THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, November 19, 1994 TAG: 9411190430
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 58 lines
CENIT Bancorp Inc., parent of the Norfolk-based thrift CENIT Bank, announced an agreement Friday to buy Princess Anne Bank in Virginia Beach through an exchange of stock worth about $9 million.
If approved, the acquisition will significantly increase CENIT Bancorp's presence in Virginia Beach, where it has three branches.
According to their merger plan, Princess Anne will remain a commercial bank. The community bank will absorb CENIT's Virginia Beach branches and $83.9 million of CENIT deposits in that city, said Michael S. Ives, president and chief executive officer of CENIT Bancorp.
CENIT, with branches throughout Hampton Roads, had total deposits of $354 million at the end of September and $508 million of assets.
Princess Anne's assets on Sept. 30 stood at $76 million, and its deposits amounted to $68.8 million. All three of Princess Anne's branches are in Virginia Beach.
Ives and J. Morgan Davis, president and CEO of Princess Anne, said they expect to complete the transaction during the second quarter of 1995. Their definitive agreement still must be approved by bank regulators and by shareholders of both institutions.
The transaction would be unusual in that Princess Anne, a commercial bank, would become part of a thrift holding company.
Because combinations of this sort have been rare, ``people may ask more questions'' during the review by regulators, Ives said. However, ``We don't see anything that would be an impediment to the transaction,'' he added.
The merger agreement calls for CENIT to swap 0.336 of a share for each of Princess Anne's 1.03 million shares.
The offer's per-share value is $8.75, or slightly more than 1 1/2 times the book value of Princess Anne shares.
CENIT's shares, which trade on the Nasdaq National Market System, closed Friday at $26.
Some Princess Anne operations, including its data processing, will be consolidated into CENIT operations after a merger, Ives and Davis said. But there are no plans to reduce Princess Anne's 50-person work force, they said.
Officers and directors at the Virginia Beach community bank will remain in place, and two members of its board will join CENIT's board. In addition, one of CENIT's directors will take a seat on the Princess Anne board.
Ives and Davis said that their merger agreement evolved from a casual conversation they had while attending a business function last July.
By acquiring Princess Anne, CENIT would have a vehicle for converting its thrift to a commercial bank. But the company has no plans for such a move, Ives said, because converting CENIT Bank to a commercial bank would trigger a significant tax liability for the company. by CNB