As
filed with the Securities and Exchange Commission on December 12,
2007
|
|||||
Registration
No. 333-________
|
|||||
SECURITIES
AND EXCHANGE COMMISSION
|
|||||
Washington,
DC 20549
|
|||||
FORM
S-4
|
|||||
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
|
|||||
FIRST
DEFIANCE FINANCIAL CORP.
|
|||||
(Exact
name of registrant as specified in its charter)
|
|||||
OHIO
|
6035
|
34-1803915
|
|||
(State
or other jurisdiction
of
incorporation or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
|||
601
Clinton Street
Defiance,
Ohio 43512
(419)
782-5015
|
|||||
(Address,
including ZIP Code, and telephone number, including area code, of
registrant’s principal executive offices)
|
|||||
William
J. Small
Chairman,
President and Chief Executive Officer
First
Defiance Financial Corp.
601
Clinton Street
Defiance,
Ohio 43512
(419)
782-5015
|
|||||
(Address,
including ZIP Code, and telephone number, including area code, of
agent
for service)
|
|||||
Copies
to:
|
|||||
Terri
R. Abare, Esq.
Vorys,
Sater, Seymour and Pease LLP
221
E. Fourth Street
Suite
2000, Atrium Two
Cincinnati,
Ohio 45202
(513)
723-4000
|
Kimberly
A. Baber, Esq.
Varnum,
Riddering, Schmidt & Howlett LLP
Bridgewater
Place
333
Bridge Street, N.W.
Grand
Rapids, Michigan 49501
(616)
336-6000
|
CALCULATION
OF REGISTRATION FEE
|
||||
Title
of each
class
of securities
to
be registered
|
Amount
to be
registered
(1)
|
Proposed
maximum
offering
price
per
unit
|
Proposed
maximum
aggregate
offering
price
(2)
|
Amount
of
registration
fee
|
Common
shares, $0.01 par value per share
|
1,031,381
shares
|
N/A
|
$21,848,506
|
$670.75
|
(1)
|
Based
upon the maximum number of shares of common stock that the Registrant
may
be required to issue in the transaction, calculated as the product
of
(i) 725,864 (the aggregate number of shares of Pavilion Bancorp, Inc.
common
|
|
stock
estimated to be outstanding when the transaction is consummated)
and (ii)
an exchange ratio of 1.4209 shares of the Registrant’s common stock for
each share of Pavilion Bancorp, Inc. common
stock.
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee required
by
Section 6(b) of the Securities Act of 1933 and computed pursuant
to Rule
457(f)(1) thereunder on the basis of the market value of Pavilion
Bancorp’s common stock to be exchanged in the transaction, computed, in
accordance with Rule 457(f), as the product of (i) $67.60 (the average
of
the bid and asked price on December 5, 2007) and (ii) 725,864, the
aggregate number of shares of Pavilion Bancorp common stock estimated
to
be outstanding when the transaction is consummated, less $27,219,900,
the
amount of cash estimated to be paid by the Registrant to shareholders
of
Pavilion Bancorp.
|
|
1.
|
To
approve the Agreement and Plan of Merger, dated as of October 2,
2007, by
and between First Defiance Financial Corp. (“First Defiance”) and
Pavilion, which provides for the merger of Pavilion into First Defiance
and the exchange of each outstanding share of Pavilion common stock
into
the right to receive (a) 1.4209 shares of First Defiance common stock,
and
(b) a cash amount equal to $37.50.
|
|
2.
|
To
transact such other business that may properly come before the special
meeting, including, if necessary, the adjournment of the special
meeting
to allow for additional solicitation of shareholder votes to obtain
the
required vote to approve the merger
agreement.
|
By
Order of the Board of Directors,
|
|
January
___, 2008
|
Eileen
Loveland, Secretary
|
PROSPECTUS
|
PROXY
STATEMENT
|
|
FIRST
DEFIANCE FINANCIAL CORP.
|
PAVILION
BANCORP, INC.
|
|
For
the issuance of up to 1,031,381 shares of common stock
|
For
the Special Meeting of Shareholders
|
|
Neither
the Securities and Exchange Commission nor any state securities commission
has approved or disapproved of the securities to be issued under
this
prospectus/proxy statement or determined if this prospectus/proxy
statement is accurate or adequate. Any representation to the
contrary is a criminal offense. The securities we are offering
through this document are not savings or deposit accounts or other
obligations of any bank or non-bank subsidiary of either of our companies,
and they are not insured by the Federal Deposit Insurance Corporation,
the
Deposit Insurance Fund, or any other governmental
agency.
|
1
|
|
1
|
|
3
|
|
4
|
|
5
|
|
7
|
|
8
|
|
9
|
|
18
|
|
18
|
|
18
|
|
18
|
|
18
|
|
19
|
|
19
|
|
19
|
|
20
|
|
20
|
|
21
|
|
23
|
|
31
|
|
32
|
|
32
|
|
33
|
|
34
|
|
35
|
|
36
|
|
36
|
|
37
|
|
37
|
|
38
|
|
38
|
|
40
|
|
41
|
|
41
|
|
41
|
|
41
|
|
41
|
|
43
|
|
45
|
|
45
|
|
45
|
Agreement
and Plan of Merger dated October 2, 2007, by and between First Defiance
Financial Corp. and Pavilion Bancorp,
Inc.
|
Opinion
of Donnelly, Penman & Partners, dated as of ____________
___, 2008.
|
First
Defiance Financial Corp.
601
Clinton Street
Defiance,
Ohio 43512-3272
Attention: John
C. Wahl
(419)
782-5015
|
|
·
|
1.4209
shares of First Defiance common stock;
and
|
|
·
|
a
cash amount equal to $37.50.
|
|
•
|
provisions
in the merger agreement relating to indemnification of directors
and
officers and insurance for directors and officers of Pavilion for
events
occurring before the merger;
|
|
•
|
the
appointment of up to six Pavilion directors who do not become employees
or
directors of First Defiance or First Federal to an advisory board
of First
Federal.
|
|
·
|
by
the mutual written consent of First Defiance and
Pavilion;
|
|
·
|
by
either First Defiance or Pavilion if the merger is not completed
on or
before June 30, 2008;
|
|
·
|
by
either First Defiance or Pavilion if any event occurs which would
prevent
the satisfaction of certain conditions described in the merger
agreement;
|
|
·
|
by
either First Defiance or Pavilion if Pavilion executes a definitive
agreement with any person or entity other than First Defiance providing
for the acquisition of all, or a material amount, of the assets or
shares
of Pavilion common stock, including by merger, consolidation or business
combination;
|
|
·
|
by
Pavilion if First Defiance does not increase the number of shares
of First
Defiance common stock to be exchanged for the shares of Pavilion
common
stock if necessary to preserve the status of the merger as a tax-free
reorganization;
|
|
·
|
by
Pavilion if the failure to terminate the merger agreement could be
expected to constitute a breach of the Pavilion board of directors’
fiduciary duties; or
|
|
·
|
by
First Defiance if the cost to perform any environmental remediation
activities of Pavilion real properties, if required, is expected
to exceed
$750,000 in the aggregate.
|
First
Defiance
|
Pavilion
|
Pavilion
equivalent
per
share price
|
|
October
1, 2007
|
$25.83
|
$47.00
|
$74.20
|
January
___, 2008
|
$____
|
$____
|
$____
|
|
•
|
an
increase in loan
delinquencies;
|
|
||
|
•
|
an
increase in problem assets and
foreclosures;
|
|
||
|
•
|
a
decrease in demand for our
products and
services; and
|
|
•
|
a
decrease in the value of
collateral for loans, especially real estate, in turn reducing customers’
borrowing power, and the value of assets associated with problem
loans.
|
|
·
|
expected
cost savings from the merger may not be fully realized or realized
within
the expected time frame;
|
|
·
|
revenues
following the merger may be lower than expected or deposit withdrawals,
operating costs or customer loss and business disruption following
the
merger may be greater than
expected;
|
|
·
|
competition
among depository and other financial services companies may increase
significantly;
|
|
·
|
costs
or difficulties related to the integration of First Defiance and
Pavilion
may be greater than expected;
|
|
·
|
general
economic or business conditions, such as interest rates, may be less
favorable than expected;
|
|
·
|
adverse
changes may occur in the securities market;
and
|
|
·
|
legislation
or changes in regulatory requirements may adversely affect the businesses
in which First Defiance is engaged.
