THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, August 23, 1996 TAG: 9608230050
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 42 lines
Southern National Corp., North Carolina parent of the former Commerce Bank in Virginia Beach, said Thursday it will expand its presence in Virginia by buying a Richmond thrift.
Southern National, based in Winston-Salem, said it agreed to acquire Fidelity Financial Bankshares Corp. for Southern National stock worth $59.4 million.
``Richmond is a dynamic market and the next logical step in our building a statewide franchise in Virginia,'' said John A. Allison, Southern National's chairman and chief executive officer.
Fidelity's principal subsidiary, Fidelity Federal Savings Bank, has assets of $321 million and operates seven branches in the Richmond area.
The price of Fidelity's shares jumped 6 3/4, or 43 percent, to 22 5/8 in very active trading Thursday. Fidelity disclosed Wednesday that it was negotiating with a potential suitor, prompting a 20 percent rise in its stock price that day.
Southern National's shares, which are traded on the New York Stock Exchange, closed Thursday at 30 7/8, down 1/4.
Southern National said 10-year-old Fidelity Federal will be folded into its Branch Banking & Trust Co. of Virginia subsidiary. The transaction still must be approved by Fidelity's shareholders and by regulators. Southern National expects to complete the deal in early 1997.
The merger agreement calls for Southern National to exchange 0.793 of a share for each of Fidelity's 2.4 million shares. Its offer is slightly more than twice Fidelity's book value and more than 16 times the thrift's expected earnings for 1996, Southern National said.
Southern National bought Commerce Bank, the biggest community bank in Hampton Roads, in early 1995. Last month, it replaced the Commerce name with Branch Banking & Trust, which Southern National has used for its banks in North and South Carolina.
The planned acquisition will bring Southern National's assets in Virginia to more than $1 billion. With total assets of $20.6 billion in the Carolinas and Virginia, Southern National is the seventh-largest banking company in the Southeast. by CNB