Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, October 12, 1994 TAG: 9410120059
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Ameribanc Savings Bank of Annandale, will become part of First Union National Bank of Virginia, which is based in Roanoke.
Ben Jenkins, president of First Union's Virginia bank, said the acquisition has "some positive impact for Roanoke" in terms of employment at the company's service center on Plantation Road. Although no details are available now, Jenkins said employment and branch locations will be studied over the next six months.
First Union will pay about $108 million for Ameribanc based on a price of $3 for each of Ameribanc's approximately 36 million outstanding shares. The price is about 150 percent of Ameribanc's June 30 book value of $71 million or $1.99 a share.
Ameribanc Savings Bank had $1.1 billion in assets and $752 million in deposits as of June 30. Jenkins described it as primarily a producer of residential mortgages, 72 percent of the current portfolio issued at adjustable rates.
It operates 29 branches in Virginia - 20 in Northern Virginia, eight in Tidewater and one in Charlottesville, which is a new market for First Union.
In addition, Ameribanc operates four mortgage offices: two in Northern Virginia, and one each in Virginia Beach and Rockville, Md.
The acquisition is expected to take place during the first half of 1995, subject to approval by regulators and Ameribanc shareholders. First Union expects the acquisition to begin adding to corporate earnings in 1996 with no more than a penny per share cost to 1995 earnings.
Jenkins said he expects First Union's share of the market in Fairfax County to increase by 4 percentage points. In the Washington metropolitan area, First Union operates 123 branches and holds about $4.5 billion in deposits, the area's third-largest share.
It also ranks third statewide with $6.8 billion in deposits. It has 193 branches. Nationally, First Union is the ninth largest bank with $74.2 billion in assets and 1,300 branches in seven states and Washington.
In its quarterly financial report, First Union said earnings rose to $235 million or $1.35 a share in the third quarter, compared with $189 million or $1.12 a share, a year earlier.
Robert Atwood, chief financial officer, said the 24 percent increase came on top of a very good year in 1993. The results exceeded analysts' predictions of $1.33 a share, he said.
In the first nine months, income rose to $675 million, a 12 percent increase from $603 million in 1993. The jump per share went from $3.61 to $3.94.
Key factors in the performance included growth in loans of 12 percent, about evenly split between commercial and consumer business. Atwood said that growth came primarily in Florida, North Carolina and, more recently, Virginia.
Another factor, the bank said, was growth of fee income, primarily for trust and brokerage services. Net interest income also rose 10 percent.
Credit quality continued to improve, allowing a 50 percent decrease in the provision for loan losses compared to last year.
by CNB