Fifth Third Bank

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Buyer:Fifth Third Bancorp, Cincinnati, OH
Seller:CNB Bancshares, Inc., Evansville, IN
Transaction SummaryTop
Fifth Third Bancorp has acquired CNB Bancshares, Inc. and its subsidiary, Civitas Bank, for approximately $2.47 billion in common stock including options and convertible debentures. CNB, headquartered in Evansville, IN, has $7.2 billion in assets and is the largest independent bank holding company based in Indiana. Civitas Bank has 145 banking offices and operates 200 ATMs predominantly in Indiana with a presence in Michigan, Kentucky and Illinois as well. As a result of the acquisition, Fifth Third Bank will become the third largest bank in Indiana with combined total assets of $6.8 billion, deposits of $4.4 billion and a 6.4% statewide market share. The transaction is a tax-free, stock-for-stock fixed exchange of 0.8825 shares of Fifth Third common stock for each outstanding share of CNB and will be accounted for as a pooling-of-interests. The transaction is expected to be accretive to Fifth Third's 2000 earnings, and the company expects to take an estimated one-time, merger-related, after-tax charge of $55 million in 1999. In connection with the transaction CNB has granted Fifth Third an option (exercisable under certain circumstances on 6.9 million CNB shares.) CNB delivered a record 24% increase in first quarter 1999 diluted net income per share of $.68 over first quarter 1998. Its net income was $24.6 million; return on assets was 1.39%; return on equity was 19.32% and its revenue growth was 15% over the same period. CNB Bancshares has a 54% efficiency ratio and its systems are Y2K ready. The transaction was completed on October 29, 1999.
Transaction DataTop
Announcement Date06/16/99
Accounting TypePooling
Consideration TypeCommon Stock,Convert Debt
Reason for TransactionIn-market expansion
Percent of Target Common Shrs Acquired100
Number of Target CommonShrs Acquired34,636,964
Number of Buyer Common Shrs Issued30,567,121
Number of Buyer Preferred Shrs IssuedN/A
Buyer/Target Exchange Ratio(s)
Common Stock:Common Stock.8825
Common Stock:Preferred StockN/A
Preferred Stock:Common StockN/A
Preferred Stock:Preferred StockN/A
Payment In: (At Announcement Date)
Cash ($000)0
Common Stock ($000)2,085,772
Debt ($000)0
Convertible Debt ($000)172,500
Pref Stock ($000)0
Convertible Preferred Stock ($000)0
Other Consider ($000)0
Earnout Consideration Value ($000)N/A
Collar/Cuff?No
Collar Cuff Agreement Description:
N/A
Completion Date10/29/99
Transaction StatusCompleted
Transaction Revised?No
Revision DateN/A
Merger of Equals?Yes
Hostile/Unsolicited?No
Transaction Started as Rumor?No
Termination Fee ($000)N/A
Goodwill Created ($000)1,990,279.00
Core Deposit Intangibles Created ($000)N/A
Target's Current Year EPS Estimate2.81
Target's Next Year EPS Estimate3.08
Target's Common Stock Options1,246,414
Average Strike Price of Options ($)31.78
Target's Conv Pref Equity ($000)N/A
Pref Eqty Equiv Convert Cmn ShrsN/A
Target's Convertible Debt ($000)172,500
Conv Debt Equiv Convert Cmn Shrs3,336,150
Lock-up Agreement?Yes
Number of Shares Under Option6,921,479
Percent of Outstanding Shares20
Exercise Price per Share ($)42.96
Lock-Up Agreement Description:
 In connection with the transaction CNB has granted Fifth Third an option (exercisable under certain circumstances on 6.9 million CNB shares.)
Cost SavingsTop
$40 million or 20% of CNB's annual costs, including $29 million in salary cuts
Transaction PricingTop
 At Announcement DateAt Completion Date
Total Purchase Price ($000)2,293,0452,470,315
Payment in Common Stock ($000)2,085,7722,256,236
Purchase Price Per Share ($)59.6865.14
Price to Equity (x)4.355.15
Price to Tangible Equity Excl MSR(x)4.825.75
Price to LTM Net Inc. (x)N/AN/A
Price/Current Yr Earn Est(x)21.2423.18
Price to Next Yr Earn Est(x)19.3821.15
Price to Assets (%)32.1132.10
Price to Deposits (%)46.2550.56
Premium to Core Deposits(%)39.4644.80
Transaction AdvisersTop
Financial Advisers:Citigroup Global Marketsyes
Legal Advisers:Cleary, Gottlieb, Steen & Hamiltonyes
Legal Advisers:Graydon, Head, & Richeyyes
Financial Advisers:Donaldson Lufkin & Jenrette Securitiesyes
Legal Advisers:Lewis, Rice & Fingersh, L.C.yes
Legal Advisers:Skadden, Arps, Slate, Meagher & Flom LLPno
Target Performance DataTop
Company:CNB Bancshares, Inc.
Institution TypeHolding Co
Regulatory ID Number1099467
TickerBNK
CUSIP12612610
Stock ExchangeNew York Stock Exchange
Primary SIC Code6021
Street Address20 NW Third St
Phone Number(812) 456-3400
# of Employees2,849
# of Branches145
NationMidwest
RegionUnited States
Financial Data SourceSEC Filings
Financial DataTop
Prior to AnnouncementPrior to Completion
12/31/9812/31/9812/31/9806/30/99
Total Assets ($000)7,141,797N/A7,141,7977,695,661
Total Deposits ($000)4,958,337N/A4,958,3374,885,501
Total Core Deposits ($000)4,604,640N/A4,604,6404,555,728
Total Equity ($000)527,046N/A527,046480,036
Intangible Assets ($000)51,185N/A51,18550,503
Tang Eq Capital Excl MSR ($000)475,861N/A475,861429,533
LTM Net Income ($000)N/AN/AN/AN/A
Shares Outstanding35,217,000N/A35,217,00034,764,000
Total Equity/Assets (%)7.38N/A7.386.24
Tang Eq Inc MSR/Assets (%)6.66N/A6.665.58
Book Value Per Share ($)14.97N/A14.9713.81
LTM Earnings Per Share ($)N/AN/AN/AN/A
NPA/Total Assets (%).65N/A.65.61
LLR/NPL (%)132.00N/A132.00137.47
YTD Net Income ($000)61,571N/A61,57148,534
Annualized ROA.92N/A.921.34
Annualized ROE11.99N/A11.9919.04
LTM Operating Expense/AAN/AN/AN/AN/A
LTM Noninterest Income/AAN/AN/AN/AN/A
LTM Efficiency Ratio (%)N/AN/AN/AN/A
Data Provided by Thomson Reuters Bank Insight