|
First
Defiance common stock
|
Pavilion
common stock
|
|||||||||||||||||||||||
High
|
Low
|
Dividends
|
High
|
Low
|
Dividends
|
|||||||||||||||||||
Quarter
ended:
|
||||||||||||||||||||||||
September
30, 2007
|
$ |
29.64
|
$ |
23.99
|
$ |
0.25
|
$ |
47.00
|
$ |
43.15
|
$ |
0.26
|
||||||||||||
June
30, 2007
|
30.00
|
26.71
|
0.25
|
48.00
|
45.00
|
0.26
|
||||||||||||||||||
March
31, 2007
|
30.25
|
27.25
|
0.25
|
47.00
|
43.20
|
0.25
|
||||||||||||||||||
December
31, 2006
|
30.70
|
26.87
|
0.25
|
47.00
|
43.25
|
0.35
|
||||||||||||||||||
September
30, 2006
|
28.69
|
25.18
|
0.24
|
48.00
|
45.50
|
0.24
|
||||||||||||||||||
June
30, 2006
|
30.29
|
25.09
|
0.24
|
46.50
|
44.75
|
0.24
|
||||||||||||||||||
March
31, 2006
|
28.88
|
25.39
|
0.24
|
49.00
|
43.50
|
0.24
|
||||||||||||||||||
December
31, 2005
|
30.06
|
25.56
|
0.24
|
50.25
|
46.15
|
0.24
|
||||||||||||||||||
September
30, 2005
|
31.44
|
26.21
|
0.22
|
55.00
|
50.00
|
0.24
|
||||||||||||||||||
June
30, 2005
|
30.46
|
25.29
|
0.22
|
67.00
|
53.00
|
0.24
|
||||||||||||||||||
March
31, 2005
|
29.90
|
26.00
|
0.22
|
59.80
|
54.00
|
0.24
|
||||||||||||||||||
First
Defiance consolidated
|
||||||||||||||||||||||||||||
statement
of financial data:
|
At
September 30
|
At
December 31,
|
||||||||||||||||||||||||||
2007
|
2006
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||||||||||||
(Unaudited)
|
(In
thousands)
|
|||||||||||||||||||||||||||
Total
assets
|
$ |
1,579,946
|
$ |
1,524,679
|
$ |
1,527,879
|
$ |
1,461,082
|
$ |
1,126,667
|
$ |
1,040,599
|
$ |
884,245
|
||||||||||||||
Loans
held-to maturity, net
|
1,251,445
|
1,222,414
|
1,226,310
|
1,164,481
|
878,912
|
735,255
|
561,041
|
|||||||||||||||||||||
Loans
held-for-sale
|
7,426
|
3,669
|
3,426
|
5,282
|
2,295
|
5,872
|
15,336
|
|||||||||||||||||||||
Allowance
for loan losses
|
13,427
|
14,298
|
13,579
|
13,673
|
9,956
|
8,844
|
7,496
|
|||||||||||||||||||||
Non-performing
assets
|
11,915
|
10,044
|
9,675
|
5,356
|
1,990
|
2,949
|
2,731
|
|||||||||||||||||||||
Securities
available-for-sale
|
111,236
|
118,429
|
110,682
|
113,079
|
137,003
|
168,259
|
209,604
|
|||||||||||||||||||||
Securities
held-to maturity
|
1,236
|
1,588
|
1,441
|
1,775
|
2,255
|
2,776
|
3,921
|
|||||||||||||||||||||
Mortgage
servicing rights
|
5,917
|
5,430
|
5,529
|
5,063
|
3,598
|
3,431
|
2,090
|
|||||||||||||||||||||
Deposits
and borrowers’ escrow balances
|
1,208,594
|
1,130,919
|
1,139,112
|
1,070,106
|
797,979
|
729,227
|
599,889
|
|||||||||||||||||||||
FHLB
advances
|
128,461
|
176,442
|
162,228
|
180,960
|
178,213
|
164,522
|
149,096
|
|||||||||||||||||||||
Stockholders’
equity
|
164,706
|
158,155
|
159,825
|
151,216
|
126,874
|
124,269
|
120,110
|
First
Defiance consolidated
operating
results:
|
Nine
months ended
September
30,
|
Year
ended December 31,
|
||||||||||||||||||||||||||
2007
|
2006
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||||||||||||
(Unaudited)
|
(In
thousands, except per share data)
|
|||||||||||||||||||||||||||
Interest
income from
continuing
operations
|
$ |
73,553
|
$ |
68,755
|
$ |
93,065
|
$ |
76,174
|
$ |
54,731
|
$ |
50,629
|
$ |
46,908
|
||||||||||||||
Interest
expense from
continuing
operations
|
37,420
|
31,978
|
44,043
|
28,892
|
20,381
|
20,855
|
22,044
|
|||||||||||||||||||||
Net
interest income from
continuing
operations
|
36,133
|
36,777
|
49,022
|
47,282
|
34,350
|
29,774
|
24,864
|
|||||||||||||||||||||
Provision
for loan losses
|
1,704
|
1,438
|
1,756
|
1,442
|
1,548
|
1,719
|
1,451
|
|||||||||||||||||||||
Non-interest
income
|
16,862
|
14,702
|
19,624
|
15,925
|
13,996
|
16,843
|
10,401
|
|||||||||||||||||||||
Settlement
of contingent liability
|
-
|
-
|
-
|
-
|
1,927
|
-
|
-
|
|||||||||||||||||||||
Acquisition
related charges
|
-
|
-
|
-
|
3,476
|
-
|
-
|
-
|
|||||||||||||||||||||
Other
non-interest expense
|
35,950
|
32,629
|
43,839
|
40,466
|
29,273
|
27,126
|
24,408
|
|||||||||||||||||||||
Income
before income taxes
|
15,341
|
17,412
|
23,051
|
17,823
|
15,598
|
17,772
|
9,406
|
|||||||||||||||||||||
Income
taxes
|
4,995
|
5,785
|
7,451
|
5,853
|
4,802
|
5,690
|
2,986
|
|||||||||||||||||||||
Income
from continuing
operations
|
10,346
|
11,627
|
15,600
|
11,970
|
10,796
|
12,082
|
6,420
|
|||||||||||||||||||||
Discontinued
operations, net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
8,853
|
|||||||||||||||||||||
Cumulative
effect of change in
method of accounting for goodwill
|
-
|
-
|
-
|
-
|
-
|
-
|
(194 | ) | ||||||||||||||||||||
Net
income
|
10,346
|
11,627
|
15,600
|
11,970
|
10,796
|
12,082
|
15,079
|
|||||||||||||||||||||
Basic
earnings per share from
continuing
operations
|
1.46
|
1.66
|
2.22
|
1.75
|
1.77
|
2.00
|
1.01
|
|||||||||||||||||||||
Basic
earnings per share
|
1.46
|
1.66
|
2.22
|
1.75
|
1.77
|
2.00
|
2.37
|
|||||||||||||||||||||
Diluted
earnings per share from
continuing
operations
|
1.44
|
1.62
|
2.18
|
1.69
|
1.69
|
1.91
|
0.97
|
|||||||||||||||||||||
Diluted
earnings per share
|
1.44
|
1.62
|
2.18
|
1.69
|
1.69
|
1.91
|
2.28
|
At
or for the nine months
ended
September
30*
|
Year
ended December 31,
|
|||||||||||||||||||||||||||
Other
data:
|
2007
|
2006
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||||||||||||
Return
on average assets
|
0.90 | % | 1.04 | % | 1.04 | % | 0.88 | % | 1.01 | % | 1.24 | % | 0.77 | % | ||||||||||||||
Return
on average equity
|
8.46 | % | 10.08 | % | 10.03 | % | 8.26 | % | 8.57 | % | 9.97 | % | 5.39 | % | ||||||||||||||
Interest
rate spread
|
3.18 | % | 3.40 | % | 3.37 | % | 3.63 | % | 3.37 | % | 3.13 | % | 2.92 | % | ||||||||||||||
Net
interest margin
|
3.56 | % | 3.71 | % | 3.68 | % | 3.87 | % | 3.60 | % | 3.42 | % | 3.38 | % | ||||||||||||||
Ratio
of operating expense
to
average total assets
|
3.14 | % | 2.93 | % | 2.93 | % | 3.22 | % | 2.98 | % | 2.91 | % | 3.16 | % |
Pavilion
consolidated statement of financial condition:
|
At
September 30,
|
At
December 31,
|
||||||||||||||||||||||||||
2007
|
2006
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||||||||||||
(Unaudited)
|
(In
thousands)
|
|||||||||||||||||||||||||||
Total
assets
|
$ |
278,636
|
$ |
298,430
|
$ |
295,023
|
$ |
287,881
|
$ |
259,322
|
$ |
323,382
|
$ |
287,286
|
||||||||||||||
Securities
available for sale
|
11,818
|
24,005
|
17,828
|
25,407
|
27,886
|
20,436
|
25,216
|
|||||||||||||||||||||
Loans
receivable
|
240,667
|
245,269
|
246,129
|
237,598
|
207,159
|
209,467
|
184,837
|
|||||||||||||||||||||
Allowance
for loan losses
|
3,085
|
2,759
|
2,817
|
2,683
|
2,495
|
2,302
|
2,100
|
|||||||||||||||||||||
Deposits
|
228,948
|
233,319
|
235,944
|
210,748
|
199,992
|
202,366
|
189,046
|
|||||||||||||||||||||
Shareholders’
equity
|
29,364
|
27,835
|
27,936
|
26,384
|
31,857
|
26,524
|
25,069
|
Pavilion
consolidated statement of operations:
|
At
or for nine months
ended
September
30,
|
Year
Ended December 31,
|
||||||||||||||||||||||||||
2007
|
2006
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||||||||||||
(Unaudited)
|
(In
thousands, except per share data)
|
|||||||||||||||||||||||||||
Interest
and dividend income
|
$ |
14,774
|
$ |
14,018
|
$ |
18,875
|
$ |
16,130
|
$ |
14,885
|
$ |
15,039
|
$ |
16,021
|
||||||||||||||
Interest
expense
|
5,654
|
5,136
|
7,050
|
4,449
|
2,795
|
3,252
|
4,777
|
|||||||||||||||||||||
Net
interest income
|
9,120
|
8,882
|
11,825
|
11,681
|
12,090
|
11,787
|
11,424
|
|||||||||||||||||||||
Provision
for loan losses
|
458
|
225
|
333
|
342
|
693
|
595
|
667
|
|||||||||||||||||||||
Net
interest income after
provision
for loan losses
|
8,662
|
8,657
|
11,492
|
11,339
|
11,397
|
11,192
|
10,757
|
|||||||||||||||||||||
Noninterest
income
|
2,276
|
2,272
|
3,068
|
3,277
|
3,566
|
5,840
|
5,625
|
|||||||||||||||||||||
Noninterest
expense
|
8,307
|
8,285
|
11,088
|
12,075
|
11,809
|
12,110
|
11,384
|
|||||||||||||||||||||
Income
from continuing operations before
income taxes |
2,631
|
2,644
|
3,472
|
2,541
|
3,154
|
4,922
|
4,998
|
|||||||||||||||||||||
Income
taxes from continuing operations
|
875
|
766
|
1,071
|
603
|
1,001
|
1,563
|
1,590
|
|||||||||||||||||||||
Income
from continuing
operations
|
1,756
|
1,878
|
2,401
|
1,938
|
2,153
|
3,359
|
3,408
|
|||||||||||||||||||||
Income
from discontinued operations,
net of tax
|
-
|
-
|
-
|
-
|
4,979
|
(124 | ) | (553 | ) | |||||||||||||||||||
Net
income
|
1,756
|
1,878
|
2,401
|
1,938
|
7,132
|
3,235
|
2,855
|
|||||||||||||||||||||
Basic
earnings per share from
continuing
operations
|
2.42
|
2.55
|
3.27
|
2.47
|
2.54
|
3.92
|
3.85
|
|||||||||||||||||||||
Basic
earnings per share from
discontinued
operations
|
-
|
-
|
-
|
-
|
5.88
|
(0.14 | ) | (0.63 | ) | |||||||||||||||||||
Basic
earnings per share
|
2.42
|
2.55
|
3.27
|
2.47
|
8.42
|
3.78
|
3.23
|
|||||||||||||||||||||
Diluted
earnings per share from
continuing
operations
|
2.41
|
2.54
|
3.26
|
2.45
|
2.52
|
3.89
|
3.83
|
|||||||||||||||||||||
Diluted
earnings per share from
discontinued
operations
|
-
|
-
|
-
|
-
|
5.82
|
(0.14 | ) | (0.62 | ) | |||||||||||||||||||
Diluted
earnings per share
|
2.41
|
2.54
|
3.26
|
2.45
|
8.34
|
3.75
|
3.21
|
Other
data:
|
At
or for the nine
months
ended
September
30,*
|
Year
ended December 31,
|
||||||||||||||||||||||||||
2007
|
2006
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||||||||||||
Return
on average assets from continued operations
|
0.81 | % | 0.86 | % | 0.82 | % | 0.71 | % | 2.45 | % | 1.06 | % | 1.01 | % | ||||||||||||||
Return
on average equity from continued operations
|
8.23 | % | 9.28 | % | 8.84 | % | 6.66 | % | 24.43 | % | 12.54 | % | 11.74 | % | ||||||||||||||
Interest
rate spread
|
3.84 | % | 3.70 | % | 3.69 | % | 4.06 | % | 4.68 | % | 4.95 | % | 4.81 | % | ||||||||||||||
Net
interest margin
|
4.60 | % | 4.39 | % | 4.39 | % | 4.59 | % | 5.02 | % | 5.38 | % | 5.44 | % | ||||||||||||||
Ratio
of operating expense
to
average total assets
|
3.85 | % | 3.80 | % | 3.81 | % | 4.41 | % | 4.48 | % | 5.18 | % | 4.94 | % |
First
Defiance
historical |
Pavilio
historical |
Pro
forma
(1)
(2)
|
Per
equivalent
Pavilion share |
|||||||||||||
Book
value per share:
|
||||||||||||||||
At
September 30, 2007
|
$ |
23.21
|
$ |
40.44
|
$ |
23.66
|
$ |
67.97
|
||||||||
Cash
dividends declared per share:
|
||||||||||||||||
Nine
months ended September 30, 2007
|
$ |
0.75
|
$ |
0.77
|
$ |
0.75
|
$ |
2.15
|
||||||||
Year
ended December 31, 2006
|
$ |
0.97
|
$ |
1.07
|
$ |
0.97
|
$ |
2.79
|
||||||||
Diluted
net income per share:
|
||||||||||||||||
Nine
months ended September 30, 2007
|
$ |
1.44
|
$ |
2.41
|
$ |
1.26
|
$ |
3.62
|
||||||||
Year
ended December 31, 2006
|
$ |
2.18
|
$ |
3.26
|
$ |
1.92
|
$ |
5.52
|
(2)
|
The
pro forma book value per share of First Defiance is based on the
pro forma
common shareholders’ equity for First Defiance and Pavilion divided by
total pro forma common shares of the combined
entities.
