SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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):
December 16, 1997
ONE VALLEY BANCORP, INC.
(Exact Name of Registrant as specified in its charter)
WEST VIRGINIA No. 0-10042 No. 55-0609408
(State or other jurisdiction (Commission (IRS employer
of incorporation) File Number) Identification No.)
ONE VALLEY SQUARE
P.O. BOX 1793
CHARLESTON, WV 25326
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (304) 348-7000
(Registrant's former address of principal executive offices)
<PAGE>
Item 5. Other Events.
On December 16, 1997, One Valley Bancorp, Inc., a West Virginia
corporation (the "Registrant"), entered into an Agreement and Plan of Merger by
and between the Registrant and FFVA Financial Corporation, a Virginia
corporation ("FFVA Financial"), for a tax-free merger of the two companies
pursuant to which each outstanding share of common stock, par value $0.10 per
share, of FFVA Financial would be converted into 1.05 shares of common stock,
par value $10.00 per share, of the Registrant (the "Proposed Merger").
This current registration on Form 8-K contains forward looking statements with
respect to the financial condition, results of operations and business of the
Registrant and, assuming the consummation of the merger, a combined
Registrant/FFVA Financial including statements relating to: (a) the cost savings
and accretion to reported earnings that will be realized from the merger; (b)
the impact on revenues of the merger; and (c) the restructuring charges expected
to be incurred in connection with the merger. These forward looking statements
involve certain risks and uncertainties. Factors that may cause actual results
to differ materially from those contemplated by such forward looking statements
include, among others, the following possibilities: (1) expected cost savings
from the merger cannot be fully realized or realized within the expected time
frame; (2) revenues following the merger are lower than expected; (3)
competitive pressure among depository institutions increases significantly; (4)
costs or difficulties related to the integration of the business of the
Registrant and FFVA Financial are greater than expected; (5) changes in the
interest rate environment reduce interest margins; (6) general economic
conditions, either nationally or in Virginia and West Virginia, are less
favorable than expected; or (7) legislation or regulatory changes adversely
affect the businesses in which the combined company would engage. These
statements involve risk and uncertainty. Actual results, accordingly, may
differ materially from management expectations.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99.1 Press release dated December 16, 1997 announcing the
Proposed Merger.
99.2 Investor presentation materials used by the Registrant on
December 17, 1997 relating to the Proposed Merger.
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<PAGE>
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.
Date: December 16, 1997
ONE VALLEY BANCORP, INC.
By: __________________________
Name: J. Holmes Morrison
Title: President and Chief
Executive Officer
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<PAGE>
Exhibit Index
99.1 Press release dated December 16, 1997 announcing the Proposed Merger.
99.2 Investor presentation materials used by the Registrant on December 16,
1997 relating to the Proposed Merger.
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FOR IMMEDIATE RELEASE
For more information contact:
Lloyd Calvert, SVP, One Valley
304-348-7207
One Valley Announces Further Virginia Expansion
With Merger With
FFVA Financial Corporation
Charleston, WV, Dec. 16 - - One Valley Bancorp (NYSE: OV) and FFVA Financial
Corporation (NASDAQ - NMN: FFFC) today announced the signing of a definitive
agreement to merge creating a $5.4 billion asset banking company in West
Virginia and Virginia.
Under the terms of the agreement, One Valley will exchange 1.05 shares of One
Valley's common stock for each share of FFVA's common stock. The transaction is
valued at approximately $204 million dollars, or $42.98 per share of FFVA
Financial common stock, based on the last closing price of $40.94 per share of
One Valley common stock. The merger is expected to be accounted for as a
pooling-of-interests. Both companies have rescinded previously approved stock
repurchase approvals.
One Valley is a $4.5 billion asset bank holding company based in Charleston,
West Virginia and recently announced an acquisition of 15 branches in Central
Virginia with assets of $321 million. FFVA is the holding company for the $567
million asset First Federal Savings Bank of Lynchburg headquartered in
Lynchburg, Virginia.
J. Holmes Morrison, President and Chief Executive Officer of One Valley Bancorp,
Inc. and James L. Davidson, Jr. President and Chief Executive Officer of FFVA
made the joint announcement. The transaction is expected to close early in
second quarter of 1998, subject to approval by the appropriate regulatory
authorities and stockholders of One Valley and FFVA.
The merger of First Federal Savings Bank of Lynchburg into One Valley Bank of
Central Virginia will create the second largest bank in Lynchburg based on
deposits. FFVA has five branches in Lynchburg, two in South Boston and one each
in Madison Heights, South Hill, Keysville, Altavista and Farmville. Mr. Davidson
will serve as Chairman of the new $1.3 billion national bank affiliate of One
Valley.
