Filed by SWVA Bancshares, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: SWVA Bancshares, Inc.
Commission File No.: 0-24674
On August 8, 2000, FNB Corporation, a Virginia corporation, and SWVA Bancshares,
Inc., a Virginia corporation, jointly issued the following press release:
*FOR IMMEDIATE RELEASE*
FNB CORPORATION AND SWVA BANCSHARES, INC.
ANNOUNCE AFFILIATION
FNB Corporation (NASDAQ: FNBP), parent company of First National Bank,
headquartered in Christiansburg, Virginia and SWVA Bancshares, Inc. (NASDAQ:
SWVB.OB), parent company of Southwest Virginia Savings Bank, FSB headquartered
in Roanoke, Virginia jointly announced today that they have entered into an
agreement to merge SWVA Bancshares, Inc. ("SWVA") into FNB Corporation ("FNB").
This is FNB's second affiliation announcement in the past month. On
July 11, 2000, FNB announced an agreement to acquire CNB Holdings, Inc. ("CNB"),
Pulaski, Virginia.
Under the terms of the agreement, shareholders of SWVA will receive
consideration valued at $20.25 for each share of SWVA common stock, in the form
of cash, stock of FNB, or a combination of cash and stock at each SWVA
shareholder's election. The cash portion of the consideration, however, will be
limited to 20% of the total consideration paid. For those SWVA shares which are
converted into FNB shares, the number of FNB shares issued will be determined by
dividing $20.25 by the average closing price of FNB shares for the 30 trading
days ending 10 days prior to closing, but in no case will FNB be required to
issue more than 1.324 shares or will
1
SWVA be required to accept less than 1.083 shares for each share of SWVA stock.
The transaction will be structured as a tax-free reorganization to the extent of
the shares exchanged and accounted for under the purchase method of accounting.
It is expected to be accretive to FNB's earnings per share after the first year
of operations.
Both First National Bank and Southwest Virginia Savings Bank, FSB will
continue operating under their respective managements with their current names
as wholly-owned subsidiaries of FNB. Each bank will be managed by its own board
of directors and each bank's customers will see no change in day-to-day
operations.
SWVA was formed in 1994 in connection with the conversion of Southwest
Virginia Savings Bank, FSB which was originally chartered in 1927. The savings
bank has five full-service offices and one loan production office in the greater
Roanoke area. As of March 31, 2000, SWVA had total assets of $83 million and
deposits of $65 million. For the nine months ended March 31, 2000, the company
had earned $329 thousand, a 27% increase over the same period in 1999.
Kendall Clay, Chairman of the Board of Directors of FNB and J. Daniel
Hardy, Jr., President and CEO of FNB, said of the affiliation, "The addition of
Southwest Virginia Savings Bank, FSB to the FNB super community banking family
will strengthen FNB's presence in the Roanoke Valley and along the I-81
corridor. This affiliation will further add to our desire to create a strong
community-based financial services company that is committed to the highest
level of customer service and maximizes shareholder value. Once both
transactions are completed, FNB will have over $650 million in assets and
capital of $60 million."
Bill L. Rakes, Chairman of the Board of SWVA and Don W. Shilling,
President and CEO of SWVA said, "We have followed the success of FNB over the
years and believe that its banking philosophy fits extremely well with the
strong community commitment that Southwest Virginia Savings Bank, FSB has
consistently maintained. This merger will enable us to enhance our ability
2
to serve our customers and increase our lending capabilities. In addition, our
shareholders should benefit from the improved liquidity of FNB's stock. FNB has
over 4.8 million common shares outstanding and well over 2,000 shareholders."
The merger is subject to approval by the shareholders of SWVA and bank
regulators and other standard conditions for transactions of this nature. The
companies anticipate closing the transaction in the fourth quarter of 2000 or
first quarter of 2001.
RP Financial, LC is serving as financial advisor to SWVA and The Carson
Medlin Company is advising FNB in this transaction.
For more information contact:
J. Daniel Hardy, Jr. Don W. Shilling
President and CEO President and CEO
FNB Corporation SWVA Bancshares, Inc.
(540) 382-6041 (540) 983-1405
Safe Harbor
This news release contains certain forward-looking statements about the
proposed merger of FNB and SWVA. 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. They often
include words like "will," "may," "should," "continue," "believes," "expects,"
"intends," "anticipates," and "estimates." These forward-looking statements
involve certain risks and uncertainties. Certain factors that could cause actual
results to differ materially from those contemplated by the forward-looking
statements include, among others, the following factors: (i) delays in
completing the merger; (ii) difficulties in achieving cost savings from the
merger or in achieving such savings within the expected time frame; (iii)
difficulties in integrating SWVA and
3
FNB; (iv) increased competitive pressures; (v) changes in interest rate
environment; (vi) changes in general economic conditions; (vii) legislative and
regulatory changes that adversely effect the business in which SWVA and FNB are
engaged, and changes in the securities markets.
Certain Information Concerning Participants
SWVA and its directors and executive officers may be deemed to be
participants in the solicitation of proxies of SWVA stockholders to approve the
merger. SWVA's board of directors is composed of D.W. Shilling, James H. Brock,
Glen C. Combs, Michael M. Kessler, F. Courtney Hoge and Barbara C. Weddle. Other
participants in the solicitation may include B.L. Rakes (former President and
Chief Financial Officer of Southwest Virginia Savings Bank, FSB and former
President and Chief Executive Officer of the SWVA) Wayne F. Munden (Senior Vice
President and Director of Lending) and Mary G. Staples (Treasurer/Controller).
These directors and executive officers may be deemed to be beneficial owners of
shares of SWVA Common Stock as of June 30, 2000 as follows:
4
Name Total Shares
---- ------------
James H. Brock 9,144
Glen Combs 15,112
Michael Kessler 9,966
B. L. Rakes 42,118
Courtney Hoge 8,612
Barbara C. Weddle 15,290
Mary Staples 5,782
Wayne F. Munden 8,395
D. W. Shilling 4,515
-------
Total 118,934
=======
As a result of the consummation of the merger, all stock options which
are outstanding, whether or not exercisable, shall be converted into and become
rights with respect to FNB Common Stock in accordance with the terms of the
stock option plan under which it was issued. In addition, all awarded management
stock bonus plan shares shall immediately vest, and all allocated shares under
the SWVA Employee Stock Ownership Plan will receive full consideration.
FNB will assume and extend the employment agreements with D.W. Shilling
and Barbara C. Weddle.
FNB and SWVA will be filing a joint proxy statement - prospectus
concerning the merger with the Securities and Exchange Commission ("SEC"). WE
URGE INVESTORS TO READ THE JOINT PROXY STATEMENT - PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain the documents free of charge at
the SEC's website, www.sec.gov. In addition, documents filed with the SEC by FNB
and SWVA will be
4
available free of charge from the Corporate Secretary of SWVA, Barbara C.
Weddle, at 302 Second Street, S.W., Roanoke, Virginia, 24011-1597, telephone
(540) 343-0135 and from the Corporate Secretary of FNB, Peter A. Seitz, at 105
Arbor Drive, P.O. Box 600, Christiansburg, Virginia 24068, telephone (540)
382-6041. INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY BEFORE MAKING A
DECISION CONCERNING THE MERGER.
5