|
First
|
Pro
Forma Adjustments(1)
|
Combined
|
||||||||||||||||||
Defiance
|
Pavilion
|
Debit
|
Credit
|
Pro
Forma
|
||||||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash
and due from banks
|
$ |
30,558
|
$ |
8,969
|
$ |
30,436
|
$ |
30,436
|
$ |
39,527
|
||||||||||
Interest-earning
deposits with financial
institutions
|
29,379
|
-
|
-
|
10,436
|
18,943
|
|||||||||||||||
Total
cash and cash
equivalents
|
59,937
|
8,969
|
30,436
|
40,872
|
58,470
|
|||||||||||||||
Securities
|
||||||||||||||||||||
Available-for-sale
|
111,236
|
11,818
|
-
|
-
|
123,054
|
|||||||||||||||
Held
to maturity
|
1,236
|
-
|
-
|
-
|
1,236
|
|||||||||||||||
Loans
held for sale
|
7,426
|
939
|
-
|
-
|
8,365
|
|||||||||||||||
Loans
receivable, net
|
1,251,445
|
237,582
|
671
|
-
|
1,489,698
|
|||||||||||||||
Mortgage
servicing rights
|
5,917
|
2,253
|
-
|
-
|
8,170
|
|||||||||||||||
Accrued
interest receivable
|
8,102
|
2,488
|
-
|
-
|
10,590
|
|||||||||||||||
Federal
Home Loan Bank stock and
Other
interest-earning assets
|
18,586
|
2,683
|
-
|
-
|
21,269
|
|||||||||||||||
Bank
Owned Life Insurance
|
28,315
|
-
|
-
|
-
|
28,315
|
|||||||||||||||
Premises
and equipment
|
38,287
|
10,112
|
-
|
-
|
48,399
|
|||||||||||||||
Real
estate and other assets held for sale
|
3,392
|
917
|
-
|
-
|
4,309
|
|||||||||||||||
Goodwill
|
36,515
|
-
|
21,010
|
57,525
|
||||||||||||||||
Core
deposit and other intangibles
|
3,717
|
-
|
5,870
|
-
|
9,587
|
|||||||||||||||
Other
assets
|
5,835
|
875
|
-
|
-
|
6,710
|
|||||||||||||||
Total
assets
|
$ |
1,579,946
|
$ |
278,636
|
$ |
57,987
|
$ |
40,872
|
$ |
1,875,697
|
||||||||||
Liabilities
|
||||||||||||||||||||
Deposits
|
||||||||||||||||||||
Non-interest-bearing
|
$ |
109,128
|
$ |
41,783
|
$ |
-
|
$ |
-
|
$ |
150,911
|
||||||||||
Interest-bearing
|
1,099,036
|
187,165
|
193
|
-
|
1,286,008
|
|||||||||||||||
Total
deposits
|
1,208,164
|
228,948
|
193
|
-
|
1,436,919
|
|||||||||||||||
Federal
funds purchased
|
-
|
3,069
|
-
|
-
|
3,069
|
|||||||||||||||
Securities
sold under repurchase
agreements
|
24,645
|
1,552
|
-
|
-
|
26,197
|
|||||||||||||||
Federal
Home Loan Bank advances
|
128,461
|
10,657
|
19
|
-
|
139,099
|
|||||||||||||||
Subordinated
debentures
|
36,083
|
-
|
-
|
-
|
36,083
|
|||||||||||||||
Other
debt
|
-
|
-
|
-
|
20,000
|
20,000
|
|||||||||||||||
Accrued
interest payable and other
liabilities
|
17,887
|
5,046
|
3,283
|
2,364
|
22,014
|
|||||||||||||||
Total
liabilities
|
1,415,240
|
249,272
|
3,495
|
22,364
|
1,683,381
|
|||||||||||||||
Stockholders’
Equity
|
||||||||||||||||||||
Common
stock and paid in capital
|
112,704
|
10,668
|
10,668
|
27,610
|
140,314
|
|||||||||||||||
Stock
acquired by ESOP
|
(202 | ) |
-
|
-
|
-
|
(202 | ) | |||||||||||||
Retained
earnings
|
124,899
|
18,605
|
18,605
|
-
|
124,899
|
|||||||||||||||
Treasury
stock
|
(71,996 | ) |
-
|
-
|
-
|
(71,996 | ) | |||||||||||||
Accumulated
other comprehensive income
|
(699 | ) |
91
|
91
|
-
|
(699 | ) | |||||||||||||
Total
stockholders’
equity
|
164,706
|
29,364
|
29,364
|
27,595
|
192,316
|
|||||||||||||||
Total
liabilities and
stockholders’ equity
|
$ |
1,579,946
|
$ |
278,636
|
$ |
32,859
|
$ |
49,959
|
$ |
1,875,697
|
||||||||||
Shares
outstanding
|
7,095
|
726
|
-
|
-
|
-
|
|||||||||||||||
Retired
shares
|
-
|
-
|
726
|
-
|
-
|
|||||||||||||||
Newly
issued shares
|
-
|
-
|
-
|
1,031
|
-
|
|||||||||||||||
Resulting
shares outstanding
|
-
|
-
|
-
|
-
|
8,126
|
|||||||||||||||
Book
value per share
|
$ |
23.21
|
$ |
40.45
|
$ |
-
|
$ |
-
|
$ |
23.66
|
||||||||||
Tangible
book value per share
|
$ |
17.54
|
$ |
40.45
|
$ |
-
|
$ |
-
|
$ |
15.41
|
First
Defiance
|
Pavilion
|
Pro
Forma
Adjustments(1)
|
Pro
Forma
Combined
|
|||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||
Interest
Income:
|
||||||||||||||||
Loans
|
$ |
86,213
|
$ |
17,711
|
$ | (388 | ) | $ |
103,536
|
|||||||
Securities
|
5,645
|
796
|
(485 | ) |
5,956
|
|||||||||||
Federal
Funds sold and other
|
165
|
206
|
-
|
371
|
||||||||||||
FHLB
stock dividends
|
1,042
|
162
|
-
|
1,204
|
||||||||||||
Total
interest income
|
93,065
|
18,875
|
(873 | ) |
111,067
|
|||||||||||
Interest
Expense:
|
||||||||||||||||
Deposits
|
33,273
|
5,467
|
132
|
38,872
|
||||||||||||
Advances
and other borrowed funds
|
9,462
|
1,164
|
1,365
|
11,991
|
||||||||||||
Subordinated
debentures
|
1,308
|
419
|
-
|
1,727
|
||||||||||||
Total
interest income
|
44,043
|
7,050
|
1,497
|
52,590
|
||||||||||||
Net
interest income
|
49,022
|
11,825
|
(2,370 | ) |
58,477
|
|||||||||||
Provision
for loan losses
|
1,756
|
333
|
-
|
2,089
|
||||||||||||
Net
interest income after provision for loan losses
|
47,266
|
11,492
|
(2,370 | ) |
56,388
|
|||||||||||
Non-interest
income:
|
||||||||||||||||
Service
fees and other charges
|
9,303
|
1,354
|
-
|
10,657
|
||||||||||||
Mortgage
banking income
|
3,389
|
1,073
|
-
|
4,462
|
||||||||||||
Insurance
commissions
|
4,531
|
-
|
-
|
4,531
|
||||||||||||
Gain
on sale of non-mortgage loans
|
526
|
-
|
-
|
526
|
||||||||||||
Loss
on sale of securities
|
(2 | ) |
-
|
-
|
(2 | ) | ||||||||||
Trust
income
|
312
|
-
|
-
|
312
|
||||||||||||
Income
from Bank Owned Life Insurance
|
980
|
-
|
-
|
980
|
||||||||||||
Other
non-interest income
|
585
|
641
|
-
|
1,226
|
||||||||||||
Total
non-interest income
|
19,624
|
3,068
|
-
|
22,692
|
||||||||||||
Non-interest
expense:
|
||||||||||||||||
Compensation
and benefits
|
24,152
|
6,217
|
-
|
30,369
|
||||||||||||
Occupancy
|
5,103
|
1,029
|
-
|
6,132
|
||||||||||||
Data
processing
|
3,689
|
756
|
-
|
4,445
|
||||||||||||
Other
non-interest expense
|
10,895
|
3,086
|
1,176
|
15,157
|
||||||||||||
Total
non-interest expense
|
43,839
|
11,088
|
1,176
|
56,103
|
||||||||||||
Income
before income taxes
|
23,051
|
3,472
|
(3,546 | ) |
22,977
|
|||||||||||
Income
tax expense
|
7,451
|
1,071
|
(1,241 | ) |
7,281
|
|||||||||||
Net
income
|
$ |
15,600
|
$ |
2,401
|
$ | (2,305 | ) | $ |
15,696
|
|||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ |
2.22
|
$ |
3.27
|
$ |
-
|
$ |
1.95
|
||||||||
Diluted
|
2.18
|
3.26
|
$ |
-
|
1.92
|
|||||||||||
Average
shares outstanding
|
||||||||||||||||
Basic
|
7,028
|
734
|
- |
-
|
||||||||||||
Retired
-- basic
|
-
|
-
|
(734 | ) |
-
|
|||||||||||
Newly
issued -- basic
|
-
|
-
|
1,031
|
-
|
||||||||||||
Resulting
basic
|
-
|
-
|
-
|
8,059
|
||||||||||||
Diluted
|
7,163
|
736
|
- |
-
|
||||||||||||
Retired
-- diluted
|
-
|
-
|
(736 | ) |
-
|
|||||||||||
Newly
issued -- diluted
|
-
|
-
|
1,031
|
-
|
||||||||||||
Resulting
diluted
|
-
|
-
|
- |
8,194
|
First
Defiance
|
Pavilion
|
Pro
Forma
Adjustments(1)
|
Pro
Forma
Combined
|
|||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||
Interest
Income:
|
||||||||||||||||
Loans
|
$ |
67,882
|
$ |
13,941
|
$ | (251 | ) | $ |
81,572
|
|||||||
Securities
|
4,290
|
526
|
-
|
4,816
|
||||||||||||
Federal
Funds sold and other
|
483
|
210
|
(364 | ) |
329
|
|||||||||||
FHLB
stock dividends
|
898
|
97
|
-
|
995
|
||||||||||||
Total
interest income
|
73,553
|
14,774
|
(615 | ) |
87,712
|
|||||||||||
Interest
Expense:
|
||||||||||||||||
Deposits
|
30,130
|
5,083
|
106
|
35,319
|
||||||||||||
Advances
and other borrowed funds
|
5,772
|
571
|
1,028
|
7,371
|
||||||||||||
Subordinated
debentures
|
1,518
|
