SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) September 7, 1999
PATAPSCO VALLEY BANCSHARES, INC.
(Exact name of Registrant as specified in Charter)
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Maryland 0-24887 52-1996620
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification
of Incorporation) No.)
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8593 Baltimore National Pike, Ellicott City, MD 21043
(Address of Principal Executive Offices/Zip Code)
Registrant's telephone number, including area code: (410) 465-0900
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
Patapsco Valley Bancshares, Inc. (OTCBB:PVYB), announces that is has
entered into a definitive agreement to be acquired by F&M Bancorp (NASDAQ:FMBN),
headquartered in Frederick, Maryland, in a $47 million stock transaction. A copy
of the press release is attached to this Current Report on Form 8-K as Exhibit
99.1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PATAPSCO VALLEY BANCSHARES, INC.
Date: September 7, 1999 By: /s/ John S. Whiteside
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John S. Whiteside
President and Chief Executive Officer
F8185.600
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Exhibit
Number Description of Exhibit
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99.1 Press Release
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Exhibit 99.1
September 7, 1999 FOR IMMEDIATE RELEASE
F&M BANCORP AND PATAPSCO VALLEY BANCSHARES, INC.
ANNOUNCE DEFINITIVE MERGER AGREEMENT
Combined Company Deposit Market Share to Rank in Maryland Top 10
Frederick, MD, September 7, 1999 - F&M Bancorp (NASDAQ:FMBN), headquartered in
Frederick, MD, and Patapsco Valley Bancshares, Inc. (OTCBB:PVYB), headquartered
in Ellicott City, MD, jointly announced that they have signed a definitive
agreement for F&M Bancorp to acquire Patapsco Valley Bancshares, Inc.
The definitive merger agreement provides for a fixed exchange ratio of 1.18
shares of F&M Bancorp's common stock for each share of Patapsco's common stock.
Based on the closing price of F&M Bancorp common stock on September 3, 1999 and
the number of shares of common stock of Patapsco currently outstanding, the
transaction has a value of approximately $47 million, or $34.00 per share of
Patapsco common stock. The transaction is intended to be tax-free to the
stockholders of Patapsco and will be accounted for as a pooling of interests.
Upon completion of the merger, which is subject to the approval of Patapsco's
shareholders and applicable regulatory authorities, Patapsco's subsidiary,
Commercial and Farmers Bank ("CFBank"), will be merged into F&M Bancorp's
commercial banking subsidiary, Farmers & Mechanics National Bank. All branch
locations are expected to remain open.
"We are very pleased to have CFBank become part of the contiguous extension of
our franchise," commented Faye E. Cannon, president and chief executive officer
of F&M Bancorp. "CFBank and Farmers & Mechanics National Bank are financial
institutions deeply rooted in the communities we serve. As community banks, both
organizations have a rich history of providing quality service to customers by
establishing strong relationships and delivering products that meet their needs.
Our combined organizations will strengthen the capabilities of both banks,
offering individual and business customers the convenience of broader geographic
access, enhanced products and services, and increased traditional and
non-traditional delivery channels. By leveraging CFBank's strong market share
throughout the very attractive markets of Howard County, we expect continued
strong growth for our organizations."
Ms. Cannon continued, stating, "Throughout its history, CFBank has a
time-honored tradition of reinvesting in its community, a characteristic shared
by Farmers & Mechanics. Through the combined resources of both companies,
Farmers & Mechanics looks forward to maintaining this commitment to give back to
these communities which are the foundation of our success."
"F&M Bancorp represents an ideal merger partner for us," noted John S.
Whiteside, Patapsco's president and chief executive officer. "The investment in
products and technology
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will continue to support our high standards for quality and competitive customer
service. Our knowledge and experience in our marketplace will also contribute to
the success of this merger. Teaming with F&M Bancorp enables us to capitalize on
their economies of scale and broad product array, bringing add value to our
customers and our shareholders."
F&M Bancorp expects to realize merger synergies by reducing the operating
expenses of the combined company as well as by increasing revenues through sales
opportunities in the attractive, contiguous Howard County market. The combined
organization is expected to offer growth potential through the respective
strengths of the merging banks in a variety of business lines including retail
banking services, commercial and small business lending, mortgage banking,
personal financial planning, brokerage, trust and investment management
services, and a full line of personal and business insurance products. The
transaction is expected to close in late 1999, or early 2000, and is anticipated
to be accretive to F&M Bancorp's earnings per share by the end of 2000.
CFBank operates seven full-service community offices in Howard County, MD and
one in Baltimore County, MD. Subsidiaries include Founders Mortgage Company, C&F
Insurance Agency, Inc., and Central Maryland Service Corporation, a data
processing company. At June 30, 1999, Patapsco had total assets of $174 million,
deposits of $149 million and stockholders' equity of $17 million.
F&M Bancorp had total assets of $1.462 billion at June 30, 1999. Its wholly
owned subsidiaries, Farmers & Mechanics National Bank, Frederick, MD, and Home
Federal Savings Bank, Hagerstown, MD, offer a wide variety of traditional and
non-traditional financial services including trust and investment management,
financial planning, brokerage, mortgage banking, consumer and business
electronic banking, and consumer and commercial business insurance products
through Keller-Stonebraker Insurance, Inc. and Potomac Basin Group Associates,
Inc. The banks operate 44 full-service community offices and 61 ATMs across
central and western Maryland and south-central Pennsylvania.
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This news release contains, among other things, certain forward-looking
statements regarding the combined company following the merger, including
statements relating to cost savings, enhanced revenue and accretion to reported
earnings that may be realized from the merger. Such forward-looking statements
involve certain risks and uncertainties, including a variety of factors that may
cause the combined company's actual results to differ materially from the
anticipated results or other expectations expressed in such forward-looking
statements. Factors that might cause a difference include, but are not limited
to: (1) expected cost savings from the merger may not be fully realized within
the expected time frame, if at all; (2) revenues following the merger may be
lower than expected, or deposit attrition, operating costs or customer loss and
business disruption following the merger may be greater than expected; (3)
competitive pressures among depository and other financial institutions may
increase significantly; (4) costs or difficulties related to the integration of
the business of the companies may be greater than expected; (5) changes in the
interest rate environment may reduce margins; (6) general economic or business
conditions, either nationally or in the states or regions in which the companies
do business, may be less favorable than expected, resulting in, among other
things, a deterioration in credit quality or a reduced demand for credit; (7)
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legislative or regulatory changes may adversely affect the businesses in which
the companies are engaged; and (8) changes may occur in the securities markets.
CONTACT: Media Representatives Analysts and Investors
Faye E. Cannon, President & CEO David L. Spilman, Treasurer
F&M Bancorp F&M Bancorp
301-694-4078 888-694-4170
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