FOR IMMEDIATE RELEASE:
CONTACT: Marty E. Adams
President & Chief Operating Officer
Sky Financial Group, Inc.
Thomas J. O'Shane
Chairman, President & Chief Executive Officer
First Western Bancorp, Inc.
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
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
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.