THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, August 27, 1994 TAG: 9408270267
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Short : 49 lines
Shareholders of Pioneer Financial Corp., the Chester-based parent of Pioneer Federal Savings Bank, voted Friday to accept a merger offer worth $57 million from Signet Banking Corp.
The transaction, scheduled to close Wednesday, will provide Signet with 11 more branches in Richmond, Hopewell, and neighboring markets and $313 million of additional deposits.
For Richmond-based Signet, the size of the transaction is relatively modest, but ``it appears that Signet got a great deal,'' said Vernon Plack, a banking analyst with the securities firm Scott & Stringfellow Inc.
Signet was one of four bank holding companies that responded late last year to Pioneer's solicitations for an acquirer. In February, the two companies signed a merger agreement calling for an exchange of 0.62 Signet shares for each of Pioneer's 2.45 million shares.
The value of Signet's offer - $23.44 per share - was slightly higher than Pioneer's $21.61 book value on March 31.
``For banks, the name of the game going forward is growth, and one way to grow is through the acquisition of thrifts,'' Plack said.
Pioneer, like many thrifts in Virginia, expanded rapidly during the 1980s but was forced by losses on real estate loans, heightened competition, and tougher federal regulation to retrench during the 1990s.
Its assets on March 31 were $395.59 million, a 39 percent decline from $647.36 million in 1989.
For the six months through March, Pioneer posted a respectable 0.95 percent return on average assets, and the level of its capital surpassed regulatory requirements.
However, it continued to wrestle with a high level of troubled assets, which stood at 5.2 percent of its loans and foreclosed properties at the end of March.
Signet, the second-largest banking company based in Virginia, had $10.8 billion of assets at the end of June. In late July, Signet announced plans to spin off its highly profitable credit-card operations as a separate company, which would reduce its size.
KEYWORDS: PIONEER FINANCIAL CORP.
SIGNET BANKING CORP.
by CNB