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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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ABIGAIL ADAMS NATIONAL BANCORP, INC.
(Name of Subject Company)
ABIGAIL ADAMS NATIONAL BANCORP, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $10.00 PER SHARE
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
003390101
(CUSIP number of Class of Securities)
BARBARA DAVIS BLUM
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ABIGAIL ADAMS NATIONAL BANCORP, INC.
1627 K STREET, N.W.
WASHINGTON, D.C. 20006
(202) 466-4090
(Name, address and telephone number of person authorized to receive notice and
communications on behalf of the person(s) filing statement)
Copy to:
D. Michael Lefever
COVINGTON & BURLING
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
(202) 662-6000
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ITEM 1 SECURITY AND SUBJECT COMPANY
The name of the subject company is Abigail Adams National
Bancorp, Inc., a Delaware corporation ("Bancorp"), and the address of its
principal executive office is 1627 K Street, Washington, DC 20006. The title
of the class of equity securities to which this Statement on Schedule 14D-9
(the "Statement") relates is the common stock, par value $10.00 per share, of
Bancorp (the "Common Stock"), including the associated Common Share Purchase
Rights to purchase shares of Common Stock (the "Rights") issued pursuant to the
Rights Agreement, dated as of April 12, 1994, between Bancorp and The First
National Bank of Maryland, as Rights Agent, as amended by a First Amendment to
Rights Agreement, dated as of April 20, 1995 (the "Rights Agreement"). Unless
the context otherwise requires, all references to the Common Stock shall
include the associated Rights.
ITEM 2 TENDER OFFER OF THE BIDDER
This Statement relates to the tender offer disclosed in the
Tender Offer Statement on Schedule 14D-1, dated August 16, 1995 (the "Schedule
14D-1"), of Marshall T. Reynolds ("Mr. Reynolds") to purchase up to 81,806
shares of Common Stock, consisting of the outstanding shares of Common Stock
that are not owned by Mr. Reynolds or his associates (the "Minority Shares"),
at a price of $21.00 per share net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 16,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Tender Offer").
According to the Schedule 14D-1, the business address of Mr.
Reynolds is P.O. Box 2968, Huntington, West Virginia 25728.
ITEM 3 IDENTITY AND BACKGROUND
(a) The name and business address of Bancorp, which is the
person filing this Statement, is set forth in Item 1 above.
(b) (i) Severance Agreements. On April 7, 1994, The Adams National
Bank, a wholly owned subsidiary of Bancorp (the "Bank"), entered into Severance
Agreements with each of the following officers of the Bank: Alexander Beltran
-- Vice President, Operations, Devin Blum -- Vice President, Lending, Thomas O.
Griel -- Senior Vice President, Lending, Joyce R. Hertz, Corporate Secretary,
Kimberly J. Levine, Senior Vice President & Treasurer, Melrose M. Nathan --
Vice President, Treasury, and Bijan Partovi -- Vice President, Lending (the
"Severance Agreements"). Each Severance Agreement provides that in the event
of a Change in Control (as defined therein), the officer is entitled to resign
from the Bank at any time within one year thereafter and receive a lump sum
severance payment equal to his or her base salary for one year at the rate in
effect at the time of the Change in Control. Neither the acquisition by Mr.
Reynolds of the Pledged Shares (as defined below) nor the Tender Offer will
constitute a Change in Control by reason of actions taken by the Board of
Directors of Bancorp.
(ii) Employment Agreement. On March 31, 1993, Bancorp and the
Bank entered into an employment agreement with Barbara Davis Blum, the
Chairwoman, President and Chief Executive Officer of Bancorp and the Bank.
Under the agreement, as amended July 26, 1995, Ms. Blum is employed through
December 31, 1995. If prior to such date, Ms. Blum resigns, is not reelected
to any of the positions that she currently holds, is deprived in any material
respect of the responsibility and authority usual for a chief executive officer
of a national bank and a bank holding company, or upon the expiration of the
employment agreement, the parties fail to enter into a new employment
agreement, she is entitled to a one-time payment equal to one year's salary.
(iii) Background. Pursuant to a Term Loan Agreement, dated as of
August 24, 1988, Citibank, N.A. ("Citibank"), made a loan in the aggregate
amount of $4,500,000 (the "Loan") to seven stockholders of Bancorp, consisting
of Mark G. Griffin, then a director of Bancorp, Karen S. Griffin, his spouse,
the
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E.A. Griffin Trust, of which Mr. Griffin was the sole trustee, Richard W.
