 1.5 5.3
Equity to Assets 8.13% 6.72% 7.68%
Leverage Ratio 7.50% 4.03% 6.42%
Reserve to Loans 1.36% 1.67% 1.44%
Reserve to NPLs 369% 1,164% 461%
(a) As of September 30, 1998, includes Ohio Bank
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[Logo] Sky Financial Group
PRO FORMA
SKY FINANCIAL GROUP, INC.
INCOME DATA
----------------------------------------------------------------
Pro Forma
SKYF (a) FWBI (a) Combined (b)
-------- -------- ------------
ROAA 1.40% .93% 1.65%
ROAE 17.25% 12.72% 20.00%
Net Interest Margin 4.34% 3.35% 4.00%
Efficiency Ratio 62.03% 59.33% 53.00%
(a) Estimated 1998 core results
(b) Assumes cost savings and 2000 projections
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[Logo] Sky Financial Group
PRO FORMA
SKY FINANCIAL GROUP, INC.
- $7.0 billion assets
- Seventh largest in Ohio
- 64th in country
- $1.8 billion market capitalization
- 54th in country
- 212 banking offices in OH, MI, PA, and WV
- Three bank charters
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FINAL
SUMMARY
- Continuation of theme and discipline
- Conservative assumptions
- Immediately accretive on cost savings alone
- Attractively priced
- Proven integration plan
- High performing bank mission
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