Cullen/Frost and Summit Bancshares Announce Merger Agreement
03 July 2006 - 11:58PM
PR Newswire (US)
SAN ANTONIO and FORT WORTH, Texas, July 3 /PRNewswire-FirstCall/ --
Cullen/Frost Bankers, Inc. (NYSE:CFR) and Summit Bancshares, Inc.
(NASDAQ:SBIT) announced today that they have signed a definitive
agreement that provides for the merger of Summit into Cullen/Frost.
The announcement was made jointly by Dick Evans, chairman and CEO
of Cullen/Frost Bankers, Inc., and Philip E. Norwood, chairman,
president and CEO of Summit Bancshares, Inc. The agreement has been
approved by the boards of directors of both companies. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030109/CFRLOGO ) This in
market merger has many strategic benefits for the shareholders of
both Cullen/Frost and Summit. It significantly expands
Cullen/Frost's presence in the dynamic Tarrant County market in a
manner that is immediately accretive to Cullen/Frost shareholders.
The expansion will increase Cullen/Frost's deposits in Tarrant
County by approximately two-thirds and its loans in Tarrant County
by almost sixty percent. It will make the Tarrant County market
Cullen/Frost's largest lending market and second largest deposit
market. In addition, given the strong cultural affinity and shared
values between the two companies, senior management has agreed to
remain with Cullen/Frost to take advantage of the additional
products and services that can be delivered to the Summit customer
base. Philip Norwood will be president of the Tarrant County
region. Under the terms of the agreement, Summit shareholders will
have the right, subject to proration, to elect to receive cash or
Cullen/Frost common stock, in either case having a value equal to
$11.50 plus .2933 Cullen/Frost shares. Based on the price of
Cullen/Frost's shares at the close of business Friday, June 30,
2006, the transaction value is $363.5 million or $28.31 per fully
diluted Summit share. The total consideration consists of
approximately $143.4 million in cash and approximately 3.84 million
Cullen/Frost shares assuming the treasury stock method of
accounting for options before giving effect to any exercises in
outstanding options. The transaction is expected to be accretive to
Cullen/Frost's GAAP earnings per share beginning in 2007. Directors
of Summit, who hold in the aggregate approximately 15 percent of
the fully diluted outstanding shares, have agreed to vote in favor
of the merger. The merger is expected to be consummated in the
fourth quarter of 2006. Dick Evans, chairman and CEO of
Cullen/Frost said, "I am delighted we have reached an agreement to
merge with Summit Bank. It is a superior transaction for our
shareholders and theirs. The relationship between our two
organizations has always been one of mutual admiration and respect.
Frost and Summit share a common philosophy of community-oriented
banking with a superior level of customer service. Joining forces
with Summit allows us to bring additional sophisticated financial
resources to a group of customers that like to do business with
Texas-based financial institutions. The bankers that have built
Summit understand the importance of serving their local
communities, just as we have for 138 years. I am proud to welcome
such a respected group of employees and the customers they serve
into the Frost financial family." Philip Norwood, chairman,
president and CEO of Summit Bancshares, Inc. said, "We are
delighted to be entering into this strategic merger with
Cullen/Frost. It provides an incredible opportunity for our
shareholders to remain investors in a dynamic and diverse banking
organization that has a consistent and solid record of growth. At
the same time, we are protecting our long standing reputation by
joining with an organization that we believe shares our values. I
am confident that this is a positive move for all concerned, our
shareholders, our customers, our employees and our community. We
look forward to growing the Tarrant County market as part of
Cullen/Frost and strengthening our combined position as a premier
Texas-based bank. We have known the bankers at Cullen/Frost for
many years and believe that adding the additional capabilities that
Cullen/Frost brings will create value for our customers as well as
Cullen/Frost's shareholders." Cullen/Frost's financial advisors
were Lehman Brothers and its legal advisors were Sullivan &
Cromwell LLP. Summit's financial advisors were Keefe, Bruyette
& Woods and its legal advisors were Bracewell & Giuliani
LLP. Summit is a community oriented bank holding company with one
banking subsidiary, Summit Bank, N.A. and assets of $1.1 billion at
March 31, 2006. The bank is engaged in full-service commercial and
consumer banking in Tarrant County with twelve offices. Summit
Bancshares, Inc. is publicly traded on the Nasdaq National Market
System and listed under the symbol "SBIT". Cullen/Frost Bankers,
Inc. will host a conference call on Monday, July 3, 2006, at 10:00
a.m. Central Time (CT) to discuss the merger. The media and other
interested parties are invited to access the call in a "listen
only" mode at 1-800-944-6430. Digital playback of the conference
call will be available after 2:00 p.m. CT until midnight Monday,
July 10, 2006 at 800-642-1687 with Conference ID # of 2634817. The
call and investor presentation will also be available by webcast at
the URL listed below and available for playback after 2:00 p.m. CT.
After entering the website, http://www.frostbank.com/, go to "About
Frost" on the top navigation bar, then click on Investor Relations.
