THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, April 7, 1995 TAG: 9504070503
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 62 lines
In its latest expansion drive, First Union Corp. has agreed to acquire the largest thrift in Virginia, Arlington-based Columbia First Bank.
First Union, which has aggressively acquired banks and thrifts in the Washington area, said Thursday that it will buy Columbia First through an exchange of shares valued at $222 million.
Columbia First shareholders will receive $60 of First Union stock for each of the thrift's 3.7 million shares.
With $1.5 billion of deposits from the acquisition, First Union's share of bank deposits in Washington and its suburbs will climb from No. 3 to No. 2, the banking company said. NationsBank Corp. has the largest share of deposits in that region.
Charlotte-based First Union said its deposits in the Washington area will total $6.2 billion after the deal, which it expects to complete by late September.
The proposed transaction still must be approved by Columbia First's shareholders and by banking regulators.
Ben Jenkins, president and chief executive officer of First Union's banks in Virginia, Maryland and Washington, said the mix of Columbia First's banking services and the quality of its assets were factors that made it an attractive acquisition candidate.
``It's more like a bank than a traditional thrift,'' he said.
At year-end 1994, Columbia First's assets totaled $2.9 billion, including $1.7 billion of single-family mortgage loans.
First Union also found the locations and features of Columbia First's 33 branches attractive, Jenkins said.
First Union already has 109 branches in the Washington region. The banking company, said Jenkins, has not yet decided which branches might be closed or consolidated.
After weathering the interest-rate squeeze of the early 1980s and difficulties with sour real estate loans, Columbia First became the object of a bitter takeover battle among rival investors in 1988 and 1989.
First Union's offer of $60 in stock for each Columbia First share is 1.67 times the book value of the thrift's shares, Jenkins said.
Columbia First's shares, which are traded on the Nasdaq National Market System, soared $10.50 in heavy trading Thursday to close at $56. First Union's shares closed at $44, up 62 cents for the day.
First Union entered the Washington area in late 1992 by buying the branches and deposits of an ailing savings and loan association, Meritor Savings.
Three months later, it gained a major presence in the region by acquiring Roanoke-based Dominion Bankshares Corp., a banking company whose financial strength had been sapped by heavy losses on real estate lending.
In mid-1993, First Union also acquired the First American banks in Virginia, Washington and Maryland. The banks' parent, First American Metro, had been ordered by the Federal Reserve to find a new owner after First American's ties to the criminally tainted Bank of Credit and Commerce International of Luxembourg came to light.
Earlier this month, First Union bolstered its presence in Northern Virginia and Hampton Roads by acquiring Ameribanc Savings Bank, which was based Annandale. by CNB