-
|
-
|
1,518
|
||||||||||||
Total
interest income
|
37,420
|
5,654
|
1,134
|
44,208
|
||||||||||||
Net
interest income
|
36,133
|
9,120
|
(1,749 | ) |
43,504
|
|||||||||||
Provision
for loan losses
|
1,704
|
458
|
-
|
2,162
|
||||||||||||
Net
interest income after provision for loan losses
|
34,429
|
8,662
|
(1,749 | ) |
41,342
|
|||||||||||
Non-interest
income:
|
||||||||||||||||
Service
fees and other charges
|
7,997
|
1,650
|
-
|
9,647
|
||||||||||||
Mortgage
banking income
|
2,780
|
651
|
-
|
3,431
|
||||||||||||
Insurance
commissions
|
4,244
|
-
|
-
|
4,244
|
||||||||||||
Gain
on sale of non-mortgage loans
|
204
|
-
|
-
|
204
|
||||||||||||
Gain
on sale of securities
|
21
|
-
|
-
|
21
|
||||||||||||
Trust
income
|
280
|
-
|
-
|
280
|
||||||||||||
Income
from Bank Owned Life Insurance
|
929
|
-
|
-
|
929
|
||||||||||||
Other
non-interest income
|
407
|
(25 | ) |
-
|
382
|
|||||||||||
Total
non-interest income
|
16,862
|
2,276
|
-
|
19,138
|
||||||||||||
Non-interest
expense:
|
||||||||||||||||
Compensation
and benefits
|
19,610
|
4,541
|
-
|
24,151
|
||||||||||||
Occupancy
|
4,324
|
961
|
-
|
5,285
|
||||||||||||
Data
processing
|
2,838
|
636
|
-
|
3,474
|
||||||||||||
Other
non-interest expense
|
9,178
|
2,169
|
894
|
12,241
|
||||||||||||
Total
non-interest expense
|
35,950
|
8,307
|
894
|
45,151
|
||||||||||||
Income
before income taxes
|
15,341
|
2,631
|
(2,643 | ) |
15,329
|
|||||||||||
Income
tax expense
|
4,995
|
875
|
(925 | ) |
4,945
|
|||||||||||
Net
income
|
$ |
10,346
|
$ |
1,756
|
$ | (1,718 | ) |
10,384
|
||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ |
1.46
|
$ |
2.42
|
$ |
-
|
$ |
1.28
|
||||||||
Diluted
|
$ |
1.44
|
$ |
2.41
|
$ |
-
|
$ |
1.26
|
||||||||
Average
shares outstanding
|
||||||||||||||||
Basic
|
7,101
|
726
|
- | - | ||||||||||||
Retired
-- basic
|
-
|
-
|
(726 | ) | - | |||||||||||
Newly
issued -- basic
|
-
|
-
|
1,031
|
- | ||||||||||||
Resulting
basic
|
-
|
-
|
-
|
8,132
|
||||||||||||
Diluted
|
7,201
|
726
|
-
|
-
|
||||||||||||
Retired
-- diluted
|
-
|
-
|
(726 | ) |
-
|
|||||||||||
Newly
issued -- diluted
|
-
|
-
|
1,031
|
-
|
||||||||||||
Resulting
diluted
|
-
|
-
|
-
|
8,232
|
|
1.
|
Cash
in the amount of $37.50 per share;
and
|
|
2.
|
Shares
of First Defiance common stock based on an exchange ratio of 1.4209
First
Defiance shares for every one share of
Pavilion.
|
(In
thousands)
|
||||
Purchase
Price of Pavilion:
|
||||
Cash
consideration paid for the transaction (including stock
options)
|
$ |
27,882
|
||
Stock
consideration paid for the transaction
|
27,610
|
|||
Total
consideration
|
55,492
|
|||
Capitalized
costs
|
1,982
|
|||
Total
cost
|
$ |
57,474
|
||
Net
historical assets of Pavilion
|
$ |
29,364
|
||
Fair
market value adjustments as of September 30, 2007
|
||||
ESOP
stock put obligation
|
2,711
|
|||
Loans
|
671
|
|||
Goodwill
|
21,010
|
|||
Core
deposit intangible
|
5,000
|
|||
Customer
relationship intangible
|
870
|
|||
Deposits
|
193
|
|||
Federal
Home Loan Bank Advances
|
19
|
|||
Recognition
of deferred tax liability on fair market value adjustments
|
(2,364 | ) | ||
$ |
57,474
|
Employee
severance costs
|
$ |
1,329
|
||
Investment
banking and other fees
|
1,225
|
|||
Deferred
tax benefit
|
(572 | ) | ||
Total
estimated costs, net of tax benefits
|
$ |
1,982
|
For
the Nine
Months Ended September 30, 2007 |
For
the Year
Ended December 31, 2006 |
|||||||
(in
thousands)
|
||||||||
Yield
adjustment on loans
|
$ | (251 | ) | $ | (388 | ) | ||
Yield
adjustment on deposits
|
(106 | ) | (132 | ) | ||||
Yield
adjustment on Federal Home Loan Bank advances
|
(19 | ) | (19 | ) | ||||
Interest
expense on bank debt
|
(1,009 | ) | (1,346 | ) | ||||
Reduction
of interest income on securities used for
consideration
|
(364 | ) | (485 | ) | ||||
Amortization
of core deposit intangible
|
(719 | ) | (946 | ) | ||||
Amortization
of customer relationship intangible
|
(175 | ) | (230 | ) | ||||
Total
pro forma income adjustments
|
(2,643 | ) | (3,546 | ) | ||||
Tax
on pro forma adjustments
|
925
|
1,241
|
||||||
Total
pro forma income adjustments, net
|
$ | (1,718 | ) | $ | (2,305 | ) |
Weighted
Average Remaining Term/
Useful
Life/ Duration
|
Method
of
Amortization
or
Accretion
|
|
Loans
|
1.5
years
|
Level
yield
|
Deposits
|
.5
years
|
Level
yield
|
FHLB
Advances
|
.25
years
|
Level
yield
|
Core
deposit intangibles
|
10
years
|
Accelerated
|
Customer
relationship intangibles
|
7
years
|
Accelerated
|
|
·
|
filing
a written notice of revocation with the Secretary of Pavilion, at
135 East
Maumee Street, Adrian, Michigan
49221;
|
|
·
|
executing
and returning a later-dated proxy received by Pavilion prior to a
vote
being taken at the special meeting;
or
|
|
·
|
attending
the special meeting and giving notice of revocation or simply voting
in
person.
|
·
|
the
financial value of First Defiance’s proposal and the premium that value
represented over the other offers for the acquisition of Pavilion
and over
the then-recent sales of Pavilion common
stock;
|
|
·
|
the
fact that Pavilion shareholders would benefit from the increased
liquidity
of the First Defiance shares to be
received;
|
|
·
|
the
dividend payout and market capitalization of First
Defiance;
|
|
·
|
the
social and economic impact of First Defiance’s proposal on Pavilion and
its employees, customers, suppliers, and the communities in which
Pavilion
and its subsidiaries operate; and
|
|
·
|
the
perception of Pavilion’s Board of Directors of the strategic and
synergistic business opportunities for the combined First Defiance
--
Pavilion organization to grow into an organization that provides
greater
value to its shareholders than the sum of the two previously separate
corporations.
|
|
·
|
the
fact that the market value of the consideration to be received by
Pavilion’s shareholders in the merger represented a premium over other
offers received and reviewed by Pavilion’s Board of Directors and over the
then-recent sales of Pavilion common
stock;
|
|
·
|
the
fact that Pavilion shareholders would benefit from the increased
liquidity
of the First Defiance shares to be
received;
|
|
·
|
the
historical performance of First Defiance and its perceived future
prospects;
|
|
·
|
the
apparent competence, experience, community banking philosophy, and
integrity of First Defiance’s management;
and
|
|
·
|
the
opinion of Donnelly that the financial terms of the merger are fair
to
Pavilion shareholders from a financial point of
view.
|
|
·
|
the
Agreement and Plan of Merger dated October 2,
2007;
|
|
·
|
certain
publicly-available information for Pavilion, including each of the
Annual
Reports to Stockholders and Annual Reports on Form 10-K for the years
ended December 31, 2004, 2005 and 2006 and the quarterly reports
on
Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007 in
addition to Pavilion management’s unaudited balance sheet and statement of
income for the eight months ended August 31,
2007;
|
|
·
|
certain
information, including financial forecasts and projections (and the
assumptions and bases therefor which were deemed reasonable by
management), relating to earnings, assets, liabilities and prospects
of
Pavilion as a stand alone company with the management of Pavilion.
