EXHIBIT 8
FORM OF OPINION TO BE PROVIDED BY
MILES & STOCKBRIDGE, A PROFESSIONAL CORPORATION
_____________, 199_
Farmers National Bancorp
5 Church Circle
Annapolis, Maryland 21401
Ladies and Gentlemen:
We have acted as tax counsel to you in connection with the merger
(the "Merger") of Farmers National Bancorp ("Bancorp") with and into
First Virginia Banks, Inc. ("First Virginia") pursuant to and in
accordance with the terms and conditions of the Agreement and Plan of
Reorganization dated as of July 1, 1994 between Bancorp and First
Virginia and the Plan of Merger dated as of July 1, 1994
between Bancorp and First Virginia (collectively, the "Affiliation
Agreement"). Pursuant to the Affiliation Agreement, on the Effective
Date (as that term is defined in the Affiliation Agreement) the Merger
will be consummated. You have requested our opinion regarding certain
of the federal income tax consequences of the Merger.
All capitalized terms used in this letter without
definition shall have the respective meanings specified in the
Affiliation Agreement.
In rendering the opinions expressed in this letter, we have
examined and relied upon such documents as we have deemed appropriate,
including the Affiliation Agreement.
In our examination of documents, we have assumed, with your
consent, that all documents submitted to us as photocopies or by
telecopy faithfully reproduce the originals thereof, that all original
documents are authentic, that all documents submitted to us have been
duly executed and validly signed by all parties thereto to the extent
required in substantially the same form as they have been provided to
us, that all signatures on all documents submitted to us are genuine,
that all natural persons who executed any of the documents submitted
to us had, at the time of execution, legal capacity, that each
executed document constitutes the legal, valid, binding and enforceable
agreement of the signatory parties, that all representations and
statements set forth in such documents are and will remain true,
correct, and complete, and that all obligations imposed on the
parties by any of the documents have been or will be performed or
satisfied in accordance with their terms. We have further assumed
that you have disclosed to us all of the documents that are relevant
to the transactions that are the subject of this opinion.
We also have obtained such additional information and
representations as we have deemed relevant and necessary through
consultations with various representatives of Bancorp and First
Virginia. Likewise, we have obtained a written certificate from certain
officers of Bancorp to verify certain relevant facts that have been
represented to us or that we have been authorized to assume in rendering
this opinion.
Based upon the aforementioned consultations and certificates, we
have assumed with your authorization that the following representations
are true on the date hereof and will be true on the Effective Date.
1. Bancorp will pay its own expenses, if any, incurred in
connection with the Merger.
2. The fair market value of the consideration to be
received by each Bancorp shareholder in the Merger will be
approximately equal to the fair market value of the Bancorp Common
Stock surrendered in the exchange.
3. There is no person who is the beneficial owner of five
percent or more of Bancorp Common Stock.
4. The management of Bancorp is not aware of any present plan
or intention on the part of the Bancorp shareholders to sell,
exchange, or otherwise dispose of a number of shares of First Virginia
Common Stock received in the Merger that would reduce the Bancorp
shareholders' ownership of First Virginia Common Stock to a number
of shares having a value, as of the date of the Merger, of less than
50 percent of the value of all of the formerly outstanding Common Stock
of Bancorp as of the same date. For purposes of this representation,
shares of Bancorp Common Stock to be exchanged for cash are assumed to
be outstanding shares of Bancorp Common Stock as of the date of the
transaction. Moreover, shares of Bancorp Common Stock and shares of
First Virginia Common Stock held by Bancorp shareholders and otherwise
sold, redeemed or disposed of prior or subsequent to the Merger were
taken into account for purposes of this representation.
5. The liabilities of Bancorp and the liabilities to which its
assets are subject as of the Effective Date were incurred by Bancorp in
the ordinary course of business.
6. There is no intercorporate indebtedness existing between
Bancorp and First Virginia that was issued, acquired or will be settled
at a discount.
7. On the date of the Merger, the fair market value of the
assets of Bancorp will exceed the sum of its liabilities and the
liabilities, if any, to which its assets are subject.
8. On the date of the Merger, the basis of the assets of
Bancorp will equal or exceed the sum of its liabilities and the
liabilities, if any, to which its assets are subject.