Naing, a director of Bancorp, Maria L. Naing, his spouse, the Wynmark Trust, a
trust for the children of Mr. Naing of which Mr. Griffin originally was the
trustee, and Barbara Davis Blum (collectively, the "Borrowers"). Mr. Griffin
and Mr. Naing at the time of the Loan also were directors of the Bank. As
collateral for the Loan, the Borrowers granted to Citibank a security interest
in 203,038 shares of Common Stock, representing approximately 71% of the
outstanding shares of Common Stock (the "Pledged Shares").
In a Schedule 13D, filed August 26, 1992 (the "Schedule 13D"),
or in amendments thereto, Citibank has reported the information set forth in
this paragraph with respect to the Loan and the Pledged Shares. On October 31,
1989, the Borrowers defaulted on the payment of interest on the Loan, and on
November 15, 1989, Citibank gave notice of acceleration of the Loan. In May
1991, through a proceeding in the United States Bankruptcy Court for the
District of Columbia, Citibank acquired the right to sell the 82,938 Pledged
Shares owned by Richard W. Naing and Maria L. Naing. In June 1992, through a
proceeding in the United States Bankruptcy Court for the District of Maryland,
Citibank acquired the right to sell the 86,994 Pledged Shares originally owned
by Mark G. Griffin, Karen S. Griffin and the E.A. Griffin Trust. A Settlement
Agreement, dated as of November 16, 1993, confirmed the right of Citibank to
sell the 22,000 Pledged Shares owned by The Wynmark Trust. A Settlement
Agreement, dated June 30, 1994, confirmed the right of Citibank to sell the
11,106 Pledged Shares owned by Barbara Davis Blum.
Beginning in 1990, Bancorp and its advisors participated in
various discussions from time to time with Citibank and its advisors concerning
the disposition by Citibank of the Pledged Shares or a sale of Bancorp. On
July 25, 1990, the Bancorp Board of Directors appointed a Special Committee of
Outside Directors, comprised of those of Bancorp's directors who were not
either employees or significant stockholders of Bancorp (the "Special
Committee"), to evaluate proposals and advise the Board of Directors on matters
pertaining to a possible change of control of Bancorp. In the Schedule 13D,
Citibank reported that on August 10, 1992, it had entered into a nonbinding
letter of intent to sell the Pledged Shares to National Bancshares, Inc.
("NBI"). Also during this period through early 1994, Bancorp permitted various
prospective buyers, including NBI, to engage in due diligence with respect to
Bancorp and the Bank. In June 1993, Bancorp received a proposal to purchase
100% of the outstanding Common Stock at a purchase price of $14.00 per share in
cash or $17.00 per share in stock of the acquiror. This proposal was rejected
by both Citibank and the Special Committee as inadequate.
On August 31, 1993, the Special Committee proposed to Citibank
that Bancorp undertake a public offering of securities, the proceeds of which
would be used to repurchase the Pledged Shares from Citibank. However, after a
reevaluation of the anticipated proceeds from a public offering, Bancorp and
Citibank were unable to reach agreement on the purchase price and the form of
consideration payable to Citibank in exchange for the Pledged Shares.
In an Amendment No. 1 to the Schedule 13D, filed on April 14,
1994, Citibank reported that on April 12, 1994, it had entered into a Stock
Purchase Agreement, dated as of April 11, 1994, with NBI, pursuant to which
Citibank agreed to sell to NBI, subject to NBI obtaining the required
regulatory approvals and other conditions, a minimum of 191,932 of the Pledged
Shares and a maximum of 203,038 of the Pledged Shares (the difference being
represented by the Pledged Shares owned by Ms. Blum) at a purchase price of
$19.81 per share (the "NBI Agreement").
On April 12, 1994, without knowledge of the NBI Agreement, the
Bancorp Board of Directors, on the recommendation of the Special Committee,
adopted the Rights Agreement. The purpose of the Rights Agreement was to
provide the Board of Directors with adequate time to respond effectively to a
takeover attempt and in a manner that would maximize the value of Bancorp for
all shareholders.