The impact on 1998 earnings is expected to be relatively neutral. However, in
1999 and thereafter, it is expected that the transaction will be accretive to
earnings per share primarily through improved interest margins, fee income
enhancements and expense reductions. Both One Valley and FFVA will recognize
$1.8 million each for a total of $3.6 million in merger related costs in the
fourth quarter of 1997.
<PAGE>
FFVA is the third acquisition made by One Valley in the Virginia market. The
first acquisition completed in April 1996 was the Lynchburg based CSB Financial
with 10 locations. One Valley announced in November plans to acquire nine
Jefferson National and six Central Fidelity branches from Wachovia Corporation.
That acquisition is expected to be completed by mid February 1998. The FFVA
acquisition will provide 12 additional locations resulting in a total of 37 One
Valley locations in Virginia with $1.3 billion in total assets.
Mr. Morrison commented, "One Valley's recent expansion into the Central Virginia
market enables us to expand and diversify our franchise while capitalizing on
Virginia's strong growth prospects. We look forward to building strong new
community partnerships with FFVA and providing our new customers with additional
products and services. The acquisition also continues our efforts to provide
greater convenience to our current Virginia customers," Morrison said.
Mr. Davidson said, "FFVA is particularly pleased to join with a company that is
a respected leader in the rapidly growing financial services industry. For FFVA
this represents a strategic merger that we are confident will benefit our
stockholders, customers and employees. One Valley is a strong, well-managed
institution with a proven commitment to shareholder value and customer and
community service."
Mr. Morrison added in emphasizing One Valley's commitment to the employees and
customers of the combined Central Virginia bank that, "One Valley has agreed to
put an Operations Center in Lynchburg, Virginia." He also pledged to increase
the charitable contributions of the combined banks.
In connection with the agreement, FFVA has granted to One Valley an option to
purchase 9.9% of FFVA's shares and agreed to pay a termination fee under certain
circumstances.
One Valley Bancorp is a bank holding company based in Charleston, West Virginia.
One Valley operates as a super community bank with 11 affiliate banks and 89
locations serving West Virginia and Virginia. One Valley was recently ranked the
8th best performing bank in the country according to the May 1997 U.S. Banker
magazine's ranking of the largest 100 banks.
# # # # #
Analyst Advisory: A conference call for analysts is scheduled for 8 a.m. EST.
The number to call is 1-888-422-7128, ID# 767259H.
ONE VALLEY BANCORP
MERGER WITH FFVA FINANCIAL CORPORATION
[December 17, 1997]
[8:00 AM(EST)]
Conference Call: (888) 422-7128
Access Code: 767259 H
<PAGE>
DISCLAIMER
- -------------------------------------------------------------------------------
This current registration on Form 8-K contains forward looking statements with
respect to the financial condition, results of operations and business of One
Valley Bancorp Inc. and, assuming the consummation of the merger, a combined One
Valley/FFVA including statements relating to: (a) the cost savings and accretion
to reported earnings that will be realized from the merger; (b) the impact on
revenues of the merger; and (c) the restructuring charges expected to be
incurred in connection with the merger. These forward looking statements involve
certain risks and uncertainties. Factors that may cause actual results to differ
materially from those contemplated by such forward looking statements include,
among others, the following possibilities: (1) expected cost savings from the
merger cannot be fully realized or realized within the expected time frame; (2)
revenues following the merger are lower than expected; (3) competitive pressure
among depository institutions increases significantly; (4) costs or difficulties
related to the integration of the business of One Valley Bancorp and FFVA
Financial Corporation are greater than expected; (5) changes in the interest
rate environment reduce interest margins; (6) general economic conditions,
either nationally or in Virginia and West Virginia, are less favorable than
expected; or (7) legislation or regulatory changes adversely affect the
businesses in which the combined company would engage. These statements involve
risk and uncertainty. Actual results, accordingly, may differ materially from
manangement expections.
<PAGE>
TRANSACTION SUMMARY
- -------------------------------------------------------------------------------
TRANSACTION TYPE: Stock-for-stock exchange
FIXED EXCHANGE RATIO: 1.05
ACCOUNTING TREATMENT: Pooling-of-interests/tax-
free exchange
IMPLIED TRANSACTION PRICE: $42.98 per share(1)
IMPLIED AGGREGATE TRANSACTION
VALUE: $204.1 million
TRANSACTION MULTIPLES:
PRICE/BOOK VALUE 2.4lx
PRICE/TANGIBLE BOOK VALUE 2.46x
PRICE/1998 EPS 23.75x
WALKAWAY: FFVA has the right to terminate the transaction if
One Valley's stock price falls by more than 15% on
an absolute basis and 10% compared to an index
unless One Valley exercises its right to "top up"
OPTION AGREEMENT: FFVA has granted One Valley a 9.9% stock option
exercisable under certain conditions and a
termination fee of $3.5 million
BOARD REPRESENTATION: One Valley's Board expanded to add two existing
FFVA board members
EXPECTED CLOSING: Second quarter 1998
PRE-TAX COST SAVINGS: $3.3 million with 85% achieved within one year of
conversion and the remaining 15% achieved within
two years of conversion
IMPACT ON PROJECTED EPS:
1998 Neutral
1999 Accretive 0.83%
ACQUISITION CHARGE: $1.8 million pre-tax, $1.2 after-tax
RE-ISSUANCE OF TREASURY
SHARES: One Valley/FFVA will re-issue approximately 750,000
treasury shares. Effective immediately, both One
Valley and FFVA have rescinded their share
repurchase programs
- --------
(1) Based on One Valley's closing share price of $40.94 on
December 15, 1997.