9. None of the compensation received by any shareholder -
employees of Bancorp will be separate consideration for, or allocable
to, any of their shares of Bancorp Common Stock; and the aforementioned
compensation will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at
arms-length for similar services.
10. First Virginia has no present plan or intention to sell or
dispose any of the assets of Bancorp or its Subsidiaries on or after the
Effective Date of the Merger, except for (i) sales, transfers or other
distributions made in the ordinary course of business and (ii)
transfers described in Section 368(a)(2)(C) of the Internal Revenue Code
of 1986, as amended (the "Code"); First Virginia has no present plan or
intention to reacquire any of the shares of First Virginia Common
Stock it will issue to shareholders of Bancorp pursuant to the
Merger; and following the Effective Date of the Merger, First
Virginia will continue the historic businesses of Bancorp and its
Subsidiaries as presently conducted.
We have undertaken no independent investigation or verification with
respect to such representations or any other factual matters on which
our opinion is based.
Based upon the foregoing and the representations set forth above,
it is our opinion that:
1. The Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) of the Code. Bancorp and First
Virginia will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by Bancorp or First
Virginia upon the transfer of all of Bancorp's assets to First
Virginia pursuant to the Merger and the assumption of the liabilities
of Bancorp by First Virginia pursuant to the Merger, or upon the
distribution to Bancorp shareholders of the consideration to be
received by them in the Merger.
3. No gain or loss will be recognized by Bancorp shareholders
upon the exchange of their Bancorp Common Stock solely for First
Virginia Common Stock.
4. The gain, if any, realized by a Bancorp shareholder upon
receipt of First Virginia Common Stock and/or cash in the Merger will
be recognized, but in an amount not in excess of the cash received.
No loss will be recognized by Bancorp shareholders who receive only
First Virginia Common Stock in the Merger in exchange for their
Bancorp Common Stock.
5. The basis of the First Virginia Common Stock received in
the Merger by a Bancorp shareholder will be, in each instance, the
same as the basis of such shareholder in the Bancorp Common Stock
exchanged therefor.
6. The holding period of the First Virginia Common Stock to
be received by a Bancorp shareholder in the Merger will include, in
each instance, the holding period of such shareholder in the Bancorp
Common Stock exchanged therefor, provided that the Bancorp Common Stock
is held by such shareholder as a capital asset on the Effective Date.
Our opinion is limited to the federal income tax matters
specifically covered by this letter, and we have not been asked to
address, nor have we addressed, any other tax consequences of the
Merger. Without limiting the generality of the foregoing, no opinion is
expressed with respect to the tax consequences of the Merger under other
provisions of the Code and regulations thereunder or with respect
to the tax consequences of any conditions existing at the Effective
Date of, or effects resulting from, the Merger that are not
specifically addressed in this letter. Further, no opinion is
expressed with regard to the tax consequences of the Merger under
applicable foreign, state or local laws.
The opinions expressed herein are based solely upon the
documents that we have examined, the additional information that we
have obtained, and the representations set forth above that we have
assumed to be accurate as of the date of this letter. Our opinion
cannot be relied upon if any of the facts contained in such documents
or in any such additional information are, or later become,
inaccurate or if any of the representations set forth above are,
or later become, inaccurate. In addition, our opinion is based upon
existing law and current applicable rules, regulations, rulings and
court decisions in effect as of the date of this letter, all of
which are subject to change at any time either prospectively or with
retroactive effect. Any such change could modify or adversely affect
our opinions set forth herein. We undertake no obligation to update
or modify our opinions or this letter with respect to any changes in
or affecting the Merger or any of the foregoing which may occur after
the date of this letter. The opinions set forth in this letter have
been expressed solely for the use of the Board of Directors and
shareholders of Bancorp, and may only be relied upon by them. Our
opinions in this letter are not to be quoted in whole or in part or
otherwise referred to without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement on Form S-4 of First Virginia for the
registration of 4,048,584 shares of First Virginia Common Stock under
the Securities Act of 1933, as amended (the "Act"), and to the
references to us in the related Proxy Statement-Prospectus under the
captions "SUMMARY - Certain Federal Income Tax Consequences," "THE
AFFILIATION - Certain Federal Income Tax Consequences" and "LEGAL
MATTERS." In giving our consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Miles & Stockbridge,
a Professional Corporation
By___________________________________
Principal