On April 14, 1994, Citibank filed a complaint against Bancorp
and each of its directors in the Delaware Chancery Court seeking to enjoin
Bancorp from implementing the Rights Agreement or distributing the Rights. The
complaint alleged, among other things, that the Rights Agreement violated
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Delaware law and that in adopting the Rights Agreement the directors of Bancorp
violated their fiduciary duty to all of the shareholders of Bancorp and
tortiously interfered with the consummation of Citibank's proposed sale of the
Pledged Shares to NBI. On June 24, 1994, Bancorp filed an answer to the
complaint denying the allegations and in a counterclaim against Citibank
requested that the court enter a judgment declaring the Rights Agreement valid
and lawfully adopted under Delaware law (collectively, the "Delaware
Litigation").
On June 1, 1994, Bancorp entered into an engagement letter
with Baxter Fentriss and Company ("Baxter Fentriss"), pursuant to which Baxter
Fentriss agreed to assist Bancorp in identifying potential buyers and to advise
Bancorp concerning any proposals received. See "Item 5 -- Persons Retained,
Employed or to be Compensated."
In an Amendment No. 2 to its Schedule 13D, filed on June 3,
1994, Citibank reported that on June 1, 1994, Citibank and NBI entered into a
Stock Purchase Agreement, as Amended (the "Amended NBI Agreement"), under which
the purchase price of the Pledged Shares was reduced to $16.00 per share,
subject to certain further adjustments, and NBI's obligation to purchase the
Pledged Shares was made contingent upon certain additional conditions,
including an amendment by Bancorp of the Rights Agreement to permit the
consummation by NBI of the purchase of the Pledged Shares.
On June 2, 1994, NBI, by letter to the Special Committee,
proposed an agreement with Bancorp whereby NBI would offer to purchase the
Minority Shares at $16.00 per share. The proposal was contingent upon
Bancorp's agreement (i) to take such actions as are necessary to prevent the
purchase by NBI of the Pledged Shares from triggering the Rights, (ii) to grant
NBI access to the books, records and premises of Bancorp and the Bank in order
to conduct a further due diligence investigation, (iii) to not take any action
to impede the acquisition by NBI of the Pledged Shares, (iv) to take all
actions necessary such that NBI, upon the purchase of the Pledged Shares, would
have effective control over the management and policies of Bancorp and the
Bank, including the right immediately to appoint the directors and officers of
Bancorp and the Bank, and (v) to take all action necessary so that the purchase
by NBI of the Pledged Shares would not cause any of the rights or benefits
under the Severance Agreements to become exercisable or triggered.
On June 29, 1994, the Special Committee met to consider the
NBI proposal. On the advice of Baxter Fentriss that the offer of $16.00 per
share for the Minority Shares was not fair from a financial point of view to
the holders of such shares, the Special Committee rejected the proposal. By
letter dated June 29, 1994, Shireen Dodson, the Chairman of the Special
Committee, advised NBI that the Special Committee had rejected the NBI
proposal. At the same meeting, Baxter Fentriss also advised the Special
Committee of a proposal received from Mr. Reynolds (i) to purchase the Pledged
Shares from Citibank at $16.00 per share and (ii) to make an offer to purchase
the Minority Shares at $22.00 per share. The proposal was not subject to a
financing contingency.
In a letter, dated July 20, 1994, counsel to Bancorp, at the
direction of the Special Committee, advised counsel for NBI of the proposal
received from Mr. Reynolds. In the letter, counsel for NBI further was
informed that NBI would be furnished with the same information that was
provided to Mr. Reynolds in connection with his due diligence investigation if
NBI (i) was prepared to increase its offer for the Minority Shares to a level
that equaled or exceeded the Reynolds proposal, (ii) could demonstrate to the
satisfaction of the Special Committee that it had the financial and regulatory
capability to consummate the transaction on or before September 30, 1994 (the
then-anticipated closing date of a transaction involving Mr. Reynolds), and
(iii) posted, as did Mr. Reynolds, a good faith deposit of not less than
$325,000. In a letter, dated July 27, 1994, counsel for NBI responded with a
tentative proposal to increase to $22.00 per share its offer for the Minority
Shares, subject to a complete due diligence investigation. In the letter,
counsel for NBI indicated that NBI believed that it could make a reasoned
decision about presenting a formal offer within 30 days after it has completed
its due diligence and that, if it made a formal proposal, it would post the
requested security deposit at that time.