Donnelly confirmed with management that such forecasts and projections
reflected the best currently available estimates and judgments of
management;
|
|
·
|
certain
publicly-available information for First Defiance, including each
of the
Annual Reports to Stockholders and Annual Reports on Form 10-K for
the
years ended December 31, 2004, 2005 and 2006 and the quarterly reports
on
Form 10-Q for the quarters ended March 31, 2007 and June 30,
2007;
|
|
·
|
certain
information, including financial forecasts and projections (and the
assumptions and bases therefore which were deemed reasonable by
management), relating to earnings, assets, liabilities and prospects
of
First Defiance with the management of First Defiance. Donnelly confirmed
with management
that such forecasts and projections reflected the best currently
available
estimates and judgments of
management;
|
|
·
|
the
historical stock prices and trading volumes of Pavilion’s common
stock;
|
|
·
|
the
historical stock prices and trading volumes of First Defiance’s common
stock;
|
|
·
|
the
terms of acquisitions of banking organizations which Donnelly deemed
generally comparable to Pavilion;
|
|
·
|
the
amount and timing of the cost savings, income from additional growth,
and
other expenses and adjustments expected to result from the merger
furnished by senior management of First Defiance and deemed reasonable
by
them;
|
|
·
|
the
financial condition and operating results of First Defiance compared
to
the financial conditions and operating results of certain other financial
institutions that Donnelly deemed comparable;
and
|
|
·
|
such
other information, financial studies, analyses and investigations
and such
other factors that Donnelly deemed relevant for the purposes of its
opinion.
|
As
of August 31, 2007 / For the
Twelve Months Ended August 31, 2007
1
|
|||||||
Deal
Price
|
Price
/
Book
|
Price
/
Tangible
Book |
Price
/
LTM
Earnings |
Price
/
Assets
|
Price
/
Deposits
|
Premium
/ Core
Deposits
|
One-Day
Trading Premium 2 |
$55,490
|
186.7%
|
186.7%
|
23.3x
|
19.2%
|
23.1%
|
15.7%
|
51.1%
|
Footnote:
|
|||||||
1
Although the deal price includes
the cost to cash out current Pavilion options, Donnelly Penman
excluded
this amount from the implied transaction multiples as this value
does not
benefit the individual Pavilion shareholders.
|
|||||||
2
One-day trading premium is based
on Pavilion's common stock trading price as of October 2,
2007.
|
Contribution
Analysis
($'s in thousands) |
||||||||||||||||||
First
Defiance
|
Pavilion
|
Percent
Contribution
|
||||||||||||||||
6/30/2007
|
8/31/2007
|
First
Defiance
|
Pavilion
|
|||||||||||||||
Total
Assets
|
$ |
1,540,675
|
$ |
285,913
|
84.3 | % | 15.7 | % | ||||||||||
Total
Loans,
net
|
1,231,610
|
239,139
|
83.7 | % | 16.3 | % | ||||||||||||
Total
Deposits
|
1,167,198
|
237,273
|
83.1 | % | 16.9 | % | ||||||||||||
Core
Deposits
|
1,023,339
|
162,211
|
86.3 | % | 13.7 | % | ||||||||||||
Total
Equity
|
164,657
|
29,369
|
84.9 | % | 15.1 | % | ||||||||||||
2007E
FYE Net
Income
|
16,230
|
2,253
|
87.8 | % | 12.2 | % | ||||||||||||
2008E
FYE Net
Income
|
16,523
|
2,407
|
87.3 | % | 12.7 | % | ||||||||||||
2009E
FYE Net
Income
|
18,945
|
2,651
|
87.7 | % | 12.3 | % | ||||||||||||
Shares
Outstanding (Proforma
Company)
|
7,178,000
|
1,031,349
|
87.4 | % | 12.6 | % | ||||||||||||
Average
|
85.8 | % | 14.2 | % | ||||||||||||||
Footnotes:
|
||||||||||||||||||
1
|
Source: SNL Securities / SEC Filings (June 30, 2007 10-Q) | |||||||||||||||||
2
|
Source: Pavilion unaudited internal financial statements |
National
Bancorp, Inc. / Antioch Bancshares, Inc.
|
|
Community
Bancshares, Inc. / Salt Creek Valley Bancshares, Inc.
|
|
Southern
Michigan Bancorp, Inc. / FNB Financial Corporation
|
|
Standard
Bancshares, Inc. / Community Bank of Lemont
|
|
Firstbank
Corporation / ICNB Financial Corporation
|
|
Union
County Bancshares, Inc. / Jonesboro Bancompany, Inc.
|
|
Old
National Bancorp / St. Joseph Capital Corporation
|
|
FBOP
Corporation / United Financial Holdings, Inc.
|
|
Park
National Corporation / Anderson Bank Company
|
|
Sky
Financial Group, Inc. / Wells River Bancorp, Inc.
|
|
First
Banks, Inc. / TEAMCO, Inc.
|
|
Castle
Creek Capital III LLC / BB&T Bancshares Corp.
|
|
ChoiceOne
Financial Services, Inc. / Valley Ridge Financial
Corporation
|
|
Commerce
Bancshares, Inc. / West Pointe Bancorp, Incorporated
|
|
Community
Bank Shares of Indiana, Inc. / Bancshares, Incorporated
|
|
First
Mid-Illinois Bancshares, Incorporated / Mansfield Bancorp,
Incorporated
|
|
IBT
Bancorp, Inc. / Farwell State Savings Bank
|
|
German
American Bancorp / Stone City Bancshares, Inc.
|
|
PSB
Bancorp / Oxford Bank Corporation
|
|
Western
Illinois Bancshares Inc. / Midwest Bank of Western
Illinois
|
|
Firstbank
Corporation / Keystone Financial Corporation
|
|
Horizon
Bancorp / Alliance Financial Corporation
|
|
Princeton
National Bancorp, Inc. / Somonauk FSB Bancorp, Inc.
|
|
Sky
Financial Group, Inc. / Belmont Bancorp.
|
|
Peoples
Community Bancorp, Inc. / American State Corporation
|
|
Croghan
Bancshares, Inc. / Custar State Bank
|
|
Illinois
National Bancorp, Inc. / Riverton Community Bank
|
|
Metropolitan
Bank Group, Inc. / Allegiance Community Bank
|
|
Oak
Hill Financial, Inc. / Ripley National Bank
|
|
Metropolitan
Bank Group, Inc. / Citizens Bank Illinois, NA
|
|
Camco
Financial Corporation / London Financial Corporation
|
|
Lincoln
Bancorp / First Shares Bancorp, Inc.
|
|
Harrodsburg
First Financial Bancorp, Inc. / Independence
Bancorp
|
|
·
|
The
transaction price was 186.7% of book value and tangible book value,
compared with the comparable transaction group median of
206.0%;
|
|
·
|
The
transaction price to LTM earnings multiple was 23.3 times, compared
with
the comparable transaction group median of 24.8 times LTM
earnings;
|
|
·
|
The
transaction price was 19.2% of total assets, compared with the comparable
transaction group median of
18.5%;
|
|
·
|
The
transaction price was 23.1% of deposits, compared with the comparable
transaction group median of 22.7%;
|
|
·
|
The
transaction price represented a 15.7% premium to core deposits, compared
with the comparable transaction group median of 13.5%;
and
|
|
·
|
The
transaction price represented a 51.1% one-day trading premium to
Pavilion’s common stock trading price as of October 2, 2007, compared with
the comparable transaction group median of
40.9%.
|
|
·
|
dissolve
Pavilion Financial Services, Inc. and Pavilion Mortgage
Company;
|
|
·
|
terminate
Pavilion’s ESOP and 401(k) plan and repurchase any Pavilion stock owned by
the plans;
|
|
·
|
terminate
Pavilion’s defined benefit (pension)
plan;
|
|
·
|
terminate
its policy regarding employee “banked” paid time off and compensate
employees who have accumulated paid time off to the extent payment
is
required; and
|
|
·
|
terminate
the Pavilion Employee Stock Purchase
Plan.
|
|
·
|
provide
former Pavilion and Bank of Lenawee employees who remain employed
by First
Defiance or First Federal after the merger with compensation and
benefits
that are substantially similar to those provided to similarly situated
First Federal employees;
|
|
·
|
assume
all obligations under existing Pavilion and Bank of Lenawee employment
agreements;
|
|
·
|
if
necessary, file a listing application with NASDAQ for the First Defiance
shares to be issued in the merger;
|
|
·
|
obtain
directors’ and officers’ liability insurance coverage for Pavilion and
Bank of Lenawee officers and directors for five years after the
merger;
|
|
·
|
indemnify
the former directors and officers of Pavilion and Bank of
Lenawee;
|
|
·
|
select
one former Pavilion director to serve on the First Defiance
Board;
|
|
·
|
establish
an advisory board of First Federal of up to six former Pavilion directors;
and
|
|
·
|
pay
a severance payment to each former Pavilion or Bank of Lenawee employee
who is not covered by a written employment or severance agreement
and is
not offered employment by First Defiance or First Federal or is terminated
without cause within 30 days after the
merger.
