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AMSOUTH TO ACQUIRE FIRST CHATTANOOGA FINANCIAL

 AMSOUTH TO ACQUIRE FIRST CHATTANOOGA FINANCIAL
 BIRMINGHAM, Ala., June 29 /PRNewswire/ -- AmSouth Bancorporation


(NYSE: ASO) has reached a definitive agreement to acquire First Chattanooga Financial Corporation (NASDAQ: FCHT), parent company of First Federal Bank, FSB.
 The agreement was announced jointly today by Spencer H. Wright, chairman, president and chief executive officer of First Chattanooga, and John W. Woods, AmSouth Bancorporation's chairman and chief executive officer.
 Under the terms of the agreement AmSouth will exchange a combination of 1.26 shares of AmSouth stock and $1 in cash for each share of First Chattanooga stock. Based on AmSouth's stock price at the time of the offer of $29-3/8 per share, the transaction is valued at approximately $106.0 million, which represents an exchange value of $38.00 for each First Chattanooga share and an offer price of 1.26 times First Chattanooga's March 31, 1992, book value. In connection with the merger, First Chattanooga has granted AmSouth an option to acquire up to 19.9 percent of its common stock in certain events.
 The transaction, which is to be accounted for as a purchase, is expected to be completed by the end of the first quarter of 1993, pending approval by regulatory authorities, First Chattanooga shareholders and other closing conditions. The transaction is expected to have no earnings per share dilution for AmSouth shareholders.
 In making today's announcement, AmSouth CEO Woods said the acquisition of First Chattanooga, with its second-ranking market share in the Chattanooga area, is consistent with AmSouth's expansion plans.
 "We have expressed an interest in building a major AmSouth franchise in Tennessee for a number of years, and our agreement with First Chattanooga is an important step toward achieving that goal," Woods said. "We sincerely believe that this development will prove in the best interests of the customers, shareholders and employees of both financial institutions."
 First Chattanooga CEO Wright said, "AmSouth has a regional reputation for strength, soundness and quality within the banking industry, and we are excited over the prospects of our customers benefiting from AmSouth's varied product portfolio." He added that AmSouth's extensive experience in consumer, mortgage and business banking, plus its nationally recognized trust division, "will significantly enhance our efforts to help the citizens and businesses of Chattanooga achieve their financial goals."
 First Chattanooga reported March 31, 1992, assets of $1.039 billion and deposits of $892.2 million. The company operates 15 offices in Chattanooga plus four additional Tennessee offices located in South Pittsburgh, Cleveland, Dayton and Fayetteville, and one office in Summerville, Ga.
 With assets of $9.2 billion and deposits of $8.3 billion, Birmingham-based AmSouth presently operates 155 banking offices throughout Alabama, 23 banking offices in northwest Florida, and three banking offices in the Nashville area. In addition, the corporation operates 15 mortgage banking offices in eight southeastern states. AmSouth initially entered Tennessee in June 1991 with the purchase of Investors Savings Bank, FSB, in Nashville, from the Resolution Trust Corporation.
 Reasons for the Acquisition
 Of First Chattanooga Financial Corporation
 1. The Chattanooga market in Tennessee is a natural expansion of
 AmSouth's markets. AmSouth presently operates 155 offices
 throughout Alabama of which 50 are located in north Alabama,
 many near the Tennessee border.
 2. AmSouth's goals include holding the number one or number two
 position in market share in the major markets it serves. With
 the addition of First Chattanooga, AmSouth will enter the
 Chattanooga market ranked second in deposit market share.
 3. AmSouth and First Chattanooga share a number of business
 philosophies regarding the value of customer service and
 responsiveness to community needs. In addition, First
 Chattanooga will be converted into a full-service commercial
 bank where AmSouth's extensive corporate and business banking
 and trust capabilities will complement First Chattanooga's
 consumer banking focus.
 4. The acquisition will provide AmSouth with an entry bank into
 the northern Georgia market.
 Description of Transaction
 Accounting treatment: Purchase
 Total price: $106.0 million
 Method of payment: AmSouth will exchange a combination of 1.26
 shares of AmSouth common stock and $1 in cash for each share
 of First Chattanooga stock.
 Estimated closing date: End of the first quarter of 1993
 Number of AmSouth shares to be issued: Approximately 3.5 million
 shares
 Number of AmSouth shares outstanding as of May 31, 1992: 40.1
 million
 Total amount of cash consideration: $3.3 million
 Combined assets: Approximately $10.2 billion
 First Chattanooga Statistics
 (March 31, 1992)
 Headquarters: Chattanooga, Tenn.
 Assets: $1,038.8 million
 Loans: Residential First Mortgages $ 451.9 million
 Commercial Real Estate Mortgages $ 139.5 million
 Consumer $ 26.9 million
 Commercial $ 5.3 million
 Total loans: $ 623.6 million
 Nonperforming Assets: $28.3 million
 Allowance for Loan Losses: $9.9 million
 Deposits: $892.2 million
 Equity: $82.8 million
 Equity to Assets Ratio: 7.97 percent
 (All capital ratios are above current minimum requirements.)
 -0- 6/29/92
 /CONTACT: Media: Jim Underwood, 205-326-5184; Investors: Harvey E. Campbell, 205-326-5316, both of AmSouth; or Bert Hicks of First Chattanooga, 615-752-1505/
 (ASO FCHT) CO: AmSouth Bancorporation; First Chattanooga Financial Corporation ST: Alabama, Tennessee IN: FIN SU: TNM


BN-EA -- AT020 -- 4881 06/29/92 16:29 EDT
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Date:Jun 29, 1992
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