THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, September 2, 1994 TAG: 9409020633
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Short : 45 lines
Crestar Financial Corp., the most aggressive acquirer of thrifts in Virginia, said Thursday it agreed to buy a Northern Virginia savings and loan association for $22.28 million in cash and stock.
The Richmond-based parent of Crestar Bank said it will pay $17 in cash and Crestar common shares for each share of Jefferson Savings & Loan, F.A., which is based in Warrenton.
Crestar's price is almost twice Jefferson's book value of $11.71 million, or $8.94 per share.
Barry Koling, a Crestar spokesman, said Jefferson was attractive because it provided Crestar with entry into several new markets, including Warrenton, Culpeper, Front Royal and Luray. Jefferson has eight branches and $265 million of deposits.
So far this year, Crestar has acquired five thrifts with combined assets of $2 billion and 80,000 customers.
The transaction with Jefferson still must be approved by thrift regulators and by Jefferson's 1,700 shareholders. It is scheduled to close before year's end.
Jefferson settled on Crestar after hiring investment bankers earlier this year to solicit potential acquirers, said Thomas W. Winfree, the thrift's president and chief executive officer.
Jefferson's earnings have been hurt this fiscal year by the declining value of a mortgage-backed security on its books, Winfree said. The security is a real estate mortgage investment conduit, or REMIC. It lost value because of the rapid repayment of home loans standing behind the security.
Because of its charges against earnings to cover the loss of value, Jefferson reported a net loss of $205,000 for the first nine months of its Sept. 30 fiscal year, Winfree said.
For two months this summer, Jefferson also failed to meet one of its three capital standards but returned to full compliance on Aug. 31, Jefferson's president said.
Koling said Crestar was fully aware of Jefferson's capital situation. ``That's a nonissue as far as the transaction goes,'' he said. by CNB