SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Earliest Event Reported - July 1, 1994
FIRST VIRGINIA BANKS, INC.
(Exact name of registrant as specified in its charter)
Virginia 1 - 6580 54-0497561
(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
6400 Arlington Boulevard Falls Church Virginia 22042
(Address off principal executive offices) (Zip Code)
(703) 241-3656
(Registrant's telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report)
The exhibit index as required by item 601(a) of Regulation S-K is
included on page 4 of this report.
This report contains a total of 7 pages.
Item 5. OTHER EVENTS
First Virginia Banks, Inc. ("First Virginia") is filing this
Form 8-K to disclose that on July 1, 1994, First Virginia and
Farmers National Bancorp ("Bancorp") reached an Agreement and Plan
of Reorganization ("Agreement") under which Bancorp agreed to be
merged into First Virginia. Under the Agreement, shareholders of
Bancorp will receive 1.5 shares of First Virginia Common Stock for
each of their 2,699,056 outstanding shares. Up to 30% of the
outstanding Bancorp Common Stock may be exchanged for $58.53 in
cash at the option of Bancorp's shareholders.
Bancorp operates three banks: the fifteen office, $627
million Farmers National Bank of Maryland which possesses the lead
market share in the Annapolis area; the four office, $54 million
Atlantic National Bank which operates in the Ocean City and
Salisbury, Maryland areas; and the one office, $29 million Caroline
County Bank which operates in Greensboro, Maryland. The Agreement
states that all three of these banks will become state-chartered
Federal Reserve member banks and also wholly owned subsidiaries of
First Virginia.
First Virginia will issue up to 4,048,584 shares to Bancorp
shareholders depending on the percentage of shareholders electing
cash. For those shareholders electing to receive First Virginia
Common Stock, the exchange should be tax-free. In connection with
this merger, First Virginia will purchase up to 2,700,000 of its
shares and will treat the transaction as a purchase.
The transaction is subject to the completion of a due
diligence review by First Virginia and to approval by Bancorp
shareholders, as well as state and federal regulatory authorities.
It is intended that the merger will occur some time in the fourth
quarter of 1994.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description of Exhibit
1 Press Releases dated July 1, 1994
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
FIRST VIRGINIA BANKS, INC.
(Registrant)
Date: July 7, 1994 By /s/ Barry J. Fitzpatrick
Barry J. Fitzpatrick, Executive
Vice President
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page
1 Press Releases dated July 1, 1994 5
EXHIBIT 1
#2250
FOR IMMEDIATE RELEASE Contact: Richard F. Bowman
July 1, 1994 (703) 241-3685 (Falls Church)
OR
John M. Suit, II
(410) 263-2603 (Annapolis)
FARMERS NATIONAL BANCORP TO MERGE WITH FIRST VIRGINIA BANKS, INC.
The directors of Farmers National Bancorp, a $709 million multi-bank
holding company headquartered in Annapolis, Maryland have agreed to affiliate
with First Virginia Banks, Inc., a $7.2 billion multi-bank holding company
headquartered in Fairfax, Virginia. The announcement was made jointly today
by Charles L. Schelberg, Chairman of the Board, and John M. Suit, II,
President and Chief Executive Officer, of Farmers National, and Robert H.
Zalokar, Chairman and Chief Executive Officer of First Virginia. Farmers
National Bancorp operates three banks: the 15 office, $627 million Farmers
National Bank of Maryland which possesses the leading market share in the
Annapolis area; the four office, $54 million Atlantic National Bank which
operates in the Ocean City and Salisbury areas; and the one office, $29
million Caroline County Bank which operates in Greensboro, Maryland.
Shareholders of Farmers National Bancorp will receive 1.5 shares of
First Virginia common stock for each of their 2,699,056 outstanding shares.
Up to 30% of the outstanding shares may be exchanged for $58.53 in cash at
the option of Farmer's shareholders. Based on the most recent closing price
of First Virginia, the value per share of Farmers National is approximately
$56.28 and aggregates $151.9 million. The price is approximately 2.03 times
the estimated book value of Farmers National at the time of the merger in
late 1994 and is 16.2 times Farmer's estimated 1994 earnings per share.