|
|
·
|
sell,
transfer, mortgage, pledge, or subject to any lien or otherwise encumber
any material amount of assets, except in the ordinary course of
business;
|
|
·
|
make
any capital expenditure that individually exceeds $10,000 or in the
aggregate exceeds $50,000;
|
|
·
|
enter
into any contract, commitment or transaction that would reasonably
be
likely to have a material adverse effect on Pavilion on a consolidated
basis or impair or delay consummation of the transactions contemplated
by
the merger agreement;
|
|
·
|
declare
or pay any dividends on the Pavilion common stock other than quarterly
dividends consistent with past
practice;
|
|
·
|
purchase,
redeem, retire or otherwise acquire any Pavilion common stock, except
for
the redemption of shares of Pavilion common stock held in the Pavilion
ESOP and 401(k) Plan;
|
|
·
|
issue
any shares of Pavilion common stock or grant any option or right
to
acquire any shares of Pavilion common stock, except (a) upon the
valid
exercise of any outstanding options exercisable for shares of Pavilion
common stock, (b) pursuant to the Pavilion Employee Stock Purchase
Plan,
(c) in the form of matching contributions made to the Pavilion ESOP
and
401(k) Plan consistent with past practice, or (d) pursuant to the
Pavilion
Dividend Reinvestment and Stock Purchase
Plan;
|
|
·
|
amend
its articles of incorporation or bylaws or the articles or bylaws
of its
subsidiaries;
|
|
·
|
acquire
any stock or other interest in any other entity, with certain exceptions
in the ordinary course of business;
|
|
·
|
adopt
or amend any employee or director benefit plan, pension, retirement,
stock, profit sharing, or bonus plan or take any action to accelerate
the
vesting of any benefits, except as required by
law;
|
|
·
|
except
as otherwise provided in the merger agreement, enter into or amend
any
employment contract with any of their employees or increase the
compensation payable to any employee or
director;
|
|
·
|
except
in the ordinary course of business consistent with past practice,
borrow
or agree to borrow any funds or directly guarantee or agree to guarantee
any obligations of others;
|
|
·
|
implement
or adopt any change in Pavilion’s accounting principles, practices or
methods, except as may be required by
GAAP;
|
|
·
|
make
or change any tax election or tax accounting method, file any amended
tax
return, settle any tax claim or assessment or consent to the extension
or
waiver of any statute of limitations with respect to
taxes;
|
|
·
|
originate
or issue a commitment to originate any loan or note in an amount
of
$250,000 or more or on an aggregate basis to one borrower of $500,000
or
more or modify, renew or release any collateral on an existing loan
the
outstanding balance of which is $250,000 or
more;
|
|
·
|
establish
any new lending programs or make any policy changes concerning who
may
approve loans;
|
|
·
|
enter
into any securities transactions or purchase or otherwise acquire
any
investment security other than U.S. Government and agency
obligations;
|
|
·
|
increase
or decrease the rate of interest paid on time deposits or certificates
of
deposits except in a manner consistent with past practices and prevailing
rates in Bank of Lenawee’s market;
|
|
·
|
foreclose
upon or otherwise take title or possession of any real property without
first obtaining a Phase I environmental report that indicates the
absence
of a recognized environmental condition; provided, however, that
Bank of
Lenawee will not be required to obtain such a report with respect
to
single-family, non-agricultural residential property of one acre
or less
unless it has reason to believe such property may contain pollutants,
contaminants or other waste
materials;
|
|
·
|
purchase
or acquire any interest in a loan held by a third
party;
|
|
·
|
open
any new branches or loan production offices or close any branch or
loan
production office, except as may be agreed by First
Defiance;
|
|
·
|
increase
the number of directors on the board of directors of Pavilion or
Bank of
Lenawee;
|
|
·
|
except
as permitted by the merger agreement, enter into any contract relating
to
the provision of advisory or consulting services to Pavilion or its
subsidiaries; or
|
|
·
|
agree
to take any of the actions described
above.
|
|
·
|
the
merger agreement is approved by the holders of a majority of the
outstanding shares of Pavilion common
stock;
|
|
·
|
the
parties receive regulatory approval from the
OTS;
|
|
·
|
no
governmental authority prohibits consummation of the
merger;
|
|
·
|
the
shares of First Defiance common stock to be issued in the merger
have been
registered with the Securities and Exchange Commission;
and
|
|
·
|
legal
counsel has provided an opinion with respect to the federal income
tax
consequences of the merger.
|
|
·
|
all
of Pavilion’s representations and warranties in the merger agreement are
true in all material respects as of the effective date of the
merger;
|
|
·
|
Pavilion
satisfies, in all material respects, its obligations in the merger
agreement; and
|
|
·
|
Pavilion
obtains all consents and approvals required in connection with the
transactions contemplated by the merger
agreement.
|
|
·
|
all
of First Defiance’s representations and warranties in the merger agreement
are true in all material respects as of the effective date of the
merger;
|
|
·
|
First
Defiance satisfies, in all material respects, its obligations in
the
merger agreement;
|
|
·
|
First
Defiance obtains all consents and approvals required in connection
with
the transactions contemplated by the merger agreement;
and
|
|
·
|
The
aggregate value of First Defiance common stock to be issued in connection
with the merger is at least 40% of the total consideration to be
paid to
Pavilion shareholders.
|
|
·
|
by
the mutual written consent of First Defiance and
Pavilion;
|
|
·
|
by
either First Defiance or Pavilion if the merger is not consummated
on or
before June 30, 2008;
|
|
·
|
by
either First Defiance or Pavilion if any event occurs which would
preclude
satisfaction of certain conditions set forth in the merger
agreement;
|
|
·
|
by
either First Defiance or Pavilion if Pavilion executes a definitive
agreement whereby some person or entity other than First Defiance
will
acquire all or a material amount of the assets, or any equity securities,
of Pavilion, or Pavilion and such other person or entity will enter
into a
merger, consolidation or business
combination;
|
|
·
|
by
Pavilion if First Defiance does not increase the stock consideration
to be
received by Pavilion shareholders to preserve the tax-free reorganization
status of the merger;
|
|
·
|
by
Pavilion if the Pavilion board of directors reasonably determines
in good
faith, after consultation with Pavilion’s financial advisor and the
written advice of Pavilion’s legal counsel, that failing to terminate the
merger agreement could be expected to constitute a breach of its
fiduciary
duties to the Pavilion
shareholders;
|
|
·
|
by
First Defiance if the cost to perform any environmental remediation
activities set forth in the merger agreement is expected to exceed
$750,000 in the aggregate; or
|
|
·
|
by
Pavilion if (1) the
average closing price of First Defiance common shares for the 20
trading
days ending 10 calendar days before the closing is less than $22.08,
and
(2) First Defiance common shares underperform an index of 16 peer
companies by more than 17.5% as measured by dividing the weighted
average
closing prices of the peer companies on October 2, 2007 against the
weighted average of the closing prices for the 20 trading days ending
10
calendar days before the
closing.
|
|
·
|
No
gain or loss will be recognized by First Defiance or Pavilion as
a result
of the merger.
|
|
·
|
The
tax basis of the assets of Pavilion in the hands of First Defiance
will be
the same as the tax basis of such assets in the hands of Pavilion
immediately prior to the merger.
|
|
·
|
The
holding period of the assets of Pavilion to be received by First
Defiance
will include the period during which such assets were held by
Pavilion.
|
|
·
|
any
merger or consolidation of First Defiance with or into any Related
Person;
|
|
·
|
any
sale, lease, exchange, mortgage, transfer, or other disposition of
all or
more than 25% of the assets of First Defiance or its subsidiaries
to any
Related Person;
|
|
·
|
any
merger or consolidation of a Related Person with First Defiance or
its
subsidiaries;
|
|
·
|
any
sale, lease, exchange, transfer or other disposition of all or more
than
25% of the assets of a Related Person to First Defiance or its
subsidiaries;
|
|
·
|
the
issuance of any securities of First Defiance or its subsidiaries
to a
Related Person;
|
|
·
|
the
acquisition by First Defiance or its subsidiaries of any securities
of the
Related Person;
|
|
·
|
any
reclassification of the First Defiance common stock, or any
recapitalization involving the common stock of First Defiance;
and
|
|
·
|
any
agreement, contract or other arrangement providing for any of the
above
transactions.
|
|
·
|
a
majority of the directors not affiliated with the interested shareholder
approves the transaction;
|
|
·
|
the
transaction is approved by the Pavilion shareholders as otherwise
required
by law or Pavilion’s articles of incorporation;
or
|
|
·
|
the
business combination results in shareholders, other than the interested
shareholder, receiving a fair price plus interest for their shares
of
Pavilion common stock, as determined in accordance with the
statute.
|
|
·
|
one-fifth
or more, but less than one-third, of the voting
power;
|
|
·
|
one-third
or more, but less than a majority, of the voting power;
or
|
|
·
|
a
majority or more of the voting
power.
|
|
·
|
the
board of directors approves the
transaction;
|
|
·
|
the
transaction is approved by the holders of shares with at least two-thirds
of the voting power of the corporation (or a different proportion
set
forth in the articles of incorporation), including at least a majority
of
the outstanding shares after excluding shares controlled by the interested
shareholder; or
|
|
·
|
the
business combination results in shareholders, other than the interested
shareholder, receiving a fair price plus interest for their shares,
as
determined in accordance with the
statute.
|
|
·
|
one-fifth
or more, but less than one-third, of the voting
power;
|
|
·
|
one-third
or more, but less than a majority, of the voting power;
or
|
|
·
|
a
majority or more of the voting
power.
|
First
Defiance Filings (File No. 000-26850)
|
||
Filing
|
Period
of Report or Date Filed
|
|
Annual
Report on Form 10-K
|
Year
ended December 31, 2006
|
|
Quarterly
Reports on Form 10-Q
|
Quarters
ended March 31, June 30, and September 30, 2007
|
|
Current
Reports on Form 8-K
|
Filed
on January 16, February 21, April 3, April 17, July 17, October 1,
October
4, and October 16, 2007
|
|
The
description of First Defiance common stock set forth in the Registration
Statement filed with the SEC on Form 8-A on September 25, 1995, including
any amendment of report filed with the SEC for the purpose of updating
this description.
|
Pavilion
Filings (File No. 000-30521)
|
||
Filings
|
Period
of Report or Date Filed
|
|
Annual
Report on Form 10-K
|
Year
ended December 31, 2006
|
|
Quarterly
Report on Form 10-Q
|
Quarters
ended March 31, June 30, and September 30, 2007
|
|
Current
Reports on Form 8-K
|
Filed
on February 27, March 2, March 26, April 25, May 2, July 26, August
15,
October 3, October 3, October 4, November 2, November 14, and
November 27, 2007.
|
|
The
description of Pavilion’s common stock set forth in the Registration
Statement on Form 10 as filed with the SEC on May 1, 2000,
including any amendment filed with the SEC for the purpose of updating
this description.
|
||
First
Defiance Financial Corp.
601
Clinton Street
Defiance,
Ohio 43512-3272
Attention: John
C. Wahl
(419)
782-5015
|
Pavilion
Bancorp, Inc.
