THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, April 27, 1995 TAG: 9504270334
SECTION: BUSINESS PAGE: D6 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 55 lines
Bank of Hampton Roads in Chesapeake has agreed to acquire the parent of Seaboard Savings Bank in Virginia Beach for $7.7 million in cash and stock, the two institutions announced Wednesday.
``This is a big plus for us because it more than doubles our deposits in Virginia Beach and gives us three good branch locations,'' said Jack W. Gibson, president and chief executive officer of the Chesapeake community bank.
In addition, Seaboard's mortgage lending will fit well with his bank's residential construction lending, Gibson said.
Bank of Hampton Roads agreed to pay $1.55 for each of the 4.99 million shares of Seaboard Bancorp Inc., parent of Seaboard Savings Bank. That works out to 1.35 times Seaboard's book value of $1.15 per share. Seaboard's shares, which are traded over the counter, closed Wednesday at $1.25, unchanged from Tuesday's close.
Those Seaboard shareholders receiving stock will get one share of Bank of Hampton Roads for every 10.32 shares of Seaboard.
Gibson said he expected his bank and Seaboard to reach a definitive merger agreement soon and for Bank of Hampton Roads to conduct its ``due diligence'' examination of Seaboard's books within 30 days. The merger could be completed as early as Oct. 1, he said.
The proposed transaction still must be approved by shareholders of both institutions and by banking regulators.
Gibson said he expected Bank of Hampton Roads to keep all of Seaboard's 30 employees.
Organized in 1987, Bank of Hampton Roads expanded its branch network in 1991 by buying Coastal Virginia Bank and in 1992 by buying the deposits and some assets of a failed bank in Norfolk, New Atlantic Bank.
The Chesapeake bank has nine branches in Chesapeake, Virginia Beach, Suffolk and Norfolk.
Seaboard, which reported a profit of $804,000 for 1994 and a reduction in its foreclosed real estate, had been hobbled in previous years by heavy losses on its real estate lending. It responded to those difficulties by shrinking in size and raising $4 million of additional capital in 1993 from a rights offering to existing shareholders and a public stock offering.
Gibson said he did not expect Bank of Hampton Roads to find any undisclosed problem assets on Seaboard's books. ``I think their loan problems are behind them,'' he said.
According to their merger agreement, two Seaboard directors will join the Bank of Hampton Roads board of directors. In addition, two Seaboard executives, president P. Douglas Richard and executive vice president Chris P. Kyriakides, will be named senior vice presidents of the bank. by CNB