First Virginia will issue up to 4,048,584 shares to Farmers National
shareholders depending on the percentage of shareholders electing cash. For
those shareholders electing to receive First Virginia stock the exchange will
be tax-free. In connection with this merger, First Virginia will repurchase
up to 2,700,000 of its shares and will treat the transaction as a purchase.
The combined organization will have a Tier I capital ratio of approximately
14.7%, a total capital ratio of 16.0% and a leverage ratio of 8.5%, which are
among the highest of all banks in the country.
For the year ended December 31, 1993, Farmers National produced a return
on assets of 1.4% and a return on equity of 14.2%. First Virginia expects a
combination of growth, additional product offerings and cost savings to
absorb the initial dilution of 1.5% within two years, after which there will
be a positive addition to earnings per share.
Messrs. Suit and Zalokar stated that a definitive agreement had been
entered into and that the transaction is subject to completion of a due
diligence review and to approval by Farmers National Bancorp shareholders as
well as state and federal regulatory authorities. Following the merger,
which will occur as early as the fourth quarter of 1994, Farmers National
Bank of Maryland will continue to operate as a separate member bank within
the First Virginia group under the name of Farmers Bank of Maryland. John H.
Suit, II, President and Chief Executive Officer of the bank, will continue in
that capacity with Farmers.
Mr. Suit commented that the affiliation with the oldest major bank
holding company in Virginia would enable Farmers National to improve the
already excellent service provided to its customers by taking advantage of
the greater resources of First Virginia in serving the needs of its customers
in the Maryland market.
Mr. Zalokar commented that the affiliation with Farmers National
represented an entry into several of the most attractive markets in the
region. In addition to containing some of the highest income and growth
characteristics in the nation, Mr. Zalokar noted that the markets served by
Farmers National logically complemented and significantly improved the First
Virginia presence in Maryland.
First Virginia's return on assets and capital ratios have made it the
most profitable and best capitalized major banking company in Virginia for
the last decade. First Virginia common stock is traded on the New York and
Philadelphia Stock Exchanges. There are currently 20 member banks within the
group: 14 banks in Virginia with 269 offices; two banks with 37 offices in
the Maryland suburbs of Baltimore and Washington; and four banks with 23
offices in east Tennessee. On June 17, 1994, FNB Financial Corporation in
Knoxville, Tennessee affiliated with First Virginia. First Virginia and its
lead bank also have mortgage and insurance subsidiaries with offices in seven
states from New Jersey to North Carolina.
# # #
Falls Church, Virginia
#2251
JULY 1, 1994 CONTACT: Richard F. Bowman
FOR IMMEDIATE RELEASE
(703) 241-3685
FIRST VIRGINIA ANNOUNCES INCREASE IN STOCK REPURCHASE PROGRAM
The Board of Directors of First Virginia Banks, Inc. has authorized the
purchase of up to 2,700,000 shares of First Virginia Banks, Inc. common
stock. This program replaces the program announced earlier this year to
purchase up to 1,000,000 shares of First Virginia Banks, Inc. common stock
and will be used for various corporate purposes other than for the Dividend
Reinvestment and Stock Purchase Plan of the Corporation. It is expected that
the shares will be purchased over the next twelve months through open market
purchases. Currently there are 32,425,000 shares of common stock outstanding
Initially, purchased shares will be used in connection with the proposed
acquisition of Farmers National Bancorp, a $709 million asset, multi-bank
holding company headquartered in Annapolis, Maryland which was also announced
today.
First Virginia common stock is traded on the New York and Philadelphia
Stock Exchanges. There are currently 20 member banks within the group, 14 of
which operate 269 offices in Virginia, two banks with 37 offices in the
Maryland suburbs of Baltimore and Washington, and four banks with 23 offices
in east Tennessee. On June 17, 1994 FNB Financial Corporation in Knoxville,
Tennessee affiliated with First Virginia. First Virginia and its lead bank
also have mortgage and insurance subsidiaries with offices in seven states
from New Jersey to North Carolina.
Falls Church, Virginia