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FIRST UNION ANNOUNCES MERGER AGREEMENT WITH DOMINION BANKSHARES AND ISSUES 1992 EARNINGS ESTIMATE

 FIRST UNION ANNOUNCES MERGER AGREEMENT WITH DOMINION
 BANKSHARES AND ISSUES 1992 EARNINGS ESTIMATE
 CHARLOTTE, N.C., Sept. 21 /PRNewswire/ -- First Union Corporation (NYSE: FTU FTUpr) has entered into an agreement to acquire Dominion Bankshares (NASDAQ-NMS: DMBK) and announced an earnings estimate for the full year 1992.
 Roanoke, Virginia-based Dominion had $8.9 billion in assets and 286 offices in Virginia, Tennessee, Washington and Maryland as of June 30, 1992.
 First Union has agreed to exchange .58 shares of its common stock for each share of Dominion common stock, subject to possible adjustment under certain circumstances. Based on that exchange ratio and First Union's closing stock price of $38 on September 18, 1992, the transaction is valued at approximately $852 million and represents an exchange value of $22.04 for each share of Dominion common stock. The actual exchange value will be based on First Union's stock price at the time of closing.
 In connection with the merger, Dominion has granted First Union an option to acquire up to 19.9 percent of Dominion common stock in certain events.


Consummation of the merger is subject to Dominion shareholder and regulatory approval and to various other conditions of closing.
 First Union currently estimates the acquisition will add approximately $90 million to earnings in 1993, and about $115 million to $170 million annually from 1994 to 1996. First Union expects minimal dilution to earnings per share for 1993 and that the acquisition will be additive to earnings per share thereafter.
 "This is a well-timed opportunity to enter neighboring growth markets that will complement our existing banking region," said Edward E. Crutchfield, Jr., chairman and chief executive officer of First Union Corporation.
 "The management and employees of Dominion have built a fine banking organization with a strong tradition of providing quality banking services and supporting the economic development of its region. We look forward to forming a partnership with the management and employees of Dominion," Crutchfield said.
 First Union's combination with Dominion will produce the nation's ninth largest bank holding company with assets of $61.3 billion and more than 1,200 offices serving approximately seven million customers from Washington to Miami. Dominion's $6.4 billion in mortgage servicing would bring First Union's servicing portfolio to $35.7 billion, the fifth largest in the country. Dominion's $1.5 billion in trust assets would result in a total of $33.5 billion for First Union in trust assets under care.
 "Our review of Dominion's operations suggests that the company is back on course toward improved profitability and a stronger, more focused organization. Our capital strength will enable Dominion to take advantage of further opportunities," Crutchfield said.
 In 1990 Dominion began a series of strategic moves designed to return the company to profitability, including the centralization and standardization of credit policies throughout the franchise.
 "We are pleased to be joining with a partner as strong as First Union and are looking forward to bringing our organizations together to meet the growing needs of our neighboring communities," said Warner N. Dalhouse, chairman and chief executive officer of Dominion Bankshares.
 "I'm very pleased with First Union's concern for economic development issues in our market areas. This merger agreement will ensure that the commitment to our communities and our employees continues to reflect Dominion's strong tradition of leadership," Dalhouse said.
 First Union expects to reduce Dominion's current annual expense base by up to 25 percent, or $100 million, by 1994 through the implementation of common systems and the elimination of redundant operations.
 Restructuring charges of $60 million by Dominion and $25 million by First Union are expected to be included in 1992 results to cover merger- related expenses. The merger is expected to be consummated by the spring of 1993.
 First Union also announced today that it currently expects to report earnings of $480 million to $495 million for the full year of 1992, an increase of approximately 70 percent over the $286 million earned in 1991. On a per common share basis, First Union currently expects 1992 earnings of approximately $3.70 to $3.80, which would compare to earnings of $2.55 per common share in 1991.