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On July 29, 1994, the Special Committee rejected the NBI's
tentative proposal. Among the factors taken into consideration in reaching
this decision were that the NBI proposal was not superior to the price that Mr.
Reynolds proposed to offer for the Minority Shares, the proposal was subject to
further due diligence with no time limit, and NBI had not offered any assurance
that it would be able to finance the acquisition of the Pledged Shares or the
Minority Shares.
In an Amendment No. 3 to its Schedule 13D, filed on August 5,
1994, Citibank reported that on July 29, 1994, Citibank terminated the Amended
NBI Agreement and that it had commenced negotiations with Mr. Reynolds. In an
Amendment No. 4 to its Schedule 13D, filed April 26, 1995, Citibank reported
that as of March 30, 1995, in settlement of litigation in Delaware court,
Citibank and NBI entered into a Standstill and Release Agreement under which
certain claims of NBI relating to Citibank's efforts to sell the Pledged Shares
were resolved (contingent upon Citibank completing the sale of the Pledged
Shares on or before September 19, 1995).
On April 19, 1995, the Board of Directors of Bancorp, on the
recommendation of the Special Committee, authorized the entry by Bancorp into
an agreement with Mr. Reynolds pursuant to which he agreed that, if his
purchase of the Pledged Shares from Citibank was completed, he would within 20
business days commence the Tender Offer (the "Reynolds Agreement"). Under the
Reynolds Agreement, Mr. Reynolds also agreed that, until the Tender Offer is
completed, neither he nor any assignee of his rights to purchase the Pledged
Shares will vote the Pledged Shares, without the consent of the Bancorp Board
of Directors, to change in any respect the composition of the Bancorp Board of
Directors. In consideration for the commitment of Reynolds to undertake the
Tender Offer, Bancorp agreed (i) to amend the Rights Agreement to prevent the
purchase by Mr. Reynolds of the Pledged Shares or the Tender Offer from
triggering the exercisability of the Rights, (ii) to take such actions as are
necessary to ensure that neither the purchase of the Pledged Shares nor the
Tender Offer will constitute a "Change in Control" under the Severance
Agreements and (iii) not to, or not permit the Bank to, (A) amend the Severance
Agreements (except as described above), (B) amend the Employment Agreement
among Bancorp, the Bank and Barbara Blum (except that an extension of the
termination date to a date that is not more than 90 days following the
completion of the purchase of the Pledged Shares would be permitted), (C) issue
any stock, or any options, warrants or rights to purchase stock, or any
long-term debt securities, (D) enter into, or materially increase the level of
contributions to, any pension, retirement, stock option, profit sharing,
deferred compensation, bonus, group insurance or similar plan for directors,
officers or employees, (E) other than in the ordinary course of business,
mortgage, pledge or dispose of any assets, incur any indebtedness, increase the
compensation or benefits payable to directors, officers or employees, incur any
material obligation, or enter into any material contract, or (F) amend the
Certificate of Incorporation or Bylaws of Bancorp or the Articles of
Association or Bylaws of the Bank. The foregoing restrictions are subject to
the exception that Bancorp or the Bank is permitted to adopt a stock option
plan for its directors and employees and during the first year of the plan
issue options to purchase shares of Common Stock not in excess of 2 1/2% of the
total number of shares outstanding.
On April 20, 1995, Bancorp amended the Rights Agreement to
provide that neither (i) the entry by Mr. Reynolds into an agreement with
Citibank to purchase the Pledged Shares or the purchase by Mr. Reynolds (or any
of his permitted assignees) of the Pledged Shares nor (ii) the announcement,
conduct or completion of the Tender Offer will trigger the exercisability of
the Rights.
On April 21, 1995, Citibank and Mr. Reynolds entered into a
Stock Purchase Agreement, pursuant to which Mr. Reynolds agreed to purchase
the Pledged Shares at a purchase price of $17.00 per share. This purchase was
completed on July 21, 1995. In connection with the closing of the purchase of
the Pledged Shares, Bancorp, the Bank and each director of Bancorp (other than
Mr. Naing) delivered a release releasing Citibank and its directors, officers,
employees, agents and representatives from any and all claims relating to
actions taken by Citibank with respect to the Pledged Shares. Correspondingly,
Citibank delivered a release releasing Bancorp, the Bank and each director
(other than Mr. Naing who declined to deliver a release in favor of Citibank),
officer, employee, agent and representative of Bancorp and the Bank from any
and all claims relating to Citibank's efforts to dispose of the Pledged Shares.
