THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: SATURDAY, June 25, 1994 TAG: 9406250203
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
DATELINE: 940625 LENGTH: Medium
BB&T and Virginia Beach-based Commerce Bank said they had approved an offer of BB&T stock valued at $111 million, or $40.78 a share, for the common stock of Commerce.
{REST} The price of Commerce shares jumped $4 in active trading Friday to close at $36.50.
BB&T ``approached us about using our management team for building a Virginia franchise,'' said G. Robert Aston Jr., president and chief executive officer of Commerce.
According to the merger agreement, Commerce will become a unit of a new bank holding company, BB&T of Virginia Inc., which will be based in Hampton Roads. Aston will become president and CEO of the new Virginia holding company.
Aston said he and two others on the Commerce board of directors would have seats on the main BB&T board.
The transaction still must be approved by Commerce shareholders and by banking regulators.
A vote by Commerce's 1,800 shareholders probably will be held in late December or early January. The two companies expect to complete the transaction by February, Aston said.
There could be some reduction in the size of Commerce's 340-person workforce as back-office jobs are consolidated, Aston said. However, he said, ``we have plenty of time to deal with employee issues through attrition.''
Aston said he and Commerce executive vice president R. Scott Morgan have made commitments to remain with BB&T for 10 years. BB&T has provided management agreements to about 18 of Commerce's officers, he said.
Commerce Bank will maintain the same name, at least for the short term, and customers shouldn't notice any difference in service, Aston said.
Commerce, which evolved from a modest community bank on the Virginia Beach Oceanfront, has grown rapidly during the past decade by building a branch network and local boards of directors throughout Hampton Roads. At the end of March, the bank had assets of $693.52 million and 21 branches.
BB&T, the fourth-largest banking company based in North Carolina, had $9.24 billion of assets at the end of March and 260 branches in North and South Carolina.
The BB&T-Commerce merger announcement came only two months after BB&T agreed to provide Commerce with as much as $12 million for the continued expansion of Commerce. In exchange, BB&T received shares in a new class of non-voting preferred stock.
Securities analysts said Friday they expected an eventual merger of the two companies but said they were surprised that a deal materialized quickly.
``The only question was the timing,'' said Merrill H. Ross, a banking analyst with the brokerage firm Wheat, First Securities Inc. ``It seems kind of odd to have this come only two months after the earlier agreement.''
The transaction should be ``a great deal'' for Commerce shareholders, said Guy W. Ford, an analyst with Scott & Stringfellow Inc. ``BB&T is a first-class organization with a good track record, a strong balance sheet and excellent asset quality.''
by CNB