ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Friday, December 1, 1995 TAG: 9512010031
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Charter Federal Savings Bank's shareholders voted overwhelmingly Thursday to sell the thrift to First American Corp. of Nashville, Tenn., a stock deal worth $77 million.
Just over 80 percent of the shareholders voted for the sale at their meeting in Bristol. A two-thirds majority was needed for approval, but about 45 percent of the shares were held by three major stockowners who initially had proposed selling the company.
Charter officials flew immediately to Nashville to sign the deal, and Charter branches will open today as offices of First American. Customers, however, should see little immediate change in the operations.
Shareholders will be paid 0.3398 of a share of First American stock for each share of Charter Federal they hold. Charter Federal's stock closed at $15.25 a share, rising 37 1/2 a share in Thursday's trading of 43,200 shares. First American's stock closed at $45.62 1/2 a share, up 75 cents a share in trading of 142,500 shares. Both stocks traded on the Nasdaq.
Charter, based in Bristol, moved into Western Virginia about 10 years ago when First Federal Savings & Loan of Bristol acquired Peoples Federal Savings & Loan Association of Roanoke and First Federal Savings & Loan Association of New River Valley.
S. Spencer Edmunds, who was president of Peoples Federal at the time, said its roots went back to about 1881, when it opened in Roanoke as Peoples Perpetual Building & Loan Association.
Edmunds, who now works for Wingate & Co., said Peoples Federal at the time was a traditional savings and loan, simply taking deposits and making mortgage loans. "It was a successful association for years," Edmunds said.
Charter's sale Thursday is "just one more small part of the overall consolidation of the financial services industry," said Warner Dalhouse, chairman of First Union Corp. of Virginia, who has long been active in Roanoke banking. He cited as part of that trend the recent aborted talks between NationsBank and Bank of America, and the merger of Manufacturers Hanover with Chemical Bank.
First Union itself has completed more than 60 mergers in the past few years, he said, and Dominion Bankshares Corp., predecessor of First Union of Virginia, acquired more than 30 banks during its history. The trend has accelerated this year, he added.
Dalhouse said he has since gotten over the belief that old names or local ownership matter in banking.
He said First American is a well-run bank that is large enough to offer its customers a wider range of products and services than Charter could provide.
The entry of First American into the Western Virginia marketplace, he said, "is good for the [Charter] shareholders and good for the community."
The irony is, he said, that many observers in the banking industry expect First American to be acquired by an even larger bank. Banks in Ohio are said to be looking at First American. First American officials have acknowledged that the bank is viewed widely as a takeover target, though they have maintained their intent to remain independent.
Midsized banks such as First American and Signet in Virginia probably will be acquired over the next six to seven years, Dalhouse said.
LENGTH: Medium: 62 linesby CNB