Filed by Cardinal Financial
Corporation Pursuant to Rule 425
under the Securities Act of 1933,
as amended, and deemed filed
pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934, as
amended
Subject Company: Heritage Bancorp,
Inc. Commission File No.: 000-24933
CARDINAL FINANCIAL CORPORATION AND HERITAGE BANCORP, INC. AGREE TO MERGE
FAIRFAX, Va.--(BUSINESS WIRE)--April 18, 2000--Cardinal Financial
Corporation (Nasdaq: CFNL) and Heritage Bancorp, Inc. (Nasdaq: HBVA) today
announced the signing of a definitive agreement providing for the merger of the
two companies.
The merger will result in an institution with combined assets of
approximately $170.0 million and a network of seven full-service banking
locations in northern Virginia.
Under the terms of the merger agreement, Cardinal will issue a
combination of cash and shares of convertible preferred stock to the
shareholders of Heritage in exchange for all of the shares of Heritage's common
stock. Heritage has 2,294,617 shares of its common stock outstanding.
Heritage's shareholders will be able to elect to receive $6.00 in cash
or 1.2 shares of convertible preferred stock for each share of Heritage stock,
subject to certain adjustments to permit Cardinal to issue an equal amount of
cash and convertible preferred stock. Cardinal estimates that the total value of
the consideration to be paid to Heritage's shareholders will be approximately
$13.8 million.
The preferred stock will have a liquidation value of $5.00 and the
right to dividend payments at the rate of 7.25% per annum. Each share of
preferred stock will also be convertible into shares of Cardinal's common stock
at any time at the option of its holder.
The Heritage Bank, the wholly owned subsidiary of Heritage, is
headquartered in McLean, Virginia. It is expected that The Heritage Bank will be
renamed "Cardinal Bank - Potomac" and become a subsidiary of Cardinal, the
surviving company in the merger.
The new Cardinal Bank subsidiary would take the place of Cardinal Bank
- - Alexandria/Arlington, N.A. (in organization), whose charter application is
currently pending. Upon approval of the merger, the existing loan production
office and retail facility of Cardinal Bank - Alexandria/Arlington, N.A. (in
organization) would be moved into the new Cardinal Bank.
"We are excited by the strategic fit and resulting opportunities that
this merger presents to both Cardinal and Heritage," said John H. Rust, Chairman
of the Board of Cardinal. "Cardinal will be acquiring a profitable bank, which
will allow us to avoid the previously expected start-up losses that would be
associated with opening a new bank in Alexandria. We are also looking forward to
accelerating our growth opportunities, which will be afforded primarily by
Heritage's funding capacity and the banking experience and marketing strength
that Heritage has in the markets adjacent to our current northern Virginia
operations."
"The merger will significantly improve our customer service
capabilities," said Harold E. Lieding, Chairman of the Board of Heritage.
"Because of Cardinal's expanded product line and office systems resources,
Heritage's customers will have access to a wider variety of value-added bank and
financial products. The merger will help us avoid substantial expense associated
with planned capital expansion for products and systems. Our management and
lending staffs also respect each other, and we look forward to the joining of
our commitment to customer service."
Following the merger, three members of Heritage's Board of Directors
will join Cardinal's Board. Subject to certain conditions including receipt of
regulatory approval and approval of the shareholders of Cardinal and Heritage,
the closing of the merger is anticipated to occur in the third quarter of 2000.
The merger will be accounted for under the purchase method.
Cardinal is headquartered in Fairfax, Virginia and is the holding
company for Cardinal Bank, N.A. in Fairfax; Cardinal Bank - Manassas/Prince
William, N.A. in Manassas, Virginia; Cardinal Bank - Dulles, N.A. in Reston,
Virginia; and Cardinal Wealth Services, Inc., an investment advisory firm in
Fairfax.
Heritage is a publicly owned bank holding company and the parent of The
Heritage Bank, a Virginia chartered commercial bank. The Heritage Bank currently
operates two full-service offices in McLean and Sterling, Virginia. It is
planning to open a third branch in the Tyson's Corner area of northern Virginia
in May of this year.
The Heritage Bank offers a broad range of lending and deposit services
to individual and commercial customers in Loudoun and Fairfax Counties in
Virginia. As of March 31, 2000 Heritage had approximately total assets of $64.4
million, deposits of $48.0 million and stockholders equity of $8.6 million. At
March 31, 2000, net loans receivable were $36.0 million.
This press release contains certain forward-looking statements about
the proposed merger of Cardinal and Heritage. These statements include
statements regarding the anticipated closing date of the merger, anticipated
cost savings, and anticipated future results.
Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They often include words
like "believe," "expect," "anticipate," "estimate," and "intend" or future or
conditional verbs such as "will" "would" "should" "could" or "may."
Certain factors that could cause actual results to differ materially
from expected include delays in completing the merger, difficulties in achieving
cost savings from the merger or in achieving such cost savings within the
expected time frame, difficulties in integrating Cardinal and Heritage,
increased competitive pressures, changes in the interest rate environment,
changes in general economic conditions, legislative and regulatory changes that
adversely affect the business in which Cardinal and Heritage are engaged, and
changes in the securities markets.
For more information on factors that could affect expectations, see
Cardinal's Annual Report on Form 10-KSB for the year ended December 31, 1999 and
Heritage's Annual Report on Form 10-KSB for the year ended December 31, 1999.
Shareholders of Cardinal and Heritage and other investors are urged to
read the proxy statement/prospectus that will be included in the Registration
Statement on Form S-4 to be filed by Cardinal with the U.S. Securities and
Exchange Commission in connection with the proposed merger.
The proxy statement/prospectus will contain important information about
Cardinal, Heritage and the merger and about the persons soliciting proxies in
the merger, including the officers and directors of Cardinal and Heritage, and
their interests in the merger, such as their stock ownership in Cardinal and
Heritage.
After it is filed with the SEC, the proxy statement/prospectus will be
available for free, both on the SEC's web site (www.sec.gov) and from Cardinal
and Heritage as follows:
Cardinal:
L. Burwell Gunn, Jr.
President and Chief Executive Officer
Cardinal Financial Corporation
10555 West Main Street, Suite 500
Fairfax, Virginia 22030
703/279-5060
Heritage:
Terrie G. Spiro
President and Chief Executive Officer
Heritage Bancorp, Inc.
1313 Dolley Madison Boulevard
McLean, Virginia 22101
703/356-6610
Cardinal and Heritage also file annual, quarterly and special reports,
proxy statements and other information with the SEC.
Investors may read and copy any reports, statements or other
information filed by each company on the SEC's website at www.sec.gov or at the
SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549
or at the SEC's other public reference rooms in New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms.
- -----------------
Contact:
Cardinal Financial Corporation, Fairfax
L. Burwell Gunn, Jr.
President and Chief Executive Officer
703/279-5060
or
Heritage Bancorp, Inc.
Terrie G. Spiro
President and Chief Executive Officer
703/356-6610
