THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, October 12, 1994 TAG: 9410120429
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 60 lines
First Union Corp. agreed to buy Ameribanc Investors Group in a move that will add substantially to its Hampton Roads market share, the bank said Tuesday.
First Union said it will pay $108 million in cash for Ameribanc, the Annandale-based parent of Ameribanc Savings Bank, which operates eight branches in Hampton Roads, including one in Williamsburg.
Charlotte-based First Union, the nation's ninth-largest bank holding company with $72.6 billion in assets, also announced Tuesday that its third-quarter net income rose 24 percent thanks to increased lending and fee income.
The $250 million of deposits at Ameribanc's Hampton Roads branches will boost First Union's market share here by 36.2 percent. First Union operates 34 branches in the region with $690 million in deposits, or a little less than 10 percent of all bank deposits.
First Union will pay $3 for each of Ameribanc's 36 million outstanding shares, which represents a premium of about 50 percent on Ameribanc's book value.
The savings and loan has a total of $1.1 billion in assets and $752 million in deposits. It operates 20 branches in Northern Virginia and one in Charlottesville, in addition to the eight in Hampton Roads. It also has three mortgage offices in Virginia, including one in Virginia Beach.
The purchase is expected to be completed during the first half of 1995, subject to approval by regulators and Ameribanc shareholders. The thrift will be merged with First Union National Bank of Virginia.
``Ameribanc is a solid institutionthat will further enhance First Union's operations in the metropolitan Washington and Norfolk/Hampton Roads areas,'' said Benjamin P. Jenkins III, president of First Union's Virginia bank. ``It also will establish First Union's first presence in the attractive Charlottesville market.''
First Union first entered Virginia with its purchase of Dominion Bankshares Corp. in late 1992. It consolidated its position in the state with the 1993 purchase of First American Bankshares Inc. It's now the third-largest bank in the state with $6.8 billion in deposits and 193 branches.
First Union said its net income rose to $241.8 million, or $1.35 a share, in the quarter ended Sept. 30, from $189.2 million, or $1.12 per share, in the same period last year.
First Union attributed the increasing income to loan growth and fee income. Loan growth was led by consumer loans, including credit cards and home equity loans, pushing its total loans as of Sept. 30 to $50 billion from $45.5 billion a year earlier.
The increase in loans boosted net interest income to $799.3 million from $728.8 million a year earlier. The provision for loan losses was reduced to $25 million from $50 million.
Non-interest income rose to $303.3 million from $288 million a year earlier.
In trading on the New York Stock Exchange, First Union's shares rose $1 1/8 per share to $43 each. by CNB