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FIRST UNION TO ACQUIRE FIRST AMERICAN METRO CORP.

 CHARLOTTE, N.C., Feb. 26 /PRNewswire/ -- First Union Corporation (NYSE: FTU FTUpr) has entered into a definitive agreement to acquire First American Metro Corp., a $4.6 billion banking company with headquarters in McLean, Va., from First American Bankshares, Inc.
 The acquisition will add 174 well-located banking offices and $4.0 billion in deposits to First Union's operations in Virginia, Maryland and the District of Columbia.
 "The First American acquisition is an excellent, cost-effective opportunity to significantly enhance the Virginia, Maryland and Washington, D.C., franchise we began building last year with the announcement of the acquisitions of Dominion Bankshares Corporation and Meritor Savings," said Edward E. Crutchfield Jr., chairman and chief executive officer of First Union Corporation.
 First Union will pay $453 million in cash, or about 124 percent of First American's book value as of Dec. 31, 1992.
 The transaction is currently expected to add 19 cents per share to earnings in 1994 after dilution of 13 cents per share in 1993. First Union expects to complete its acquisition of First American in the second quarter of 1993, and to reduce First American's annual expense base by 30 percent, or $62 million, by 1994.
 "The earnings contribution is based primarily on the significant cost savings that are possible with this in-market merger," said John R. Georgius, president of First Union Corporation. "We will be well- positioned in key markets, but our estimates are not dependent on improvement in the economy or growth in loans and deposits. When combined with the Dominion franchise, this acquisition will give us a total of $12.2 billion in assets and 387 branches in Virginia, Maryland and Washington, D.C."
 The transaction is structured to protect First Union's credit quality in two ways:
 (1) First Union will place selected First American assets in a "segregated asset" portfolio and write the assets down by an estimated $268 million, and (2) an estimated initial reserve of $68 million, or 3.0 percent of performing loans, will be established for the remaining loan portfolio of $2.3 billion.
 Based on an extensive due diligence review, First Union expects the "segregated asset" portfolio to be recorded initially at approximately $306 million. Taking earlier write-downs by First American into account, the segregated assets will be carried at approximately 45 percent of their original book value. Through an accelerated sale of the segregated assets, First Union expects to reduce the pool very substantially by the end of 1993 and dispose of all segregated assets by 1995.
 First American has deposits of $2.1 billion and 100 branches in Virginia, deposits of $0.9 billion and 44 branches in Maryland, and deposits of $1.0 billion and 30 branches in Washington, D.C.
 First American's Trustee Harry W. Albright, Jr., said, "I am very, very pleased by this development. Under this agreement, First American's banking franchise in metropolitan Washington will be sold intact to a strong banking institution, which will assume all the deposit liabilities and acquire substantially all of First American's remaining assets. First Union also will offer continuity and stability for First American's many loyal customers."
 Albright added, "I wish to express my appreciation for the incredible professionalism of the staff of First American, who have so unselfishly given of their time and effort through this difficult period. In addition, I wish to express my appreciation to all the bidders and others who participated in this process, for their unfailing understanding and patience through a spirited bidding process."
 As the First American franchise is added to Dominion, First Union's deposit share in Virginia will increase from 8 percent to nearly 12 percent, moving the company from fourth to second place statewide. First Union will also have 9.5 percent of the deposits in the Washington metropolitan area, giving First Union the second largest share in the banking market that includes the nation's capital. The acquisition will give First Union an additional $2 billion in trust assets, resulting in a total of approximately $39 billion in trust assets when all pending acquisitions are completed. First Union Corporation is the nation's 11th largest bank holding company, based on assets of $51.3 billion as of December 31, 1992. When pending acquisitions are completed, First Union is expected to have assets of $71 billion and be the nation's eighth largest bank holding company.
 Supplemental Information:
 Benefits of the Acquisition
 (1) The acquisition is estimated to result in positive
 contributions to earnings per share in 1994 and beyond
 and only minor dilution in 1993.
 (2) The acquisition offers cost savings of about 30 percent
 because it is an in-market transaction.
 (3) It increases First Union's presence in Virginia,
 Maryland and the District of Columbia.
 First American Agreement
 Accounting Treatment: Purchase accounting transaction.
 Total Price: $453 million.
 Method of Payment: Cash transaction.
 Price/Book Value: 124 percent of book value at December 31,
 1992.
 Estimated Closing Date: Second quarter 1993.
 Estimated Date of Integration: By December 1993.
 First Union and First American Metro Corp.
 Combined Assets: $71.6 billion.
 First Union is expected to be the eighth largest bank holding
 company.
 Combined Branches: 1,474
 Combined Loans: $46.7 billion
 Combined Deposits: $55.9 billion
 Combined Deposits and Branches in Va., Md. and D.C.:
 Assets Deposits Branches
 Virginia: $ 9.4 billion $7.9 billion 291
 Maryland: $ 1.3 billion $1.2 billion 55
 Washington, D.C.:$ 1.5 billion $1.2 billion 41
 Total $12.2 billion $10.3 billion 387
 First Union includes all completed and pending
 acquisitions.
 First American Statistics:
 Headquarters: McLean, Virginia
 Assets: $4.6 billion
 Loans: $ 2.8 billion
 Overall Portfolio: Commercial 58 percent and Consumer 42 percent
 Commercial/Industrial 38 percent
 Consumer: 26 percent
 Residential Mortgage: 16 percent
 Commercial Construction: 12 percent
 Commercial Mortgage: 8 percent
 Deposits and Branches:
 Deposits Branches
 Virginia: $2.1 billion 100
 Maryland: $ .9 billion 44
 Washington, D.C.: $1.0 billion 30
 Total $4.0 billion 174
 Source: First American Bank's December 31, 1992
 financial report.
 Combined Deposit Share Information:
 Virginia: Deposit share - 11.6 percent. Rank - second.
 Washington D.C. MSA: Deposit share - 9.5 percent. Rank - second.
 Virginia, Maryland and Washington, D.C.: Deposit share - 7.3
 percent. Rank - second.
 North and South Carolina, Georgia and Florida: Deposit
 share - 14.17 percent. Rank - first.
 Source: Bancpen 6/92 Marketing Penetration Analysis
 Sheshenoff Information Services
 Banks and Savings & Loans.
 News Media Information: A news conference will be held at 2:00 p.m. today at the Willard Hotel, 1401 Pennsylvania Ave. NW, Washington, D.C. A tape-delayed satellite feed of the news conference will be available at 4:30 p.m. on C-Band: Galaxy 2, Transponder 19; or on KU Band, SBS-6 Transponder 12.
 -0- 2/26/93
 /CONTACT: (Investors) Barbara Massa, 704-374-2555, Maggie Norris, 704-374-4353, and Sean Fox, 704-374-7060; or (Media) Donna Stockton, 704-374-6999 (office) or 704-331-9619 (home), George Owen, 704-383-3842 (office) or 704-358-3116 (home), and Sandy Deem, 704-374-2710 (office) or 704-567-1176 (home), all of First Union Corporation/
 (FTU)


CO: First Union Corporation; First American Metro Corp.; First
 American Bankshares, Inc. ST: North Carolina, Virginia IN: FIN SU: TNM


CM -- CH001 -- 0672 02/26/93 06:45 EST
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Date:Feb 26, 1993
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