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<PAGE>
STRATEGIC RATIONALE
- -------------------------------------------------------------------------------
o Significantly enhances Virginia banking franchise:
o Meaningful market share gain in attractive Lynchburg market
o Solidifies commitment to multi-state presence
o Expands customer base
o In-market transaction offering significant synergy opportunities
o Compatible strategies and operations
o Low risk transaction
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<PAGE>
LYNCHBURG BANKING MARKET SHARE ANALYSIS
- -------------------------------------------------------------------------------
TOTAL
DEPOSITS MARKET
RANK INSTITUTION BRANCHES (000S) SHARE
- ---- ----------- -------- ------ -----
1 Wachovia Corporation 19 $771,833 38.46%
ONE VALLEY BANCORP - PRO 16 424,123 21.13
FORMA
2 Crestar Financial Corp. 8 235,751 11.75
3 One Valley Bancorp. 9 219,425 10.93
4 FFVA Financial Corp. 7 204,698 10.20
5 NationsBank Corp. 6 183,063 9.12
6 First Virginia Banks 6 116,160 5.79
7 First NB of Altavista 2 107,850 5.37
8 Mainstreet BankGroup Inc. 6 83,884 4.18
9 BB&T Corp. 1 25,351 1.26
10 Peoples National Bank 1 21,375 1.07
Total 69 $2,007,027
- ----------------
Source: SNL Securities. Deposits as of 6/30/96. Data is pro forma for
all pending acquisitions, including One Valley's acquisition of 10
Wachovia branches.
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<PAGE>
PRO FORMA BRANCH NETWORK
- -------------------------------------------------------------------------------
[Map of Pro Forma Branch Network]
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<PAGE>
ATTRACTIVE FRANCHISE DEMOGRAPHICS
- -------------------------------------------------------------------------------
[GRAPH OF 1997 AVERAGE HOUSEHOLD INCOME (000s)]
HIGH INCOME BASE
Charlottesville MSA $54.9
Lynchburg MSA $41.3
West Virginia $38.1
[GRAPH OF PROJECTED 1997-2001 POPULATION GROWTH]
STRONG GROWTH PROSPECTS
Charlottesville MSA 7.0%
Lynchburg MSA 3.6%
West Virginia 0.8%
- ------------------
Source: SNL Securities
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<PAGE>
EPS IMPACT
- --------------------------------------------------------------------------------
o Transaction is epxected to be EPS neutral in 1998 and produce approximately
0.8% accretion in 1999.
o Transaction economics are driven by cost savings equal to 28% of FFVA's
projected operating expenses in 1998 and 5% in 1999. Termination of ESOP
and Restricted Stock Plan alone account for 48% of total savings.
o Numerous opportunities exist to increase revenue (which are not factored
into the projections)
o Commercial Banking Products o Trust
o Investment Products o ATM/Debit Cards
o Cash Management
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<PAGE>
SUMMARY EPS IMPACT
- -------------------------------------------------------------------------------
(Dollars in Millions, Except per Share Amounts)
1998 1999
--------------------- ---------------------
Total Per Share Total Per Share
------- --------- ------- ---------
Projected One Valley
Net Income(a) $60.2 $2.22 $67.5 $2.40
Projected FFVA Net
Income(a) 8.6 1.81 9.4 1.99
Projected After Tax
Synergies 1.7 -- 2.5 --
Earnings on Re-
issued Shares(b) 1.4 -- 1.4 --
Excess Capital
Leverage(c) 2.0 -- $2.2 --
------- --------- ------- ---------
Pro Forma Net Income $73.9 $2.22 $83.0 $2.42
======= ========= ======= =========
Accretion -- 0.83%
- ---------------------
(a) One Valley and FFVA earnings estimates are based on street estimates
for 1998 and grown at 9% and 10%, respectively for 1999.
