THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, December 9, 1994 TAG: 9412090615
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Short : 45 lines
Shareholders of Commerce Bank overwhelmingly approved a merger offer Thursday from BB&T Financial Corp., despite a sharp falloff in the value of the transaction.
In June, Wilson, N.C.-based BB&T agreed to acquire Commerce in a stock swap worth $111 million, or $40.78 per Commerce share.
But a 19 percent decline in BB&T's share price has reduced the value of the offer to $90.56 million, or $33.11 per Commerce common share.
Because of favorable trends in BB&T's financial performance, the merger still represents a very good deal for Commerce shareholders, G. Robert Aston Jr., president and chief executive officer of Virginia Beach-based Commerce, said at a shareholders' meeting Thursday.
The merger, he said, is due to be completed in January.
According to the agreement, Commerce shareholders will receive 1.305 shares of BB&T common stock for each of their 2.73 million common shares.
For Commerce customers, the combination with BB&T will be largely invisible, Aston said. Commerce, he said, will continue operating under its own name for three years or until the board of BB&T's Virginia holding company votes to change it.
There are no plans to change Commerce's management or operations. But because BB&T emphasizes residential loans, Commerce probably will step up home lending at its branches, Aston predicted.
The acquisition of Commerce will provide BB&T with 21 branches, more than $630 million of deposits and almost $700 million of assets in Hampton Roads. BB&T's goal is to expand this foothold into a presence throughout Virginia, Aston said.
But the Commerce-BB&T combination has been overshadowed since late July by a BB&T agreement for a much larger merger with Southern National Corp., a bank holding company based in Lumberton, N.C. Shareholders of BB&T and Southern National are scheduled to vote on their merger agreement Thursday.
If completed as planned, the combination of Commerce, BB&T and Southern National will create a banking company with assets of $18 billion, $14 billion of deposits and more than $1.4 billion of shareholders' equity. by CNB