EXHIBIT 99.1
Press Release - For Immediate Release
For Further Information Contact:
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R. Steve Aaron, President
United Community Bancorp
Hickory, North Carolina
(828) 431-2300
Ronald S. Shoemaker, President
Community Bancshares, Inc.
North Wilkesboro, North Carolina
(336) 903-0600
UNITED COMMUNITY BANCORP AND COMMUNITY BANCSHARES, INC.
ANNOUNCE PLANS FOR MERGER
Hickory, NC: August 5, 2002 United Community Bancorp, Hickory, NC ("United")
(Nasdaq SmallCap UCBB) and Community Bancshares, Inc., North Wilkesboro, NC
("Community") announced today the signing of a definitive agreement to merge
whereby Community Bancshares, Inc. would be merged into United and Community's
subsidiary bank, Northwestern National Bank would be merged into Catawba Valley
Bank, a subsidiary bank of United. Northwestern's branches in its market would
continue to operate under the Northwestern Bank name as branch offices of
Catawba Valley Bank. Shareholders of Community will receive either cash of
$21.00 per share or shares of United's common stock valued at $21.00 per share,
or a combination of both, with 70% of Community's shares being exchanged for
shares of United Common Stock and 30% being exchanged for cash. The merger is
subject to approval by federal and state banking authorities and appropriate
shareholder approvals. It is anticipated that the transaction will be completed
by year end 2002.
The combination will result in a banking franchise with total assets of
approximately $492 million and deposits of approximately $397 million with 14
full service banking offices in the towns of Belmont, Boone, Gastonia, Hickory,
Millers Creek, Mt. Holly, Newton, North Wilkesboro, Stanley, Taylorsville, West
Jefferson and Wilkesboro.
R. Steve Aaron, President of United and Catawba Valley Bank stated: "We are
delighted to join up with Ron Shoemaker and his fine organization and to
continue the banking tradition of Northwestern Bank in the western markets of
North Carolina. We look forward to adding the leadership of Ron and his
excellent group of executives and employees to the United family. Together I
believe we will enhance the shareholder value of both of our shareholder groups
as well as expand our banking market reach."
Ron Shoemaker, President of Community and Northwestern National Bank said:
"United Community Bancorp is building a premier franchise in our state and we
are looking
forward to joining Catawba Valley Bank and First Gaston Bank, United's other
subsidiary bank, in continuing to bring first class, community banking services
to our markets. I am sure our customers and shareholders will be pleased with
the results of this combination."
At June 30, 2002, United Community Bancorp had total assets of $354 million,
total deposits of $283 million and total shareholders' equity of $33 million. At
the same date, Community Bancshares, Inc. had total assets of approximately $138
million, total deposits of approximately $114 million and shareholders' equity
of approximately $17 million. United Community Bancorp serves the Hickory, NC
market and the Gastonia-Mecklenburg County markets through its subsidiary banks,
Catawba Valley Bank and First Gaston Bank.
This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include but
are not limited to, (1) statements about the benefits of the merger of United
Community Bancorp and Community Bancshares, Inc., including future financial and
operating results, cost savings, and enhanced revenues, (2) statements with
respect to United Community Bancorp's and Community Bancshares, Inc.'s plans,
objectives, expectations and intentions and other statements that are not
historical facts; and (3) other statements identified by words such as
"believes", "expects", "anticipates", "estimates", "intends", "plans",
"targets", "projects", and similar expressions. These statements are based upon
the current beliefs and expectations of United Community Bancorp's and Community
Bancshares, Inc.'s management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) expected revenue synergies and cost savings from
the combination may not be fully realized or realized within the expected time
frame; (2) revenues following the combination may be lower than expected; (3)
the ability to obtain governmental approvals of the combination on the proposed
terms and schedule; (4) the failure of United Community Bancorp's and Community
Bancshares, Inc.'s shareholders to approve the combination; (5) competitive
pressures among depository and other financial institutions may increase
significantly and have an effect on pricing, spending, third-party relationships
and revenues; (6) the strength of the United States economy in general and the
strength of the local economies in which the combined company will conduct
operations may be different than expected resulting in, among other things, a
deterioration in the credit quality or a reduced demand for credit, including
the resultant effect on the combined company's loan portfolio and allowance for
loan losses; (7) changes in the U.S. legal and regulatory framework; and (8)
adverse conditions in the stock market, the public debt market and other capital
markets (including changes in interest rate conditions) and the impact of such
conditions on the combined company. Additional factors that could cause United
Community Bancorp's and Community Bancshares, Inc.'s results to differ
materially from those described in the forward-looking
statements can be found in United Community Bancorp's and Community Bancshares,
Inc.'s reports (such as Annual Reports on Form 10-KSB, Quarterly Reports on Form
10-QSB and Current Reports on Form 8-K) filed with the Securities and Exchange
Commission and available at the SEC's Internet site (http://www.sec.gov). All
subsequent written and oral forward-looking statements concerning the proposed
transaction or other matters attributable to United Community Bancorp and
Community Bancshares, Inc. or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above. United Community
Bancorp and Community Bancshares, Inc. do not undertake any obligation to update
any forward-looking statement to reflect circumstances or events that occur
after the date the forward-looking statements are made.
The proposed merger will be submitted to United Community Bancorp's and
Community Bancshares, Inc.'s shareholders for their consideration, and United
Community Bancorp and Community Bancshares, Inc. will file a registration
statement, a joint proxy statement/prospectus and other relevant documents
concerning the proposed transaction with the SEC. Stockholders are urged to read
the registration statement and the joint proxy statement/prospectus, as well as
other filings containing information about United Community Bancorp and
Community Bancshares, Inc., at the SEC's Internet site (http://www.sec.gov).
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Copies of the joint proxy statement/prospectus and the SEC filings that will be
incorporated by reference in the joint proxy statement/prospectus can also be
obtained, without charge, by directing a request to R. Steve Aaron, President
and CEO, United Community Bancorp, Post Office Box 1907, Hickory, North Carolina
28603-1907 (828-431-2300), or to Ronald S. Shoemaker, President and CEO,
Community Bancshares, Inc., Post Office Box 2368, North Wilkesboro, North
Carolina 28659-2368 (336-903-0600).
United Community Bancorp and Community Bancshares, Inc., and their respective
directors and executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of United Community Bancorp and
Community Bancshares, Inc. in connection with the combination. Information about
the directors and executive officers of United Community Bancorp and their
ownership of United Community Bancorp common stock is set forth in the proxy
statement, dated March 8, 2002, for United Community Bancorp's 2002 annual
meeting of shareholders, as filed with the SEC on Schedule 14A. Information
about the directors and executive officers of Community Bancshares, Inc. and
their ownership of Community Bancshares, Inc. common stock is set forth in the
proxy statement, dated April 30, 2002, for the Community Bancshares, Inc.'s 2002
annual meeting of shareholders, as filed with the SEC on Schedule 14A.
Additional information regarding the interests of those participants may be
obtained by reading the joint proxy statement/prospectus regarding the proposed
transaction when it becomes available.