EXHIBIT 99.1
[logo of Bank of Granite Corporation]
[logo of First Commerce Corporation]
News
For Release: December 18, 2002
BANK OF GRANITE TO MERGE
WITH CHARLOTTE'S FIRST COMMERCE BANK
Granite Falls, NC - Bank of Granite Corporation Chairman and CEO John
A. Forlines, Jr., and Wesley W. Sturges, President and CEO of First Commerce
Corporation of Charlotte, North Carolina, have announced a merger between the
two institutions. Directors of both companies have approved the merger and have
signed a definitive agreement calling for the exchange of a combination of
shares of Bank of Granite Corporation common stock and cash for all outstanding
shares of First Commerce Corporation. The total assets of the merged companies
will exceed $900 million, making them the 9th largest commercial bank
headquartered in North Carolina.
In the merger, Bank of Granite will issue 671,612 shares and $4,584,880
in cash to First Commerce shareholders for a total deal value of approximately
$18.5 million. For each share owned, First Commerce shareholders will be
entitled to select either (i) $16.60 cash; (ii) a combination of stock and cash
or; (iii) 100% stock. To the extent that First Commerce shareholders elect to
receive more cash or stock than permitted by the agreement, pro rata allocations
will be made. The transaction is intended to qualify as a tax-free
reorganization under 368(a) of the Internal Revenue Code.
The merger is subject to approval by First Commerce's shareholders and
the approval of Federal and State regulators. According to Forlines and Sturges,
the transaction is expected to close during the second quarter of 2003. First
Commerce's banking offices will become Bank of Granite offices.
Mr. Forlines expressed pleasure over Bank of Granite's first banking
acquisition. "We are delighted to announce this strategic partnership with this
very fine bank located in the number one MSMA market area of North Carolina," he
said. "We have watched their growth and progress since their inception in 1996.
They have a strong Board of Directors and we are especially proud to have Wes
Sturges join our executive management team."
Sturges will serve as Executive Vice President of both the bank and the
holding company. For some time Bank of Granite has been concerned with
management succession and
having Wes Sturges join the management team will enable Bank of Granite to
address this issue. Sturges, 53, has been in banking for 31 years and headed the
Mecklenburg division of a major bank prior to founding First Commerce in 1996.
He currently serves as Chairman of the North Carolina Bankers Association, a
position formerly held by both Forlines and Charles M. Snipes, Bank of Granite's
President and CEO. Mr. Forlines added, "Both Charles and I are looking forward
to working with Wes, helping him strengthen our merged bank's presence in the
Mecklenburg market, as well as assisting him in assuming an executive management
role in the merged bank."
In commenting on the proposed merger, Wes Sturges said, "All of us are
delighted to join forces with the best community bank in the country. We have
great respect for the Bank of Granite and its management and feel the
combination of our two companies will enhance the tradition of banking
excellence for which Bank of Granite is known."
The merger will be accounted for under the purchase method of
accounting. Bank of Granite Corporation stock is traded on the Nasdaq National
Market(R) tier of The Nasdaq Stock Market(R) under the symbol GRAN. Its last
trade yesterday was $18.59.
Upon closing of the transaction, James Y. Preston, First Commerce Board
Chairman, will become a member of Bank of Granite and Bank of Granite
Corporation's Board of Directors. Preston is a senior partner in the Charlotte
law firm of Parker Poe Adams & Bernstein L.L.P. Other members of First
Commerce's Board will remain active and become members of the Mecklenburg Board
of Bank of Granite.
At the end of third quarter 2002, First Commerce's assets totaled $180
million and Bank of Granite's assets totaled $732 million.
For further information, contact:
John A. Forlines, Jr., CEO Wesley W. Sturges, CEO
Bank of Granite Corporation First Commerce Corporation
828 496-2024 704 945-6561
jaforlines@bankofgranite.com wsturges@firstcommercebank.com
The discussions included in this release contain statements that may be
deemed forward looking statements within the meaning of the Private Securities
Litigation Act of 1995, including Section 21E of the Securities Exchange Act of
1934 and Section 27A of the Securities Act of 1933. Such statements involve
known and unknown risks, uncertainties and other factors that may cause actual
results to differ materially from these statements. For the purposes of these
discussions, any statements that are not statements of historical fact may be
deemed to be forward looking statements. Such statements are often characterized
by the use of qualifying words such as "expects," "anticipates," "believes,"
"estimates," "plans," "projects," or other statements concerning opinions or
judgments of the Company and its management about future events. The accuracy of
such forward looking statements could be affected by certain factors, including
but not limited to, the financial success or changing conditions or strategies
of the
Company's customers or vendors, fluctuations in interest rates, actions of
government regulators, the availability of capital and personnel, and general
economic conditions.
Bank of Granite Corporation,
PO Box 128, Granite Falls, NC 28630 www.bankofgranite.com
SUPPLEMENTAL TRANSACTION SUMMARY
Price per FCMM share: $16.60 (1)
Consideration: 671,642 GRAN shares plus $4,584,880 cash
Transaction Value: $18.5 million
Transaction Collars: If the average price of the buyers stock for
twenty business days prior to the three days
before closing is more than 20% higher or lower
than $18.40 per share, the consideration may be
adjusted. Walk-away provisions for FCMM are
provided.
Transaction Structure: Shareholders will have three election options:
1.) .9022 shares of GRAN common stock
2.) .6580 shares of GRAN common stock plus
$4.49 cash
3.) $16.60 cash
Pro rata allocations will be made if necessary
Break Up Fee: 5% of transaction value
Company Name After Merger: Bank of Granite Corporation
Corporate Structure: FCMM will be merged into GRAN
First Commerce Bank will be merged into
Bank of Granite
Headquarters After Merger: Granite Falls, North Carolina
Board Representation: 1 additional director (Total of 8)
Pro Forma FCMM Ownership: 4.80%
Expected Closing: Second quarter of 2003
Due Diligence: Completed by both parties
Required Approvals: Bank of Granite Corporation - Regulatory
First Commerce - Shareholder and Regulatory
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(1) Based on the 20-day average closing stock price of GRAN ending December
12, 2002.