EXHIBIT 99(a)
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FNB CORP. [LOGO APPEARS HERE] CAROLINA
Post Office Box 1328, Asheboro, N. C. 27204
(336) 626-8300
FINCORP, INC.
Post Office Box 1597, Rockingham, N. C. 28379
(910) 997-6245
FOR IMMEDIATE RELEASE
October 18, 1999
FNB Corp. and Carolina Fincorp, Inc. Agree to Merge
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Asheboro, N.C. -- Michael C. Miller, Chairman and President of FNB Corp.
(Nasdaq: FNBN) and R. Larry Campbell, President and Chief Executive Officer of
Carolina Fincorp, Inc., today announced the signing of a definitive agreement
for the merger of the two institutions. The agreement provides that FNB will
issue .79 shares of its common stock for each share of Carolina common stock.
Based on Friday's closing price for FNB, the transaction represents a price of $
15.01 per share of Carolina common stock and a deal value of approximately $29.1
million. The merger will result in an institution with combined assets of
approximately $500 million and a market capitalization in excess of $100
million.
"This is a very positive step for FNB," noted Mr. Miller. "Carolina
Fincorp's markets complement those of FNB perfectly. Richmond, Moore and
Scotland counties are immediately adjacent to our existing franchise in
Randolph, Montgomery and Chatham counties, and together we hold the number one
deposit market share in the markets where we have offices. With presence in
communities such as Rockingham, Ellerbe, Southern Pines and Laurinburg, Carolina
broadens our strong demographic base and positions us well for future growth as
these six counties sit at the heart of the planned expansion of the Interstate
73 and 74 corridors."
Mr. Campbell added, "We are extremely pleased to join forces with FNB Corp.
and First National. We share a common heritage of serving our communities for
nearly a century. This merger creates growth opportunities in commercial
banking and noninterest income areas that would have taken us longer to develop
individually and thereby promotes the best interests of Carolina Fincorp's
customers, employees and shareholders."
Subject to certain conditions including the approval of both companies'
shareholders and applicable regulatory authorities, the merger is anticipated to
close late in the first quarter or early in the second quarter of 2000. The
transaction is intended to be tax-free to the shareholders of Carolina Fincorp
and will be accounted for as a pooling of interests.
Two members of Carolina's Board of Directors will join the FNB Board.
Carolina has granted FNB the option, exercisable under certain circumstances, to
purchase up to 19.9% of Carolina shares outstanding.
FNB Corp. is the $380 million bank holding company for First National Bank
and Trust Company, which operates twelve offices in Chatham, Montgomery and
Randolph counties in central North Carolina. First National Bank and Trust
offers a complete line of financial services, including deposit, loan,
investment and trust services. Carolina Fincorp, a bank holding company for
Richmond Savings Bank, Inc. SSB, operates five offices in Richmond, Moore and
Scotland counties. Richmond offers a broad array of deposit and loan products,
as well as sale of insurance and investment products.
FNB expects to realize merger synergies by reducing the operating expenses
of the combined company as well as by increasing revenues through sales
opportunities in the attractive, contiguous markets where Carolina Fincorp
operates. The combined organization is expected to offer growth potential
through the respective strengths of the merging banks in a variety of business
lines that both companies bring to the equation, including retail banking
services, commercial and small business lending, mortgage banking, personal
financial planning, brokerage, trust and investment management services. The
transaction is expected to close by the end of the first quarter or the
beginning of the second quarter of year 2000, when earnings will reflect merger-
related charges. The merger is expected to be accretive to FNB Corp.'s earnings
per share by the end of 2001.
This news release contains forward-looking statements, including estimates
of future operating results and other forward-looking financial information for
FNB Corp. and Carolina Fincorp, Inc. These estimates constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. As such, the estimates involve significant risks and uncertainties.
Actual results may differ materially due to such factors as: (1) expected cost
savings from the merger not materializing within the expected time frame; (2)
revenues following the merger not meeting expectations; (3) competitive
pressures among financial institutions increasing significantly; (4) costs or
difficulties related to the integration of the businesses of FNB and Carolina
Fincorp being greater than anticipated; (5) general economic conditions being
less favorable than anticipated; and (6) legislation or regulatory changes
adversely affecting the business in which the combined company will be engaged.
For additional information, contact:
FNB Corp.
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Michael C. Miller
or
Jerry A. Little
(336) 626-8300
Carolina Fincorp, Inc.
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R. Larry Campbell
or
John W. Bullard
(910) 997-6245