Filed by F&M National Corporation pursuant to
Rule 425 under the Securities Act of 1933, and
deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934.
Commission File No.: 000-5929
Subject Company: Atlantic Financial Corp
Commission File No.: 000-21285
FOR IMMEDIATE RELEASE:
Alfred B. Whitt, Vice Chairman/President/CEO,
F&M National Corporation (540) 665-4282
William J. Farinholt, President/CEO,
Atlantic Financial Corp (757) 595-7020
July 6, 2000
F&M NATIONAL CORPORATION ANNOUNCES PLAN OF AFFILIATION
WITH ATLANTIC FINANCIAL CORP, NEWPORT NEWS, VIRGINIA
WINCHESTER, VIRGINIA, July 6, 2000 (NYSE: FMN). F&M National Corporation and
Atlantic Financial Corp (Nasdaq: AFIC) of Newport News, Virginia, today
announced the signing of a definitive agreement for the affiliation of Atlantic
with F&M. Through its 15 banking offices, Atlantic provides a broad array of
financial services to individuals and small to medium sized businesses. At
March 31, 2000, Atlantic reported total assets of approximately $385.5 million
and total stockholders equity of approximately $43.4 million.
Under the terms of the agreement, F&M will exchange 0.753 shares of its common
stock for each share of Atlantic stock. The transaction has an indicated value
of approximately $70.59 million, or $16.85 per Atlantic share, based on F&M's
closing price on July 5, 2000, of $22.375. The transaction is calculated at
1.55 times the estimated book value for 2000. The offer is 14.0 times 2000
estimated earnings. It is anticipated the deal will be accretive to F&M book
value and, with an approximate 10% savings in Atlantic's operating expenses,
will be accretive to earnings in 2001.
"We are extremely pleased to have such a quality institution join the F&M family
of community banks and to help us extend our franchise to the Peninsula and
Tidewater market areas." said Alfred B. Whitt, F&M's President and Chief
Executive Officer, in announcing the transaction. "The affiliation is a
positive one for both our organizations, as well as our respective shareholders
and customers."
Bill Farinholt, President and Chief Executive Officer of Atlantic, added, "We
will have a larger partner and be able to expand the products and services
available to our customers including, among others, Internet banking, insurance,
and trust services. The transaction will enhance our already strong bank. F&M
has a long history of permitting its banking affiliates to operate in the best
interests of the communities they serve, while offering to these communities the
advantages that are derived from a much larger banking organization. F&M is a
people-oriented organization that enjoys an excellent reputation with their
customers, employees and the communities it serves."
The transaction, expected to be completed no later than the first quarter of
2001, requires the approval of various regulatory agencies and the shareholders
of Atlantic and satisfaction of other standard conditions. The transaction is
intended to qualify as a tax-free exchange and be accounted for as a pooling of
interests. Atlantic's two bank subsidiaries, Peninsula Trust Bank and United
Community Bank, will be combined and will be operated as a separate banking
subsidiary of F&M under the name of F&M Bank-Atlantic.
Atlantic Financial Corp is headquartered in Newport News, Virginia, and offers
banking services through Peninsula Trust Bank, whose main office is located in
Gloucester, Virginia, and United Community Bank, whose main office is in
Franklin, Virginia. The banking subsidiaries have 15 offices in Gloucester,
Williamsburg, Newport News, Charles City, Glenns, Mattaponi, Franklin,
Courtland, Newsoms, Suffolk, Wakefield, Ivor, and Surry, all located in
Virginia.
F&M National Corporation is a multi-bank holding company headquartered in
Winchester, Virginia, with assets in excess of $3.2 billion at March 31, 2000,
and 128 banking offices. An acquisition of $310 million in deposits and 15
locations was announced on May 4, 2000 and is scheduled to close in the third
quarter of 2000. F&M operates ten banking affiliates: eight in Virginia which
are F&M Bank-Winchester, Winchester; F&M Bank-Massanutten, Harrisonburg; F&M
Bank-Richmond, Richmond; F&M Bank-Central Virginia, Charlottesville; F&M Bank-
Emporia, Emporia; F&M Bank-Peoples, Warrenton; F&M Bank-Northern Virginia,
Fairfax; and F&M Bank-Highlands, Covington; and in West Virginia, F&M Bank-West
Virginia, Ranson; and in Maryland, F&M Bank-Allegiance, Bethesda.
F&M offers insurance and financial services through its subsidiaries, F&M-Shomo
& Lineweaver and F&M-J.V. Arthur. F&M also operates F&M Trust Company. F&M's
common stock is listed on the New York Stock Exchange under the symbol FMN.
Forward-Looking Statements:
This press release contains certain forward-looking statements about the
proposed affiliation of F&M and Atlantic. These statements include statements
regarding the anticipated closing date of the transaction, anticipated cost
savings, and anticipated future results. Forward-looking statements can be
identified by the fact that they do not relate strictly to historical or current
facts. Certain factors that could cause actual results to differ materially
from expected include, but are not limited to, delays in completing the merger,
difficulties in achieving cost savings from the merger or in achieving such cost
savings within the expected time frame, difficulties in integrating F&M and
Atlantic, increased competitive pressures, changes in the interest rate
environment, changes in general economic conditions, legislative and regulatory
changes that adversely affect the business in which F&M and Atlantic are
engaged, and changes in the securities markets. For more information on factors
that could affect expectations, see F&M's Annual Report on Form 10-K for the
year ended December 31, 1999 and Atlantic's Annual Report on Form 10-KSB for the
year ended December 31, 1999.
Shareholders of F&M and Atlantic and other investors are urged to read the proxy
statement/prospectus that will be included in the Registration Statement on Form
S-4 to be filed by F&M with the U. S. Securities and Exchange Commission in
connection with the proposed transaction.
* * * * * *
The press release as issued on July 6, 2000 omitted the following disclosure
which is being made in accordance with Rule 165 of the U. S. Securities and
Exchange Commission.
The foregoing may be deemed to be offering materials of F&M National Corporation
in connection with F&M's proposed acquisition of Atlantic Financial Corp on the
terms and subject to the conditions in the Agreement and Plan of Reorganization,
dated July 5, 2000, by and between F&M and Atlantic Financial.
Shareholders of Atlantic Financial and other investors are urged to read the
proxy statement/prospectus that will be included in the registration statement
on Form S-4 which F&M will file with the SEC in connection with the proposed
merger because it will contain important information about F&M, Atlantic
Financial, the merger, the persons soliciting proxies in the merger and their
interests in the merger and related matters. After it is filed with the SEC,
the proxy statement/prospectus will be available for free, both on the SEC's web
site (http://www.sec.gov) and from F&M and Atlantic Financial as follows:
Secretary
F&M National Corporation
9 Court Square
P. O. Box 2800
Winchester, Virginia 22604
Phone: (540) 665-4200
Secretary
Atlantic Financial Corp.
737 J. Clyde Morris Boulevard
Newport News, Virginia 23061
Phone: (757) 595-7020
In addition to the proposed registration statement and proxy
statement/prospectus, F&M and Atlantic Financial file annual, quarterly and
special reports, proxy statements and other information with the SEC. You may
read and copy any reports, statements or other information filed by either
company at the SEC's public reference rooms at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at the SEC's other public reference rooms in New York,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. F&M's and Atlantic
Financial's filings with the SEC are also available to the public from
commercial document-retrieval services and on the SEC's web site at
http://www.sec.gov.
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