ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, October 30, 1996 TAG: 9610300037
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
First Virginia Banks Inc. said Tuesday it has agreed to acquire Premier Bankshares Corp., a bank holding company based in Bluefield.
First Virginia Banks, based in Falls Church, has assets of $8.2 billion and banking offices in the Roanoke Valley. Premier has assets of $744 million.
John Minor, an analyst with SNL Securities Inc. of Charlottesville, said the transaction will make First Virginia the largest or second-largest bank in nine of 13 Southwest Virginia communities.
He said First Virginia is well represented in Roanoke and Bristol, but has few banks in the large area between those cities. Premier is strong in that region, he said, so "it's a good fill-in transaction."
The agreement is subject to approval by Premier shareholders and bank regulators. The banks said they expect the transaction to close early in the second quarter of 1997.
Premier operates three banks:
* A 13-office, $239 million bank based in Wytheville serving Wythe, Roanoke, Grayson and Montgomery counties and Galax.
* A 14-office, $310 million bank based at Honaker and operating in Dickenson, Wise, Buchanan, Washington and Russell counties.
* A nine-office, $199 million bank based in Tazewell and serving Tazewell County.
Premier has single offices in Salem and Shawsville.
Shareholders of Premier will receive 0.545 share of First Virginia stock for each of their 6,650,083 outstanding shares.
Based on the recent price of First Virginia, the value per share of Premier is $24.12, and the value of the deal is worth $160.4 million.
The price is about 2.10 times the Sept. 30 book value of Premier and about 15.4 times Premier's 12-month earnings.
First Virginia will issue about 3,624,295 shares to Premier shareholders in a tax-free exchange. First Virginia also announced a 1.9 million share increase in its existing stock repurchase program, bringing the new stock program to 4 million shares.
First Virginia said it expects that a combination of growth, cost savings, additional product offerings and share repurchases will absorb the initial 1 percent dilution within two years.
Premier banks will merge into existing First Virginia member banks, and Premier directors will join the boards of the merged banks.
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