135
East Maumee Street
Adrian,
Michigan 49221
Attention: Richard
DeVries
(517)
265-5144
|
Page
|
||
ARTICLE
ONE -- THE MERGER
|
A-1
|
|
1.01.
|
Corporate
Merger
|
A-1
|
1.02.
|
Effective
Time
|
A-1
|
1.03.
|
Governing
Documents of the Surviving Corporation
|
A-1
|
1.04.
|
Bank
Merger
|
A-2
|
1.05.
|
Structure
of Combination
|
A-2
|
ARTICLE
TWO -- CONVERSION OF SHARES; SURRENDER OF CERTIFICATES
|
A-2
|
|
2.01.
|
Conversion
of Pavilion Shares
|
A-2
|
2.02.
|
Exchange
of Pavilion Certificates
|
A-3
|
2.03.
|
Anti-Dilution
Provisions
|
A-4
|
2.04.
|
First
Defiance Shares
|
A-4
|
2.05.
|
Tax
Consequences
|
A-5
|
ARTICLE
THREE -- REPRESENTATIONS AND WARRANTIES OF PAVILION
|
A-5
|
|
3.01.
|
Corporate
Status
|
A-5
|
3.02.
|
Capitalization
of Pavilion
|
A-6
|
3.03.
|
Capitalization
of Subsidiaries
|
A-7
|
3.04.
|
Corporate
Proceedings
|
A-8
|
3.05.
|
Authorization
|
A-8
|
3.06.
|
Financial
Statements of Pavilion
|
A-8
|
3.07.
|
SEC
Filings
|
A-8
|
3.08.
|
Absence
of Undisclosed Liabilities
|
A-9
|
3.09.
|
Absence
of Changes
|
A-9
|
3.10.
|
Loans
|
A-9
|
3.11.
|
Allowance
for Loan Losses
|
A-9
|
3.12.
|
Reports
and Records
|
A-10
|
3.13.
|
Taxes
|
A-10
|
3.14.
|
Property
and Title
|
A-11
|
3.15.
|
Legal
Proceedings
|
A-12
|
3.16.
|
Compliance
with Laws and Regulations
|
A-12
|
3.17.
|
No
Conflict
|
A-13
|
3.18.
|
Brokers,
Finders and Others
|
A-13
|
3.19.
|
Employment
Agreements
|
A-13
|
3.20.
|
Employee
Benefit Plans
|
A-14
|
3.21.
|
Insurance
|
A-16
|
3.22.
|
Governmental
and Third-Party Consents and Proceedings
|
A-16
|
3.23.
|
Contracts
|
A-16
|
3.24.
|
Environmental
Matters
|
A-16
|
3.25.
|
Pavilion
Information
|
A-17
|
3.26.
|
CRA
Compliance
|
A-17
|
3.27.
|
Ownership
of First Defiance Shares
|
A-18
|
3.28.
|
Fairness
Opinion
|
A-18
|
3.29.
|
Real
Property Interest
|
A-18
|
3.30.
|
Internal
Controls
|
A-18
|
3.31.
|
Knowledge
|
A-18
|
ARTICLE
FOUR -- REPRESENTATIONS AND WARRANTIES OF FIRST DEFIANCE
|
A-18
|
|
4.01.
|
Corporate
Status
|
A-19
|
4.02.
|
Corporate
Proceedings
|
A-19
|
4.03.
|
Capitalization
of First Defiance
|
A-20
|
4.04.
|
Capitalization
of First Federal
|
A-20
|
4.05.
|
Authorized
and Effective Agreement
|
A-21
|
4.06.
|
No
Conflict
|
A-21
|
4.07.
|
SEC
Filings
|
A-22
|
4.08.
|
Financial
Statements of First Defiance and First Federal
|
A-22
|
4.09.
|
Brokers,
Finders and Others
|
A-22
|
4.10.
|
Governmental
and Third-Party Proceedings
|
A-23
|
4.11.
|
Absence
of Undisclosed Liabilities
|
A-23
|
4.12.
|
Absence
of Changes
|
A-23
|
4.13.
|
Legal
Proceedings
|
A-23
|
4.14.
|
Regulatory
Matters
|
A-24
|
4.15.
|
Compliance
with Laws and Regulations
|
A-24
|
4.16.
|
CRA
Compliance
|
A-24
|
4.17.
|
Loans
|
A-25
|
4.18.
|
Allowance
for Loan Losses
|
A-25
|
ARTICLE
FIVE -- FURTHER COVENANTS OF PAVILION
|
A-25
|
|
5.01.
|
Operation
of Business
|
A-25
|
5.02.
|
Notification
|
A-28
|
5.03.
|
Acquisition
Transactions
|
A-29
|
5.04.
|
Delivery
of Information
|
A-29
|
5.05.
|
Affiliates
Compliance with the Securities Act
|
A-29
|
5.06.
|
Voting
Agreement
|
A-30
|
5.07.
|
Amendment
of Pavilion Stock Options
|
A-30
|
5.08.
|
Pavilion
Meeting
|
A-30
|
5.09.
|
Tax
Matters
|
A-30
|
5.10.
|
Insurance
Coverage
|
A-31
|
5.11.
|
Supplemental
Assurances
|
A-31
|
5.12.
|
Subsidiaries
|
A-31
|
5.13.
|
Environmental
Inspection of Property
|
A-31
|
5.14.
|
Employee
Benefit Plans
|
A-32
|
ARTICLE
SIX -- FURTHER COVENANTS OF FIRST DEFIANCE
|
A-33
|
|
6.01
|
Employees;
Employee Benefits
|
A-33
|
6.02.
|
Exchange
Listing
|
A-34
|
6.03.
|
Notification
|
A-34
|
6.04.
|
Board
of Directors
|
A-34
|
6.05.
|
Advisory
Board
|
A-34
|
6.06.
|
Indemnification
|
A-35
|
6.07.
|
Delivery
of and Access to Information
|
A-36
|
6.08.
|
Operation
of Business
|
A-37
|
ARTICLE
SEVEN -- FURTHER OBLIGATIONS OF THE PARTIES
|
A-37
|
|
7.01.
|
Cooperative
Action
|
A-37
|
7.02.
|
Press
Releases
|
A-37
|
7.03.
|
Proxy/Prospectus;
Registration Statement
|
A-37
|
7.04.
|
Regulatory
Applications
|
A-39
|
7.05.
|
Confidentiality
|
A-39
|
7.06.
|
Non-Solicitation
|
A-39
|
ARTICLE
EIGHT -- CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PARTIES
|
A-40
|
|
8.01.
|
Conditions
to the Obligations of First Defiance
|
A-40
|
8.02.
|
Conditions
to the Obligations of Pavilion
|
A-40
|
8.03.
|
Mutual
Conditions
|
A-41
|
ARTICLE
NINE -- CLOSING
|
A-42
|
|
9.01.
|
Closing
|
A-42
|
9.02.
|
Closing
Deliveries Required of First Defiance
|
A-42
|
9.03.
|
Closing
Deliveries Required of Pavilion
|
A-43
|
ARTICLE
TEN -- TERMINATION
|
A-43
|
|
10.01.
|
Termination
|
A-43
|
10.02.
|
Effect
of Termination
|
A-46
|
10.03.
|
Termination
Fee
|
A-46
|
10.04.
|
Force
Majeure
|
A-46
|
ARTICLE
ELEVEN -- MISCELLANEOUS
|
A-47
|
|
11.01.
|
Notices
|
A-47
|
11.02.
|
Counterparts
|
A-48
|
11.03.
|
Entire
Agreement
|
A-48
|
11.04.
|
Successors
and Assigns
|
A-48
|
11.05.
|
Captions
|
A-48
|
11.06.
|
Governing
Law
|
A-48
|
11.07.
|
Payment
of Fees and Expenses
|
A-48
|
11.08.
|
Amendment
|
A-48
|
11.09.
|
Waiver
|
A-48
|
11.10.
|
No
Third-Party Rights
|
A-49
|
11.11.
|
Severability
|
A-49
|
11.12.
|
Non-Survival
of Representations, Warranties and Covenants
|
A-49
|
11.13.
|
Materiality
|
A-49
|
Exhibit
A:
|
Form
of Voting Agreement
|
Peer
Company
|
Percentage
Weightings
|
Camco
Financial Corporation (CAFI)
|
3.1%
|
CFS
Bancorp, Inc. (CITZ)
|
4.9%
|
Citizens
First Bancorp, Inc. (CTZN)
|
4.7%
|
Dearborn
Bancorp, Inc. (DEAR)
|
3.5%
|
First
Financial Corporation (THFF)
|
13.2%
|
Firstbank
Corporation (FBMI)
|
3.9%
|
German
American Bancorp, Inc. (GABC)
|
4.6%
|
Horizon
Bancorp (HBNC)
|
2.7%
|
Lakeland
Financial Corporation (LKFN)
|
9.3%
|
LNB
Bancorp, Inc. (LNBB)
|
3.4%
|
Macatawa
Bank Corporation (MCBC)
|
7.7%
|
MainSource
Financial Group, Inc. (MSFG)
|
10.8%
|
MBT
Financial Corp. (MBTF)
|
6.2%
|
Mercantile
Bank Corporation (MBWM)
|
5.8%
|
Peoples
Bancorp Inc. (PEBO)
|
9.0%
|
United
Community Financial Corp. (UCFC)
|
7.2%
|
100.0%
|
ATTEST:
|
FIRST
DEFIANCE FINANCIAL CORP.
|
||
/s/
John W. Boesling
|
By:
|
/s/
William J. Small
|
|
John
W. Boesling, Secretary
|
William
J. Small, Chairman of the Board
|
||
ATTEST:
|
PAVILION
BANCORP, INC.
|
||
/s/
Eileen Loveland
|
By:
|
/s/
Richard DeVries
|
|
Eileen
Loveland, Secretary
|
Richard
DeVries, President and CEO
|
SHAREHOLDER
|
FIRST
DEFIANCE FINANCIAL
|
|||
CORP.
|
||||
By:
|
||||
Name:
|
||||
Print
Name:
|
Title:
|
|
·
|
the
Agreement and Plan of Merger dated October 2,
2007;
|
|
·
|
certain
publicly-available information for Pavilion, including each of the
Annual
Reports to Stockholders and Annual Reports on Form 10-K for the years
ended December 31, 2004, 2005 and 2006 and the quarterly reports
on
Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007 in
addition to Pavilion management’s unaudited balance sheet and statement of
income for the eight months ended August 31,
2007;
|
|
·
|
certain
information, including financial forecasts and projections (and the
assumptions and bases therefore which were deemed reasonable by
management), relating to earnings, assets, liabilities and prospects
of
Pavilion as a stand alone company with the management of Pavilion.
