Faaborg, Denmark, 2011-03-02 15:00 CET (GLOBE NEWSWIRE) -- Following positive negotiations since the summer of 2010 the boards of directors in Svendborg Sparekasse and in Sparekassen Faaborg have agreed to recommend to the committee of shareholders and the general meeting of each bank to conduct a merger of the two banks. The new combined bank will remain listed on NASDAQ OMX Copenhagen under a new name, Bank Fyn A/S.
The island of Funen will be the market area of the new combined bank named Bank Fyn A/S, since branch coverage in the two savings banks complement each other in the very best way and still provide space for new branch locations in Funen. Bank Fyn will be the largest independent bank in Funen. Both savings banks see significant synergies in merging, especially as to expansion of market area, cost reduction and better performance.
Today the two banks employ a total of 319 persons. Deposits, loans and guarantees amount to approx. DKK 15,5b.
Sparekassen Faaborg has existed since 1844 and Svendborg Sparekasse since 1852 so they are both deeply rooted in the local communities. For decades they have cooperated, among others around a leasing company, and in many ways the two banks think alike. Both savings banks bring with them many good customers, a lot of business and employees to the new combined bank, Bank Fyn. The merger of the two savings banks will result in an even stron-ger, future-orientated and competitive bank, building on sound and solid business principles, to the benefit of the shareholders, customers, employees and other stakeholders.
Capital structure and liquidity
By 31 December 2010 the new combined bank, Bank Fyn, has a capital base of DKK 1,9b and thereby a surplus of DKK 0,9b compared with the statutory requirement. The liquidity is ensured by a very good deposit coverage supplemented with long-term solid funding including governmental guaranteed loans of DKK 1b. The liquidity surplus amounts to DKK 3,6b.
Bank merger and shareholder exchange ratio
The merger implies the establishment of a new bank named Bank Fyn consisting of the activities from the two savings banks.
The shareholders current stock will be exchanged for shares in the new bank, Bank Fyn. The boards of directors have agreed to calculate the exchange ratio on basis of the value adjusted book value of the shares by 31 December 2010 in the two savings banks.
The final exchange ratio will be determined after the conduct of a due diligence investigation of both savings banks. The due diligence investigation will be initiated now and expected to be completed within the next few weeks.
The management
The boards of directors have agreed that the members of the executive board of the new bank will be Mr Claus Sejling from Sparekassen Faaborg as CEO and Mr Svend Erik Kracht from Svendborg Sparekasse as manager. Mr Kracht will retire when the merging process is completed, but at the latest by summer 2012, when he reaches the age limit referred to in his contract.
The executive board’s office will be in Svendborg, but will also occasionally be in Faaborg, as the administrative head office of the savings banks in Faaborg and Svendborg will continue to be used for some time, until a new head office can be established in Odense.
The two boards of directors will be merged. Mr Arne Knudsen, chairman in Svendborg Sparekasse, will continue as chairman and Mr Niels Erik Jørgensen, board member in Sparekassen Faaborg, as vice-chairman.
Mr Christian Ermose, chairman of Sparekassen Faaborg, retires at the ordinary general meeting in 2011 due to the age limit determined by the articles of association, and election of a new member in replacement is not recommended. This also applies for Mr Søren Westerskov, board member of Sparekassen Faaborg, who has resigned by 1 February 2011 due to a long-term stay abroad.
The number of board members will then be 16, 9 from Sparekassen Faaborg (5 elected by the committee of shareholders and 4 by the staff) and 7 from Svendborg Sparekasse (5 elected by the committee of shareholders and 2 by the staff). It is assumed that the works committee of the new bank approves that the staff elected board members are allowed to continue their term out (spring 2014) It is intended that the board of directors, by natural wastage, should be reduced to 9 members, of whom 3 are elected by the staff.
Finally it is agreed that the committee of shareholders of each bank should be merged to 82 members.
Shareholder value
The merger will allow the new bank to optimize, especially the administrative functions, and also to raise the competency levels. In the market area it is expected that combined forces will strengthen the performance of the bank significantly. Already during 2011 some of the synergy effects are expected to work through, and the boards believe that a merger, even in the shorter term, will create improved core earnings. Both boards recommend to the about 10,500 shareholders of Sparekassen Faaborg and the about 5,000 shareholders of Svendborg Sparekasse to vote for the merger proposal.
The foundation of Sparekassen Faaborg and the foundation of Svendborg Sparekasse, a major shareholder in the respective savings bank, have agreed to vote for the proposal. Both founda-tions are subject to the statutory restriction on voting rights.
Time frame
Assuming that the general meeting of each savings bank approves of the merger and that the Danish FSA gives its permission to the merger, it will be implemented with effect from 1 January 2011.
The committee of shareholders of each savings bank will meet at the end of March or the beginning of April 2011 to discuss the proposed merger. It is then expected that the committees of shareholders will join the boards of directors in recommending the merger proposal to the general meeting.
Extraordinary general meetings in both savings banks will be convened in mid-April 2011 and expected to be held on 18 May 2011, Agenda and related documents including merger documents will be published and be available in the head offices and on the websites at the date of convening
Questions, if any, can be directed to the CEOs.
Claus Sejling, Sparekassen Faaborg: +45 6361 1814
Svend Erik Kracht, Svendborg Sparekasse: +45 6217 6501
Mr Claus Sejling, CEO, phone no. +45 6361 1814