In
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addition, Bancorp, the Bank and each director (other than Mr. Naing) and
executive officer of Bancorp delivered a release releasing NBI and its
directors, officers, employees, agents and representatives from any and all
claims relating to NBI's efforts to purchase the Pledged Shares.
Correspondingly, NBI delivered a release releasing Bancorp, the Bank and each
director, executive officer, employee, agent and representative of Bancorp and
the Bank (other than Mr. Naing who declined to deliver a release in favor of
NBI). On July 21, 1995, the Delaware Litigation was dismissed with prejudice.
ITEM 4 THE SOLICITATION OR RECOMMENDATION
(a) The Board of Directors of Bancorp (with one director absent)
unanimously has determined that the Tender Offer is fair to the holders of the
Minority Shares. However the Board of Directors is making no recommendation as
to whether the holders of the Minority Shares should tender their shares of
Common Stock pursuant to the Tender Offer.
A copy of the letter to the holders of the Minority Shares
communicating the recommendation of the Bancorp Board of Directors is filed in
Exhibit 1 hereto and is incorporated herein by reference.
(b) The agreement of Mr. Reynolds to effect the Tender Offer was
made at the insistence of the Bancorp Board of Directors. The objective of the
Board of Directors in securing this commitment was to afford the holders of the
shares not purchased from Citibank the opportunity, at their election, either
to sell some or all of their shares of Common Stock at a fair price or to
continue to maintain their investment in Bancorp.
The conclusion of the Bancorp Board of Directors as to the
fairness of the Tender Offer price is based on the oral opinion of Baxter
Fentriss delivered at a meeting of the Board of Directors on April 19, 1995
(confirmed in writing in a letter attached hereto as Exhibit 99.2) that a
price of $21.00 per share for the Minority Shares is fair to the holders
thereof from a financial point of view. In its presentation to the Bancorp
Board of Directors, Baxter Fentriss noted that the Tender Offer price of
$21.00 per share (i) is approximately 1.4 times the average bid price for the
Common Stock of $15.00 per share during December 1994, and (ii) represents 1.04
times the book value per share of $20.23 at December 31, 1994. The Board of
Directors also took into account that the efforts of Baxter Fentriss to
identify potential purchasers of Bancorp (in the course of which Baxter
Fentriss contacted over 20 banking institutions) did not produce a prospective
buyer that was willing to propose a transaction that would have provided value
to the holders of the Minority Shares that was superior to the Tender Offer.
ITEM 5 PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
Pursuant to an engagement letter, dated May 31, 1994, Bancorp
retained Baxter Fentriss to render financial advisory services with respect to
the disposition of the Citibank Shares, including the Tender Offer. In
accordance with the engagement letter, Bancorp has paid to Baxter Fentriss an
initial advisory fee of $7,500, and Baxter Fentriss is entitled to receive a
transaction fee of $43,146 as a result of the closing of sale of the Pledged
Shares. In addition, Baxter Fentriss will be entitled to receive an additional
transaction fee based on the number of shares sold pursuant to the Tender
Offer, in an amount up to an additional $21,474, if all of the Minority Shares
are sold to Mr. Reynolds.
Bancorp also has agreed to reimburse Baxter Fentriss for its
out-of-pocket expenses as incurred, which through June 30, 1995, have totalled
$12,451, and to indemnify Baxter Fentriss and certain related persons against
certain liabilities in connection with its engagement, including certain
liabilities under the federal securities laws.
Except as set forth above, neither Bancorp nor any person
acting on its behalf has employed, retained or compensated any person to make
solicitations or recommendations to the stockholders of Bancorp with respect to
the Tender Offer.
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ITEM 6 RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) There have been no transactions in shares of Common Stock
effected by Bancorp or, to the best knowledge of Bancorp, by an executive
officer, director, affiliate or subsidiary of Bancorp, during the 60 days prior
to the date of this Statement, except for the purchase by Mr. Reynolds and his
assignees of the Pledged Shares.
