Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, January 18, 1994 TAG: 9401180058
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
First Union said it has agreed to acquire BancFlorida, a thrift headquartered in Naples with 37 offices. BancFlorida has assets of $1.5 billion.
David Scanzoni, spokesman for First Union, said the merger will increase bank-card and consumer-loan-servicing operations, which are done in Roanoke for the bank's entire system.
Scanzoni could not say whether it would increase employment, but he said the acquisition would have a positive impact on volume.
The merger, which is subject to stockholder and regulatory approvals, is expected to become final during the third quarter.
It will significantly increase First Union's presence in Naples, Fort Myers and Sarasota, Fla., which are among the fastest growing metropolitan areas in the nation.
BancFlorida's shareholders would receive 0.669 of a First Union share for each BancFlorida share, under Monday's agreement. Ratios could change if First Union's stock fluctuates widely.
The value of the transaction depends on the price of First Union's stock in the 10 days leading up to the closing. On Monday, First Union's common stock closed at $42.37 1/2 a share.
Had the merger taken place Friday, BancFlorida shareholders would have received 162 percent of BankcFlorida book value on Sept. 30.
First Union said the acquisition should add to its earnings 12 months after closing the deal.
The company said it expects to achieve significant merger-related savings equal to 35 percent of BancFlorida's current annual noninterest expenses. That should happen after conversion to the First Union data processing system.
First Union plans to buy in the open market about half of the shares issued in the acquisition. The purchase, if it takes place, will come near the acquisition date and be based on First Union's stock price, capital needs and other factors.
First Union received an option to acquire up to 19 percent of BancFlorida's outstanding shares at $25 a share.
In its annual financial report, First Union said it earned $793 million last year, up 124 percent from $353 million in 1992. Income per share increased to $4.73 from $2.23.
The results were restated to include several acquisitions, including Roanoke-based Dominion Bankshares Corp.
In the fourth quarter, net income was $190 million, or $1.12 per share, compared with $11 million, or 5 cents a share, a year earlier.
Chairman Edward Crutchfield said the company was able to reduce the level of nonperforming assets by $435 million in the past year, while it consolidated five merger partners representing $21 billion in assets.
Crutchfield said the bank had a 12 percent increase in net interest income, reflecting both loan and investment growth.
The bank expects to benefit in 1994 from its 1993 mergers, Crutchfield said, and the bank is encouraged by loan growth, especially in North Carolina and Florida. Average loans increased 6 percent on an annualized basis from the third to the fourth quarter.
Net loans stood at $46.9 billion at year end, while deposits were $53.7 billion. First Union had assets of $70.8 billion and operated 1,302 banking offices from Florida to Maryland at the end of last year.
by CNB