Premier Community Bankshares (NASDAQ:PREM)
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Premier Community Bankshares, Inc. (NASDAQ:PREM) and
Albemarle First Bank (NASDAQ: AFBK) announced today
that they have entered into a definitive agreement providing for the
merger of the two companies.
Under the terms of the transaction, Albemarle First will merge
into Rockingham Heritage Bank, a wholly owned subsidiary of Premier,
and continue operations as Albemarle First Bank, a separate division
of Rockingham Heritage. The merger will result in an institution with
combined assets of over $800 million and a network of 22 full-service
banking locations in Virginia and West Virginia.
Donald L. Unger, Premier's President and Chief Executive Officer,
stated "The Charlottesville market has been a strategic priority for
Premier Community Bankshares and, with Albemarle First Bank, we have
found an excellent partner. Over the next five years, growth in the
greater Charlottesville area is expected to exceed that of Virginia
and be commensurate with the high growth in our current market areas."
John K. Stephens, President and Chief Executive Officer of Rockingham
Heritage Bank, added, "We believe that, by combining Rockingham
Heritage's retail banking model with Albemarle First's market
knowledge and lending expertise, Albemarle First Bank can become the
premier community bank in the Charlottesville area, and that is our
goal."
Thomas M. Boyd, Jr., Albemarle First Bank's President and Chief
Executive Officer stated, "We are delighted to partner with Premier,
an outstanding bank holding company with an excellent track record of
enhancing shareholder value. By joining with Premier, Albemarle First
Bank will be able to offer a greater array of products and services to
our loyal customer base. We will also have greater access to capital
to support our growth plans in the greater Charlottesville area as
well as the expanding credit needs of our customers."
Under the terms of the merger agreement, Premier will issue to the
shareholders of Albemarle First, for each share of Albemarle First
common stock that they own, a number of shares of Premier common stock
with an aggregate market value equal to $15.80 per share or $15.80 in
cash, subject to the limitation that no less than 35% and no more than
50% of the total consideration will be in the form of cash.
Shareholders of Albemarle First may elect to receive Premier common
stock, cash, or a combination of common stock and cash for their
shares of Albemarle First common stock, subject to pro ration in the
event that the aggregate cash elections are less than the 35% minimum
or exceed the 50% maximum.
The actual number of shares of Premier common stock to be issued
in the transaction for each share of Albemarle First common stock will
be determined based upon the average closing prices of Premier common
stock over a period of time preceding the closing of the transaction
and, subject to certain exceptions described in the definitive
agreement, will not exceed 0.8681, or be less than 0.6529, shares of
Premier common stock for each share of Albemarle First common stock.
The merger is expected to close in the second quarter of 2006. The
transaction has been approved by the boards of directors of both
companies and is subject to the approval of Albemarle First's
shareholders and customary regulatory approvals.
The transaction has been valued at approximately $29 million. The
transaction value reflects the assumption by Premier of all
outstanding Albemarle First stock options and the exercise or
cancellation prior to the closing of the transaction of all warrants
to acquire Albemarle First common stock that are currently
outstanding. The transaction is expected to be accretive to Premier's
cash earnings per share in the first full year of combined operations,
exclusive of non-recurring restructuring costs, and accretive to both
cash and reported earnings per share in 2007. Premier expects to
achieve annualized pre-tax cost savings and revenue enhancements of
approximately $1.7 million, which are expected to be fully phased-in
over the one-year period following closing.
Three members of Albemarle First's board of directors will join
the Rockingham Heritage board, including Mr. Boyd. Mr. Boyd will also
join the board of Premier, and a separate advisory board of Albemarle
First will be established for the greater Charlottesville market.
Davenport & Company LLC served as financial advisor and Williams
Mullen served as legal advisor to Premier. Anderson & Strudwick, Inc.
served as financial advisor and Troutman Sanders LLP served as legal
advisor to Albemarle First.
Premier is the holding company for the Marathon Bank and
Rockingham Heritage in Virginia and Premier Bank in West Virginia and
has total assets of $665 million as of September 30, 2005. The three
subsidiary banks have 19 branch offices serving the Shenandoah Valley
region of Virginia and the eastern panhandle of West Virginia.
Albemarle First has three branches in the Charlottesville, Virginia
area and has total assets of $120 million as of September 30, 2005.
Information about Premier and Albemarle First
Premier will file with the Securities and Exchange Commission a
registration statement on Form S-4 to register the shares of Premier's
common stock to be issued to the shareholders of Albemarle First in
connection with the proposed transaction. The registration statement
will include a proxy statement/prospectus that will be sent to the
shareholders of Albemarle First seeking their approval of the proposed
merger. The proxy statement/prospectus will contain important
information about Premier, Albemarle First and the merger and about
the persons soliciting proxies from Albemarle First's shareholders in
the merger, including the officers and directors of Albemarle First,
and their interests in the merger, such as their stock ownership in
Albemarle First. Additional information about Albemarle First's
directors and executive officers is included in Albemarle First's
Annual Report on Form 10-KSB for the year ended December 31, 2004, as
amended, which was filed with the Board of Governors of the Federal
Reserve System and is available on Albemarle First's website at
www.albemarlefirstbank.com and at the Albemarle First address provided
below.
Premier and Albemarle First urge the shareholders of Albemarle
First and other investors to read the registration statement on Form
S-4 and the proxy statement/prospectus included in the registration
statement on Form S-4, and any other relevant documents to be filed
with the SEC in connection with the proposed transaction, because they
will contain important information about Premier, Albemarle First and
the proposed transaction.
Shareholders and investors may obtain free copies of the proxy
statement/prospectus and other documents related to the merger, once
they are filed with the SEC, through the SEC's web site at
www.sec.gov. Free copies of the proxy statement/prospectus and other
relevant documents also may be obtained by directing a request by
telephone or mail to the following:
-0-
*T
Premier Community Bankshares, Inc. Albemarle First Bank
4095 Valley Pike P.O. Box 7704
Winchester, Virginia 22602 Charlottesville, Virginia 22906
Attention: Frederick A. Board, CFO Attention: Thomas M. Boyd, Jr.
Telephone Number: (540)869-6600 Telephone Number: (434)973-1664
*T
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended.
The statements relate to, among other things, the anticipated closing
date of the transaction, the expected pro forma effect of the
transaction on the earnings per share of Premier, and plans and
objectives of Premier's management for future operations of the
combined organization following consummation of the transaction. These
forward-looking statements are based on current expectations that
involve a number of risks and uncertainties. Actual results may differ
materially from the results expressed in these forward-looking
statements. Factors that might cause such a difference include: the
ability of the companies to obtain the required shareholder or
regulatory approvals for the transaction; the ability of the companies
to consummate the transaction; the ability to successfully integrate
the companies following the transaction; a material adverse change in
the financial condition, results of operations or prospects of either
company; the ability to fully realize the expected cost savings and
revenues or the ability to realize them on a timely basis; the risk of
borrower, depositor and other customer attrition after the transaction
is completed; a change in general business and economic conditions;
changes in the interest rate environment, deposit flows, loan demand,
real estate values, and competition; changes in accounting principles,
policies or guidelines; changes in legislation and regulation; other
economic, competitive, governmental, regulatory, geopolitical, and
technological factors affecting the companies' operations, pricing,
and services; and other risk factors referred to from time to time in
filings made by Premier with the Securities and Exchange Commission
and Albemarle First with the Board of Governors of the Federal Reserve
System. Premier and Albemarle First undertake no obligation to update
or clarify these forward-looking statements, whether as a result of
new information, future events or otherwise.