Cullen/Frost Bankers, Inc. is a financial holding company,
headquartered in San Antonio, Texas with assets of $11.6 billion at
March 31, 2006. The corporation provides a full range of commercial
and consumer banking products, investment and brokerage services,
insurance products and investment banking services. Its subsidiary,
Frost Bank, operates 93 financial centers across Texas in the
Austin, Corpus Christi, Dallas, Fort Worth, Houston, Rio Grande
Valley and San Antonio regions. Founded in 1868, Frost is the
largest national bank based in Texas and has been helping Texans
with their financial needs during three centuries. Cullen/Frost
Bankers' stock is traded on the New York Stock Exchange under the
symbol "CFR". Forward Looking Statements Certain statements
contained in this filing that are not statements of historical fact
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act"),
notwithstanding that such statements are not specifically
identified. In addition, certain statements may be contained in the
future filings of Cullen/Frost Bankers, Inc. with the Securities
and Exchange Commission ("SEC"), in press releases, and in oral and
written statements made by or with the approval of Cullen/Frost
that are not statements of historical fact and constitute
forward-looking statements within the meaning of the Act. Examples
of forward-looking statements include, but are not limited to: (i)
statements about the benefits of the merger between Cullen/Frost
and Summit, including future financial and operating results, cost
savings, enhanced revenues and accretion to reported earnings that
may be realized from the merger; (ii) statements of plans,
objectives and expectations of Cullen/Frost or Summit or their
managements or Boards of Directors; (iii) statements of future
economic performance; and (iv) statements of assumptions underlying
such statements. Words such as "believes," "anticipates,"
"expects," "intends," "targeted," "continue," "remain," "will,"
"should," "may" and other similar expressions are intended to
identify forward-looking statements but are not the exclusive means
of identifying such statements. Forward-looking statements involve
risks and uncertainties that may cause actual results to differ
materially from those in such statements. Factors that could cause
actual results to differ from those discussed in the forward-
looking statements include, but are not limited to: (i) the risk
that the businesses of Cullen/Frost and Summit will not be
integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (ii) expected revenue
synergies and cost savings from the merger may not be fully
realized or realized within the expected time frame; (iii) revenues
following the merger may be lower than expected; (iv) deposit
attrition, operating costs, customer loss and business disruption
following the merger, including, without limitation, difficulties
in maintaining relationships with employees, may be greater than
expected; (v) the ability to obtain governmental approvals of the
merger on the proposed terms and schedule; (vi) the failure of
Summit's shareholders to approve the merger; (vii) local, regional,
national and international economic conditions and the impact they
may have on Cullen/Frost and Summit and their customers and
Cullen/Frost's and Summit's assessment of that impact; (viii)
changes in the level of non-performing assets and charge-offs; (ix)
changes in estimates of future reserve requirements based upon the
periodic review thereof under relevant regulatory and accounting
requirements; (x) inflation, interest rate, securities market and
monetary fluctuations; (xi) changes in the competitive environment
among financial holding companies and banks; and (xii) changes in
laws and regulations (including laws and regulations concerning
taxes, banking, securities and insurance) with which Cullen/Frost
and Summit must comply. Additional factors that could cause
Cullen/Frost's results to differ materially from those described in
the forward-looking statements can be found in Cullen/Frost's
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K filed with the SEC. All subsequent
written and oral forward-looking statements concerning the proposed
transaction or other matters and attributable to Cullen/Frost or
Summit or any person acting on their behalf are expressly qualified
in their entirety by the cautionary statements referenced above.
Forward-looking statements speak only as of the date on which such
statements are made. Cullen/Frost and Summit undertake no
obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is
made, or to reflect the occurrence of unanticipated events.
Additional Information In connection with the proposed merger,
Cullen/Frost will file with the SEC a Registration Statement on
Form S-4 that will include a Proxy Statement of Summit and a
Prospectus of Cullen/Frost, as well as other relevant documents
concerning the proposed transaction. Shareholders are urged to read
the Registration Statement and the Proxy Statement/Prospectus
regarding the merger 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 Cullen/Frost at the SEC's Internet site
(http://www.sec.gov/). You will also be able to obtain these
documents, free of charge, at http://www.frostbank.com/ under the
tab "About Frost" and then under the heading "Investor Relations"
and then under "SEC Filings". Copies of the Proxy
Statement/Prospectus and the SEC filings that will be incorporated
by reference in the Proxy Statement/Prospectus can also be
obtained, free of charge, by directing a request to Greg Parker,
Executive Vice President & Director of Investor Relations,
Cullen/Frost Bankers, Inc., P.O. Box 1600, San Antonio, Texas
78296, (210) 220-5632. Cullen/Frost and Summit and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of Summit in
connection with the proposed merger. Information about the
directors and executive officers of Cullen/Frost is set forth in
the proxy statement for Cullen/Frost's 2006 annual meeting of
shareholders, as filed with the SEC on a Schedule 14A on March 27,
2006. Information about the directors and executive officers of
Summit is set forth in the proxy statement for Summit's 2006 annual
meeting of shareholders, as filed with the SEC on a Schedule 14A on
March 24, 2006. Additional information regarding the interests of
those participants and other persons who may be deemed participants
in the transaction may be obtained by reading the Proxy
Statement/Prospectus regarding the proposed merger when it becomes
available. You may obtain free copies of this document as described
in the preceding paragraph. Cullen/Frost contacts Greg Parker
Investor Relations 210/220-5632 or Renee Sabel Media Relations
210/220-5416 Summit contact Bob G. Scott COO/CFO 817/877-2660
http://www.newscom.com/cgi-bin/prnh/20030109/CFRLOGO
http://photoarchive.ap.org/ DATASOURCE: Cullen/Frost Bankers, Inc.
CONTACT: Greg Parker, Investor Relations, +1-210-220-5632, Renee
Sabel, Media Relations, +1-210-220-5416, both of Cullen/Frost; or
Bob G. Scott, COO/CFO of Summit, +1-817-877-2660, Web site:
http://www.frostbank.com/
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