Exhibit 8
[WILLIAMS, MULLEN, CLARK & DOBBINS LETTERHEAD]
July __, 1999
Board of Directors
Southern Financial Bancorp, Inc.
37 E. Main Street
Warrenton, Virginia 22186
Board of Directors
The Horizon Bank of Virginia
140 Park Street, SE
Vienna, Virginia 22180
Re: Tax Opinion - Merger of The Horizon Bank of Virginia
with and into Southern Financial Bank a wholly owned
subsidiary of Southern Financial Bancorp, Inc.
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax
consequences of the proposed merger (the "Merger") of The Horizon Bank of
Virginia ("HBV") with and into Southern Financial Bank ("Surviving Bank") a
wholly owned subsidiary of Southern Financial Bancorp, Inc. ("SFB") pursuant to
the Agreement and Plan of Reorganization, dated May 3, 1999, between these
parties. Our opinion is given pursuant to Section 6.1(d) of the Agreement and
Plan of Reorganization.
FACTS:
HBV is a corporation and state bank organized under Virginia law. HBV's
principal executive offices are located at 140 Park Street, SE, Vienna, Virginia
22180.
SFB is a Virginia corporation and registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Surviving Bank, a wholly owned
subsidiary of SFB, is a corporation and state bank organized under Virginia law.
SFB's principal executive office is located at 37 E. Main Street, Warrenton,
Virginia 22186
Pursuant to the Agreement and Plan of Reorganization, HBV will be
merged with and into Surviving Bank in accordance with the provisions of Title
13.1 of the Code of Virginia
of 1950, as amended. Each outstanding share of HBV common stock will
automatically become and be converted into 0.63 shares of SFB common stock. Cash
will be paid in lieu of fractional shares. After the Merger, Surviving Bank will
continue its existing business and operations as a wholly owned subsidiary of
SFB.
In connection with this opinion, we have reviewed (i) the Agreement and
Plan of Reorganization, (ii) SFB's Registration Statement on Form S-4, dated
July __, 1999, including the Prospectus and Joint Proxy Statement contained
therein, and (iii) such other documents concerning the Merger as we have deemed
necessary ((i), (ii), and (iii) collectively, the "Merger Documents"). With
respect to the various factual matters material to our opinions, we have relied
upon certificates of certain officers of and HBV and SFB (the "Officers'
Certificates"). We have assumed the correctness of the factual matters contained
in such reliance sources and have made no independent investigation for the
purpose of confirming that such factual matters are correct. As to all matters
in which a person or entity has represented that such person or entity either is
not a party to, does not have, or is not aware of, any plan or intention,
understanding or agreement, we have assumed that there is in fact no plan,
intention, understanding or agreement. We have also assumed that the Merger will
be consummated in accordance with the Agreement and Plan of Reorganization.
We have assumed (i) the genuineness of all signatures on the Merger
Documents, (ii) the due authorization, execution, and delivery of all documents
and the validity and binding effect thereof, (iii) the authenticity of all
documents submitted to us as originals, (iv) the conformity to the originals of
all documents submitted to us as copies and the authenticity of the originals
from which the copies were made, and (v) the legal capacity of natural persons.
OPINION:
Based on the foregoing and subject to the limitations and
qualifications set forth herein, we give our opinion as follows:
1. The Merger will qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code (the
"Code"), and HBV and SFB will each qualify as a "party to a reorganization"
within the meaning of Section 368 (b) of the Code.
2. No gain or loss will be recognized for federal tax purposes by HBV or
SFB as a result of the Merger.
3. No gain or loss will be recognized for federal tax purposes by the
shareholders of HBV as a result of the exchange of their common stock solely for
the common stock of SFB.
4. Any shareholder of HBV who receives cash in lieu of a fractional share
interest shall be treated as receiving a payment in redemption of such
fractional interest subject to the provisions of Section 302 of the Code. Gain
or loss will be realized and recognized to such shareholder measured by the
difference between the redemption price and the portion of the shareholder's
basis in HBV stock allocable to such fractional share interest.
5. The aggregate tax basis of the shares of SFB stock received by each
shareholder of HBV will be equal to the aggregate tax basis of such
shareholder's shares of HBV stock surrendered therefor in the Merger.
6. The holding period under Section 1223 of the Code for the shares of SFB
stock received by each shareholder of HBV will include the holding period for
the shares of HBV stock of such shareholder surrendered therefor in the Merger,
provided that the HBV shareholder held such stock as a capital asset on the date
of the Merger.
In rendering our opinion, we have considered the applicable provisions
of the Code, Treasury Regulations promulgated thereunder, pertinent judicial
authorities, interpretive rulings of the Internal Revenue Service, and other
authorities as we have considered relevant. Our opinion is limited to the
federal tax law of the United States of America and is expressed as of the date
hereof. We do not assume any obligation to update or supplement our opinion to
reflect any fact or circumstance which hereafter comes to our attention or any
change in law which hereafter occurs. Our opinions are limited to the matters
expressly stated; no opinion is implied or may be inferred beyond such matters.
Our opinion expressed herein is made in connection with the Merger and
is solely for the benefit of HBV, SFB and its shareholders. We hereby consent to
the filing of this opinion as an exhibit to the Registration Statement, which
has been filed by SFB with the Securities and Exchange Commission, and to the
reference to our firm under the caption "Certain Federal Income Tax
Consequences" in the Prospectus and Proxy Statement forming a part of the
Registration Statement. This opinion may not, without our prior written consent,
be otherwise distributed or relied upon by any other person, filed with any
other government agency or quoted in any other document.
Very truly yours,
WILLIAMS, MULLEN, CLARK & DOBBINS
By:______________________________