(b) Assumes proceeds from re-issued shares of approximately $30 million are
reinvested in whole loans yielding 7.0% pre-tax.
(c) Core capital at FFVA, before reissuance, above that amount required to
maintain a tangible capital ratio at FFVA equal to One Valley's current
ratio of 8.00% is assumed to be redeployed and earn an after-tax rate of
6.0%.
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<PAGE>
PROJECTED COST SAVINGS
- -------------------------------------------------------------------------------
(Dollars in Thousands)
PROJECTED SAVINGS
-------------------------
1998 1999
------ -----
OPERATING EXPENSES
Compensation & Benefits $2,228 $500
Occupancy & Equipment 224 --
Other Operating Expenses 371 --
------ ----
TOTAL PRE-TAX SAVINGS $2,844 $500
Cost Savings as a % of FFVA's
1997 estimated Operating
Expenses 28% 5%
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<PAGE>
ESTIMATED COSTS RELATED TO ACQUISITION
- --------------------------------------------------------------------------------
(Dollars in Millions)
PRE-TAX AFTER-TAX
------- ---------
CREDIT RELATED - -
MERGER RELATED COSTS:
Employee Related $ 450 $ 293
Property, Furniture & Fixtures 350 228
Fees and Other Conversion Costs 1,000 650
------- ------
TOTAL PRE-TAX COSTS RELATED TO ACQUISITION $1,800 $1,171
======= ======
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<PAGE>
KEY RATIOS
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AT SEPTEMBER 30, 1997
----------------------------------------------
ONE VALLEY(a) FFVA COMBINED
------------- ------------ ------------
CAPITAL ADEQUACY
Total Equity/Assets 8.71% 13.31% 9.19%
Tang. Common Equity/
Tang. Assets 7.42 13.08 8.02
Intangibles/Equity 16.01 2.01 13.88
ASSET QUALITY
NPL's/Loans 0.32% 0.26% 0.32%
Reserves/NPL's 423.36 373.99 419.37
Reserves/NPA's 364.21 361.92 364.90
Reserves/Loans 1.38 0.99 1.34
- -------------------
(a) Pro forma for Wachovia branch purchase.
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<PAGE>
PRIOR ACQUISITION HISTORY
- -------------------------------------------------------------------------------
o Since 1991, One Valley has completed five acquisitions, with the
acquisition of 15 Wachovia Virginia branches still pending:
ASSETS/DEPOSITS
ACQUIRED
YEAR SELLER ($MM)
- ----- ------- -----
1991 Commercial Bank of Bluefield $26
(WV)
1991 Atlantic Financial of West Virginia 525
1993 Mountaineer Bankshares of West 748
Virginia (WV)
1995 Point Bancorp Inc. (WV) 54
1996 CSB Financial Corporation (VA) 336
1997 Wachovia (VA Branch Purchase) 319
o The acquisition of CSB Financial marked One Valley's
expansion into the Virginia market
o One Valley has always achieved or exceeded stated
synergies within the time initially stated
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<PAGE>
SUMMARY PRO FORMA BALANCE SHEET
- -------------------------------------------------------------------------------
(Dollars in Thousands)
AT SEPTEMBER 30, 1997
------------------------------------------------------
ONE VALLEY
ONE VALLEY(a) FFVA PRO FORMA
----------- ----------- -----------
Cash & Securities $1,613,072 $227,218 $1,840,290
Loans, Net 2,995,054 326,616 3,321,670
Intangibles 67,313 1,518 68,831
Other Assets 152,258 11,914 164,712
----------- ----------- -----------
Total Assets $4,827,697 $567,266 $5,394,963
=========== =========== ===========
Total Deposits $3,783,563 $413,873 $4,197,436
Borrowings 574,818 74,000 648,818
Other Liabilities 48,961 3,894 52,855
----------- ----------- -----------
Total Liabilities $4,407,342 $491,767 $4,899,109
----------- ----------- -----------
Total Equity 420,355 75,499 495,854
----------- ----------- -----------
Total Liabilities &
Equity $4,827,697 $567,266 $5,394,963
=========== =========== ===========
- -------------------
(a) Pro forma for Wachovia branch purchase.
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<PAGE>
LOAN PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
(Dollars in Millions)
At September 30, 1997
[PIECHART OF LOAN PORTFOLIO COMPOSITION - ONE VALLEY]
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<PAGE>
DEPOSIT COMPOSITION
- -------------------------------------------------------------------------------
(Dollars in Millions)
At September 30, 1997
[PIECHART OF DEPOSIT COMPOSITION - ONE VALLEY]
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<PAGE>
SUMMARY
- -------------------------------------------------------------------------------
o Significant franchise enhancement
o High growth potential
o Accretive to earnings
o Provides greater strategic flexibility
o Low execution risk
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