Donnelly confirmed with management that such forecasts and projections
reflected the best currently available estimates and judgments of
management;
|
|
·
|
certain
publicly-available information for First Defiance, including each
of the
Annual Reports to Stockholders and Annual Reports on Form 10-K for
the
years ended December 31, 2004, 2005 and 2006 and the quarterly reports
on
Form 10-Q for the quarters ended March 31, 2007 and June 30,
2007;
|
|
·
|
certain
information, including financial forecasts and projections (and the
assumptions and bases therefore which were deemed reasonable by
management), relating to earnings, assets, liabilities
and
|
|
prospects
of First Defiance with the management of First Defiance. Donnelly
confirmed with management that such forecasts and projections reflected
the best currently available estimates and judgments of
management;
|
|
·
|
the
historical stock prices and trading volumes of Pavilion’s common
stock;
|
|
·
|
the
historical stock prices and trading volumes of First Defiance’s common
stock;
|
|
·
|
the
terms of acquisitions of banking organizations which Donnelly deemed
generally comparable to Pavilion;
|
|
·
|
the
amount and timing of the cost savings, income from additional growth,
and
other expenses and adjustments expected to result from the Merger
furnished by senior management of First Defiance and deemed reasonable
by
them;
|
|
·
|
the
financial condition and operating results of First Defiance compared
to
the financial conditions and operating results of certain other financial
institutions that Donnelly deemed comparable;
and
|
|
·
|
such
other information, financial studies, analyses and investigations
and such
other factors that Donnelly deemed relevant for the purposes of its
opinion.
|
Exhibit
No.
|
Description
|
|
2
|
Agreement
and Plan of Merger dated as of October 2, 2007, by and between First
Defiance Financial Corp. and Pavilion Bancorp, Inc. (included as
Annex A
to the Prospectus/Proxy Statement included in this Registration
Statement)
|
|
3.1
|
Articles
of Incorporation of First Defiance Financial Corp. (incorporated
by
reference to like numbered exhibit in the Registrant’s Form S-1, file no.
33-93354)
|
|
3.2
|
Code
of Regulations of First Defiance Financial Corp. (incorporated by
reference to like numbered exhibit in the Registrant’s Form S-1, file no.
33-93354)
|
|
4
|
Articles
of Incorporation and Code of Regulations, defining the rights of
shareholders
|
|
5
|
Opinion
of Vorys, Sater, Seymour and Pease LLP regarding legality of the
First
Defiance stock being registered (filed herewith)
|
|
8
|
Opinion
of Vorys, Sater, Seymour and Pease LLP as to federal income tax matters
(filed herewith)
|
|
10.1
|
1996
Stock Option Plan (incorporated by reference to like numbered exhibit
in
Registrant’s 2001 Form 10-K, film no. 02580719)
|
|
10.2
|
Form
of Incentive Stock Option Award Agreement (incorporated by reference
to
like numbered exhibit in Registrant’s 2004 Form 10-K, film no.
05685500)
|
|
10.3
|
Form
of Nonqualified Stock Option Award Agreement (incorporated by reference
to
like numbered exhibit in Registrant’s 2004 Form 10-K, film no.
05685500)
|
|
10.4
|
1996
Management Recognition Plan and Trust (incorporated by reference
to like
numbered exhibit in Registrant’s 2001 Form 10-K, film no.
02580719)
|
|
10.5
|
2001
Stock Option and Incentive Plan (incorporated by reference to Appendix
B
to the 2001 Proxy Statement, film no.
1577137)
|
Exhibit No. |
Description
|
|
10.6
|
1993
Stock Incentive Plan (incorporated by reference to like numbered
exhibit
in Registrant’s Form S-1, film no. 33-93354)
|
|
10.7
|
Employment
Agreement with William J. Small (incorporated by reference to Exhibit
10.7
in Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.8
|
Employment
Agreement with James L. Rohrs (incorporated by reference to Exhibit
10.8
in Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.9
|
Employment
Agreement with John C. Wahl (incorporated by reference to Exhibit
10.9 in
Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.10
|
Employment
Agreement with Gregory R. Allen (incorporated by reference to Exhibit
10.10 in Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.11
|
Description
of Annual Bonus (incorporated by reference to like numbered exhibit
in
Registrant’s 2005 Form 10-K, film no. 06682169)
|
|
10.12
|
2005
Stock Option and Incentive Plan (incorporated by reference to Appendix
A
to the 2005 Proxy Statement, film no. 05692264)
|
|
21
|
Subsidiaries
of First Defiance (incorporated by reference to like numbered exhibit
in
the Registrant’s 2006 Form 10-K, film no. 07696842)
|
|
23.1
|
Consent
of Crowe Chizek and Company LLC (filed herewith)
|
|
23.2
|
Consent
of Ernst & Young LLP (filed herewith)
|
|
23.3
|
Consent
of Plante & Moran, PLLC (filed herewith)
|
|
23.4
|
Consent
of Vorys, Sater, Seymour and Pease LLP (included in Exhibits 5 and
8)
|
|
23.5
|
Consent
of Donnelly, Penman & Partners (included in Annex B to the
Prospectus/Proxy Statement included in this Registration
Statement)
|
|
99
|
Form
of Proxy for Pavilion Bancorp, Inc. (filed
herewith)
|
(b)
|
Financial
Statement Schedules
|
(c)
|
Report,
Opinion or Appraisal
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which,
|
|
individually
or in the aggregate, represent a fundamental change in the information
set
forth in the registration statement. Notwithstanding the foregoing,
any
increase or decrease in volume of securities offered (if the total
dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the
Securities and Exchange Commission pursuant to Rule 424(b) if, in
the
aggregate, the changes in volume and price represent no more than
a 20%
change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration
statement; and
|
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
First
Defiance Financial Corp.
|
|||
By:
|
/s/
William J. Small
|
||
William
J. Small,
|
|||
Chairman,
President and
|
|||
Chief
Executive Officer
|
|||
By
|
/s/
John C. Wahl
|
By
|
/s/ James L. Rohrs
|
|
John
C. Wahl,
Executive
Vice President and
Chief
Financial Officer
|
James
L. Rohrs,
Director,
Executive Vice President
|
|||
By
|
/s/
Stephen L. Boomer
|
By
|
|
|
Stephen
L. Boomer,
Director,
Vice Chairman
|
John
L. Bookmyer,
Director
|
|||
By
|
/s/
Dr. Douglas A. Burgei
|
By
|
||
Dr.
Douglas A. Burgei,
Director
|
Peter
A. Diehl,
Director
|
|||
By
|
/s/
Dr. John U. Fauster, III
|
By
|
/s/
Dwain I. Metzger
|
|
Dr.
John U. Fauster, III,
Director
|
Dwain
I. Metzger,
Director
|
|||
By
|
/s/
Gerald W. Monnin
|
By
|
||
Gerald
W. Monnin,
Director
|
Samuel
S. Strausbaugh,
Director
|
|||
By
|
/s/
Thomas A. Voigt
|
|||
Thomas
A. Voigt,
Director
|
Exhibit
No.
|
Description
|
|
2
|
Agreement
and Plan of Merger dated as of October 2, 2007, by and between First
Defiance Financial Corp. and Pavilion Bancorp, Inc. (included as
Annex A
to the Prospectus/Proxy Statement included in this Registration
Statement)
|
|
3.1
|
Articles
of Incorporation of First Defiance Financial Corp. (incorporated
by
reference to like numbered exhibit in the Registrant’s Form S-1, file no.
33-93354)
|
|
3.2
|
Code
of Regulations of First Defiance Financial Corp. (incorporated by
reference to like numbered exhibit in the Registrant’s Form S-1, file no.
33-93354)
|
|
4
|
Articles
of Incorporation and Code of Regulations, defining the rights of
shareholders
|
|
Opinion
of Vorys, Sater, Seymour and Pease LLP regarding legality of the
First
Defiance stock being registered (filed herewith)
|
||
Opinion
of Vorys, Sater, Seymour and Pease LLP as to federal income tax matters
(filed herewith)
|
||
10.1
|
1996
Stock Option Plan (incorporated by reference to like numbered exhibit
in
Registrant’s 2001 Form 10-K, film no. 02580719)
|
|
10.2
|
Form
of Incentive Stock Option Award Agreement (incorporated by reference
to
like numbered exhibit in Registrant’s 2004 Form 10-K, film no.
05685500)
|
|
10.3
|
Form
of Nonqualified Stock Option Award Agreement (incorporated by reference
to
like numbered exhibit in Registrant’s 2004 Form 10-K, film no.
05685500)
|
|
10.4
|
1996
Management Recognition Plan and Trust (incorporated by reference
to like
numbered exhibit in Registrant’s 2001 Form 10-K, film no.
02580719)
|
|
10.5
|
2001
Stock Option and Incentive Plan (incorporated by reference to Appendix
B
to the 2001 Proxy Statement, film no. 1577137)
|
|
10.6
|
1993
Stock Incentive Plan (incorporated by reference to like numbered
exhibit
in Registrant’s Form S-1, film no. 33-93354)
|
|
10.7
|
Employment
Agreement with William J. Small (incorporated by reference to Exhibit
10.7
in Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.8
|
Employment
Agreement with James L. Rohrs (incorporated by reference to Exhibit
10.8
in Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.9
|
Employment
Agreement with John C. Wahl (incorporated by reference to Exhibit
10.9 in
Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.10
|
Employment
Agreement with Gregory R. Allen (incorporated by reference to Exhibit
10.10 in Registrant’s Form 8-K filed on October 1, 2007, film no.
071144951)
|
|
10.11
|
Description
of Annual Bonus (incorporated by reference to like numbered exhibit
in
Registrant’s 2005 Form 10-K, film no. 06682169)
|
|
10.12
|
2005
Stock Option and Incentive Plan (incorporated by reference to Appendix
A
to the 2005 Proxy Statement, film no. 05692264)
|
|
21
|
Subsidiaries
of First Defiance (incorporated by reference to like numbered exhibit
in
the Registrant’s 2006 Form 10-K, film no. 07696842)
|
|
Consent
of Crowe Chizek and Company LLC (filed
herewith)
|
Exhibit
No.
|
Description
|
|
Consent
of Ernst & Young LLP (filed herewith)
|
||
Consent
of Plante & Moran, PLLC (filed herewith)
|
||
23.4
|
Consent
of Vorys, Sater, Seymour and Pease LLP (included in Exhibits 5 and
8)
|
|
Consent
of Donnelly, Penman & Partners (included in Annex B to the
Prospectus/Proxy Statement included in this Registration
Statement)
|
||
Form
of Proxy for Pavilion Bancorp, Inc. (filed
herewith)
|