 First Union affirmed its September 17, 1992, estimate for third quarter results of approximately $139 million, more than double the $67.7 million reported for the same period last year. On a per common share basis, the third quarter estimate is approximately $1.05, compared to $.61 per common share for the third quarter of 1991. The third quarter earnings estimate would represent a 16 percent return on common equity (ROE).
 The earnings estimates assume the restructuring charges discussed above are taken, that the economic conditions in the corporation's market areas do not deteriorate, that credit quality trends continue to improve and other factors.
 First Union Corporation reported assets of $47.7 billion as of June 30, 1992. The corporation has 990 banking offices in Florida, North Carolina, South Carolina, Georgia and one banking office in Tennessee, and 201 nonbanking offices in 36 states.
 First Union and Dominion executives will hold a news conference at 4:00 p.m. today at the Patrick Henry Hotel, Jefferson Ballroom, 617 South Jefferson Street in Roanoke.
 Television stations may monitor the news conference live on the following coordinates beginning at 4:00 p.m.: KU Band SBS-6, transponder 9, horizontal, 11921.0 Mhz, audio 6.2/6.8; C band Spacenet 1, transponder 2 (channel 3) horizontal, 3760 Mhz.
 Reasons for the Acquisition
 First Union gains entrance into attractive markets that are contiguous to its current banking states.
 First Union expects minimal dilution to earnings per share for 1993 and positive financial contributions to earnings per share beginning in 1994.
 Agreement
 Accounting Treatment: Pooling of interests
 Total Price: $852 million (A)
 Method of Payment: .58 shares of First Union Corporation common stock for each share of Dominion Bankshares common stock, subject to possible adjustment under certain circumstances
 Price/Book Value: 1.65 percent of June 30, 1992 book equity(A)
 Estimated Closing Date: Spring 1993
 Estimated Date of Integration: Around year end 1993
 Number of First Union Common Shares to be Issued: Approximately 23.8 million, assuming all outstanding options and preferred stock are exercised or converted.
 (A) Based on First Union's September 18, 1992, closing price
 and Dominion's common shares outstanding or reserved for
 issuance at June 30, 1992.
 Number of First Union shares outstanding: Approximately 133
 million (not including pending acquisitions)
 Dominion Bankshares Statistics:
 Headquarters: Roanoke, Virginia
 Major Markets: Roanoke, Hampton Roads/Norfolk, Richmond,
 Shenandoah Valley, Western Virginia,
 Nashville, and metropolitan Washington.
 Assets: $8.9 billion
 Loans: $5.7 billion
 Commercial $1.9 billion or 34 percent of loan portfolio
 Commercial Real Estate $1.1 billion or 19 percent " " "
 Installment $1.5 billion or 26 percent " " "
 Home Equity $ 455 million or 8 percent " " "
 First Mortgages $ 403 million or 7 percent " " "
 Credit Card $ 327 million or 6 percent " " "
 Deposits: $7.6 billion
 Equity: $528 million
 Mortgage Servicing Portfolio: $6.4 billion
 Trust Assets Under Care: $1.5 billion
 Bank Branches: 286, 197 in Virginia, 71 in Tennessee, 13 in
 Maryland and 5 in the District of Columbia.
 There are 28 mortgage and 11 trust offices.
 Employees: 5,062
 Source: Dominion Bankshares as of 6/30/92
 First Union and Dominion Bankshares (B)
 Combined Assets: $61.3 billion
 Combined Branches: 1,266
 Combined Loans: $41.7 billion
 Combined Deposits: $48.4 billion
 Combined Equity: $4.3 billion
 Combined Mortgage Servicing Portfolios: $35.7 billion
 Combined Trust Assets: $33.5 billion
 (B) The combined numbers in this section include South
 Carolina Federal, Decatur Federal, Meritor Savings and
 Dominion Bankshares
 Deposit Share Information:
 Florida - 20.59 percent, second place ranking
 North Carolina - 18.58 percent, second place ranking
 Georgia - 11.25 percent, fourth place ranking
 Virginia - 10 percent, fourth place ranking
 South Carolina - 8.50 percent third place ranking
 Tennessee - 4.38 percent, sixth place ranking
 Source: Bancpen Marketing Penetration Analysis- banks only
 (3/31/92).
 -0- 9/21/92
 /CONTACT: Investor -- Maggie Norris, 704-374-4353, Sean Fox, 704-374-7060; Media contacts -- Donna Stockton, 704-374-6999 (office) and 704-331-9619 (home), George Owen at 800-669-5855 (office) and 704-358-3116 (home).
 (FTU DMBK)) CO: First Union Corporation; Dominion Bankshares Corporation ST: North Carolina, Virginia IN: FIN SU: TNM


DF -- CH001 -- 1438 09/21/92 07:33 EDT
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