CHARLESTON, W.Va. and
STAUNTON, Va., Aug. 2, 2012 /PRNewswire/ -- City Holding Company
("City") (NASDAQ: CHCO) and Community Financial Corporation
("Community") (NASDAQ: CFFC) announced today the execution of a
definitive agreement by City to acquire Community and its wholly
owned subsidiary, Community Bank (the "Merger"). Community
operates nine branches along the I-81 corridor in western
Virginia and two branches in
Virginia Beach, Virginia.
The Merger will significantly expand City's presence in
Virginia. City recently completed the acquisition of Virginia
Savings Bank, headquartered in Front
Royal, Virginia. Virginia Savings Bank had assets of
$130 million while Community has
assets of $500 million.
City and Community anticipate the transaction will be completed
in the first quarter of 2013, pending regulatory approvals, the
approval of Community shareholders, and the completion of other
customary closing conditions. The directors of Community have
agreed to vote their shares in favor of the Merger.
Charles R. (Skip) Hageboeck,
President & CEO of City, said, "City has admired the Community
franchise for some time. Community has a solid retail deposit
franchise, operates in markets with higher growth rates than City's
core markets, and has established itself as a significant
commercial lender in both the Staunton and Virginia Beach markets. We are excited
to partner with Community, and believe that City's own emphasis on
community-based banking, and the opportunity to bring additional
products and services to both retail and business customers of
Community, make this a fantastic combination."
Norman C. (Butch) Smiley III,
President & CEO of Community, said, "For nearly 85 years,
Community has served its customers and communities in the
Shenandoah Valley of Virginia.
We are proud of the service we have provided to our customers
and by the community and civic pride our company and our employees
have demonstrated. However, the challenges facing small
community banks and the lack of significant economic growth since
2008, in addition to increasingly stringent regulatory oversight
and expense, led Community to consider partnering with a larger
community bank which shares our commitment to customers and to
local communities. City is a highly respected, profitable and
well-run community bank. Bank Director Magazine ranked City
the #3 best performing bank in the US in 2010. Our shareholders
will benefit from City's financial strength, our customers will
benefit from enhancements to products and services that larger
banks can offer, and our communities will continue to enjoy the
commitment of a bank with strong roots in its communities. We
are excited about combining our business with City."
Under the terms of the agreement, Community shareholders will
receive 0.1753 shares of City common stock for each share of
Community common stock. Based upon the closing price of City's
common stock on Friday, July 27,
2012, the total value of common shares issued is estimated
at $26.1 million, or $6 per share of Community. City's current
annual dividend of $1.40 per share
would amount to approximately 24.5
cents per Community share, on a pro forma basis.
Keefe, Bruyette & Woods, Inc. served as financial advisor to
City. Scott & Stringfellow, LLC served as financial advisor to
Community. Jackson Kelly PLLC served as legal advisor to
City. Silver, Freedman & Taff served as legal advisor to
Community.
City and Community will host a conference call at 10:00AM on Friday, August
3, 2012. The conference call can be accessed by dialing
888-830-6260. The conference ID is 289654. The
presentation slides are available at www.bankatcity.com.
Additional Information about the Merger and Where to Find It
In connection with the proposed Merger City will file a
registration statement on Form S-4 concerning the transaction with
the Securities and Exchange Commission and appropriate state and
federal banking authorities as soon as is practical.
Community will prepare a proxy statement and other relevant
documents concerning the proposed transaction for its
shareholders. COMMUNITY SHAREHOLDERS ARE URGED TO READ SUCH
PROXY AND REGISTRATION STATEMENTS REGARDING THE PROPOSED
TRANSACTION AS THEY BECOME AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS BECAUSE THESE WILL CONTAIN IMPORTANT
INFORMATION. You will be able to obtain all documents filed
with the SEC by City free of charge at the SEC's Internet site
(http://www.sec.gov). In addition, documents filed with the
SEC by City will be available free of charge from the Corporate
Secretary of City Holding Company, 25 Gatewater Road, Cross Lanes, West Virginia 25301, telephone
(304) 769-1100 or from the Corporate Secretary of Community, 38
North Central Avenue, Staunton,
Virginia 24401. The proxy statement/prospectus (when
it is available) and the other documents may also be obtained for
free by accessing City's website at www.bankatcity.com under the
tab "Investor Relations" and then under the heading
"Documents. You are urged to read the proxy
statement/prospectus carefully before making a decision concerning
the Merger.
Participants in the Transaction
City, Community, and their respective officers may be deemed to
be participants in the solicitation of proxies from the
shareholders of Community in connection with the Merger.
Information about the directors and executive officers of Community
and their ownership of Community common stock is set forth in
Community's most recent proxy statement and Form 10-K as filed with
the SEC, which is available at the SEC's Internet site
(http://www.sec.gov) and at Community's address in the preceding
paragraph. Information about the directors and executive
officers of City is set forth in City's most recent proxy statement
and Form 10-K filed with the SEC and available at the SEC's
Internet site and from City at the address set forth in the
preceding paragraph. Additional information regarding the
interests of these participants may be obtained by reading the
proxy statement/prospectus regarding the proposed transaction when
it becomes available.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are intended to be covered by the safe
harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to,
statements about (i) the benefits of the Merger, including future
financial operating results, cost savings enhancements to revenue
and accretion to reported earnings that may be realized from the
Merger, (ii) City's and Community's plans, objectives, expectations
and intentions and other statements contained in this press release
that are not historical facts, and (iii) other statements
identified by words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," "targets," "projects,"
or words of similar meaning generally intended to identify
forward-looking statements. These forward-looking statements
are based upon the current beliefs and expectations of the
respective management of City and Community and are inherently
subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the
control of City and Community. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change. Actual results may differ materially from the
anticipated results discussed in these forward-looking statements
because of possible uncertainties.
The following factors, among others, could cause actual results
to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: (1)
the business of City and Community may not be combined
successfully, or such combination may take longer, be more
difficult, time-consuming or costly to accomplish than expected;
(2) the expected growth opportunities or cost savings from the
Merger may not be fully realized or may take longer to realize than
expected; (3) deposit attrition, operating costs, customer losses
and business disruption following the Merger, including adverse
effects on relationships with employees, may be greater than
expected; (4) the regulatory approvals required for the Merger may
not be obtained on the proposed terms or on the anticipated
schedule; (5) the stockholders of Community may fail to approve the
Merger; (6) legislative or regulatory changes, including changes in
accounting standards, may adversely affect the businesses in which
City and Community are engaged; (7) the interest rate environment
may further compress margins and adversely affect net interest
income; (8) results may be adversely affected by continued
diversification of assets and adverse changes to credit quality;
(9) competition from other financial services companies in City's
and Community's markets could adversely affect operations; (10)
compliance risk involving risk to earnings or capital resulting
from violations of or nonconformance with laws, rules, regulations,
prescribed practices, or ethical standards; (11) the economic
slowdown could continue to adversely affect credit quality and loan
originations; and (12) other factors, which could cause actual
results to differ materially from future results expressed or
implied by such forward looking statements. Additional
factors that could cause actual results to differ materially from
those expressed in the forward-looking statements are discussed in
City's reports (such as its Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K) filed with
the Securities and Exchange Commission and available on the SEC's
Internet site (http://www.sec.gov).
City and Community caution that the foregoing list of factors is
not exclusive. All subsequent written and oral
forward-looking statements concerning the proposed transaction or
other matters attributable to City or Community or any person
acting on their behalf are expressly qualified in their entirety by
the cautionary statements above. City and Community do not
undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the
forward-looking statements are made.
SOURCE City Holding Company