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Filed by F&M National Corporation pursuant to Rule
425 under the Securities Act of 1933,
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934.
Commission File No.: 0-5929
Subject Company: Community Bankshares of
Maryland, Inc.
Commission File No.: none
FOR IMMEDIATE RELEASE:
Contact: Alfred B. Whitt, Vice Chairman/President/CEO,
F&M National Corporation
(540) 665-4282
Thomas G. Moore, President
Community Bankshares of Maryland
(301) 464-6300
For Release: August 23, 2000
F&M NATIONAL CORPORATION ANNOUNCES PLAN OF AFFILIATION
WITH COMMUNITY BANKSHARES OF MARYLAND
WINCHESTER, VIRGINIA, August 23, 2000 (NYSE: FMN). F&M National Corporation and
Community Bankshares of Maryland, Bowie, Maryland, today announced the signing
of a definitive agreement for the affiliation of Community with F&M. Through its
4 banking offices, Community provides a broad array of financial services to
individuals and small to medium sized businesses. At June 30, 2000, Community
reported total assets of approximately $79.0 million and total stockholders
equity of approximately $9.0 million.
Under the terms of the agreement, F&M will exchange 0.75 shares of its common
stock for each share of Community stock. The transaction has an indicated value
of approximately $13.1 million, or $18.05 per Community share, based on F&M's
closing price on August 22, 2000, of $24.06. The transaction is calculated at
1.40 times the estimated book value for 2000. The offer is 17.3 times 2000
estimated earnings. It is anticipated the deal will be accretive to F&M book
value and, with an approximate 20% savings in Community's operating expenses,
will be accretive to earnings in 2001.
"We are extremely pleased to have such a quality institution join the F&M family
of community banks and expand our franchise in Maryland," said Alfred B. Whitt,
F&M's President and Chief Executive Officer, in announcing the transaction.
``The affiliation is a positive one for both our organizations, as well as our
respective shareholders and customers."
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William V. Meyers, Chairman of Community, added, "We will have a larger partner
and be able to expand the products and services available to our customers
including, among others, Internet banking, insurance, and trust services. The
transaction will enhance our already strong bank. F&M has a long history of
permitting its banking affiliates to operate in the best interests of the
communities they serve, while offering to these communities the advantages that
are derived from a much larger banking organization. F&M is a people-oriented
organization that enjoys an excellent reputation with their customers, employees
and the communities it serves."
The transaction, expected to be completed no later than the first quarter of
2001, has been approved by each company's Board of Directors and requires the
approval of various regulatory agencies and the shareholders of Community and
satisfaction of other standard conditions. The transaction is intended to
qualify as a tax-free exchange and be accounted for as a pooling of interests.
Community Bank of Maryland, the banking subsidiary, will merge with F&M Bank-
Allegiance to provide financial services throughout its Maryland markets, and
will provide 11 locations in Bowie, Annapolis, Upper Marlboro, Bethesda,
Beltsville, Gaithersburg, Landover, Rockville, Silver Springs, and Wheaton.
F&M National Corporation is a multi-bank holding company headquartered in
Winchester, Virginia, with assets in excess of $3.28 billion at June 30, 2000,
and 128 banking offices. An acquisition of $310 million in deposits and 15
locations was announced on May 4 and is scheduled to close on August 25, 2000.
On July 6, F&M and Atlantic Financial Corp, Newport News, Virginia, with total
assets of approximately $385 million, announced the signing of a definitive
agreement for the affiliation of Atlantic with F&M. F&M currently operates ten
banking affiliates: eight in Virginia which are F&M Bank-Winchester, Winchester;
F&M Bank-Massanutten, Harrisonburg; F&M Bank-Richmond, Richmond; F&M Bank-
Central Virginia, Charlottesville; F&M Bank-Emporia, Emporia; F&M Bank-Peoples,
Warrenton; F&M Bank-Northern Virginia, Fairfax; and F&M Bank- Highlands,
Covington; and in West Virginia, F&M Bank-West Virginia, Ranson; and in
Maryland, F&M Bank-Allegiance, Bethesda.
F&M offers insurance and financial services through its subsidiaries, F&M- Shomo
& Lineweaver and F&M-J.V. Arthur. F&M also operates F&M Trust Company. F&M's
common stock is listed on the New York Stock Exchange under the symbol FMN.
Forward-Looking Statements:
This press release contains certain forward-looking statements about the
proposed affiliation of F&M and Community. These statements include statements
regarding the anticipated closing date of the transaction, 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. Certain factors that could cause actual results to differ materially from
expected include, but are not limited to, 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 F&M and
Community, 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 F&M and Community are
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engaged, and changes in the securities markets. For more information on factors
that could affect expectations, see F&M's Annual Report on Form 10-K for the
year ended December 31, 1999.
Shareholders of F&M and Community 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 F&M with the U. S. Securities and Exchange Commission
in connection with the proposed transaction.
* * * * * *
The press release as issued on August 23, 2000 omitted the following disclosure
which is being made in accordance with Rule 165 of the U. S. Securities and
Exchange Commission ("SEC").
The foregoing may be deemed to be offering materials of F&M National Corporation
in connection with F&M's proposed acquisition of Community Bankshares of
Maryland on the terms and subject to the conditions in the Agreement and Plan of
Reorganization, dated August 23, 2000, between F&M and Community Bankshares of
Maryland.
Shareholders of Community Bankshares of Maryland and other investors are urged
to read the proxy statement/prospectus that will be included in the registration
statement on Form S-4 which F&M will file with the SEC in connection with the
proposed merger because it will contain important information about F&M,
Community Bankshares of Maryland, the merger, the persons soliciting proxies in
the merger and their interests in the merger and related matters. After it is
filed with the SEC, the proxy statement/prospectus will be available for free,
both on the SEC's website (http://www.sec.gov) and from F&M and Community
Bankshares of Maryland as follows:
Secretary
F&M National Corporation
9 Court Square
P. O. Box 2800
Winchester, Virginia 22604
Phone: (540) 665-4200
Secretary
Community Bankshares of Maryland
16410 Heritage Boulevard
Bowie, Maryland 20716
Phone: (301) 464-6300
In addition to the proposed registration statement and proxy
statement/prospectus, F&M files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
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reports, statements or other information filed by either company 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. F&M's filings with the SEC are also available to the public
from commercial document-retrieval services and on the SEC's website at
http://www.sec.gov.