(b) To the best of Bancorp's knowledge, and subject to applicable
tax and other personal considerations, each of Bancorp's directors and
executive officers (except for Mr. Naing as to whose plans Bancorp has no
knowledge) does not intend to tender any shares of Common Stock that he or she
currently holds of record or beneficially pursuant to the Tender Offer.
ITEM 7 CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) Bancorp is not engaged in any negotiations in response to the
Tender Offer which relate to or would result in (i) an extraordinary
transaction such as a merger or reorganization involving Bancorp or any
subsidiary of Bancorp, (ii) a purchase, sale or transfer of a material amount
of assets by Bancorp or a subsidiary of Bancorp, (iii) a tender offer for or
other acquisition of securities by or of Bancorp, or (iv) a material change in
the present capitalization or dividend policy of Bancorp.
(b) There are no resolutions of the Bancorp Board of Directors,
agreements in principle or signed contracts in response to the Tender Offer
that relate to or would result in one or more of the matters referred to in
Item 7(a) above.
ITEM 8 ADDITIONAL INFORMATION TO BE FURNISHED
None.
ITEM 9 MATERIAL TO BE FILED AS EXHIBITS
The following exhibits are filed herewith:
Exhibit 99.1 -- Letter to Shareholders of Bancorp*
Exhibit 99.2 -- Opinion of Baxter Fentriss and Company, dated
July 21, 1995.*
SIGNATURE
After reasonable inquiry and to the best of my knowledge, I
certify that the information set forth in this Statement is true, correct and
complete.
<TABLE>
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ABIGAIL ADAMS NATIONAL BANCORP, INC.
By: /s/ Barbara Davis Blum
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Name: Barbara Davis Blum
Title: President and Chief Executive Officer
</TABLE>
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* Included in copies mailed to shareholders.
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Exhibit 99.1
August 16, 1995
Dear Shareholders of Abigail Adams National Bancorp:
I am pleased to inform you of the resolution of the ownership
status of Abigail Adams National Bancorp, Inc. ("Bancorp"). On July 21, 1995,
a group of predominantly female investors purchased from Citibank N.A.
approximately 71% of the outstanding shares of Bancorp's common stock.
In a separate agreement with Bancorp, one of the investors,
Marshall Reynolds, has agreed to make a tender offer to purchase any or all of
the remaining 29% of the outstanding shares of Bancorp common stock (the
"Minority Shares") at a purchase price of $21.00 per share, as more fully
described in an Offer to Purchase, dated August 16, 1995, which is enclosed
herewith. Participation in the tender offer is entirely up to you. If you
wish to retain your shares, you are not required to take any action. Those of
you who wish to accept the offer may do so by following the procedures set
forth in the Offer to Purchase and the accompanying documentation.
THE BOARD OF DIRECTORS OF BANCORP HAS DETERMINED THAT THE
TENDER OFFER IS FAIR TO SHAREHOLDERS TO WHOM IT IS BEING MADE. HOWEVER, THE
BOARD OF DIRECTORS IS MAKING NO RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD
TENDER YOUR SHARES OF BANCORP COMMON STOCK PURSUANT TO THE TENDER OFFER.
In arriving at its conclusion regarding the fairness of the
tender offer, the Bancorp Board of Directors considered the factors described
in the accompanying Schedule 14D-9, including the opinion of Bancorp's
financial advisor, Baxter Fentriss and Company, that the tender offer price is
fair, from a financial point of view, to the holders of the Minority Shares.
In closing, let me say that the Board of Directors is
extremely pleased that, notwithstanding the ownership change, Bancorp has been
able to preserve its woman-owned status. Both the Board of Directors and
management are very excited about the prospects of The Adams National Bank now
that the distractions of the last six years have been removed.
Barbara Davis Blum
Chairwoman
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Exhibit 99.2
BAXTER FENTRISS AND COMPANY
MAIN OFFICE: REGIONAL OFFICE:
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9100 Arboretum Parkway 4117 N. Roxboro Rd.
Suite 280 Suite 130
Richmond, VA 23236 Durham, NC 27704
(804) 323-7540 (919) 471-0340
Fax (804) 323-7457 Fax (919) 471-0534
July 21, 1995
The Board of Directors
Abigail Adams National Bancorp, Inc.
1627 K St NW
Washington, DC 20006-1704
Dear Members of the Board:
Abigail Adams National Bancorp, Inc., Washington, DC ("Bancorp") and Marshal T.
Reynolds ("Purchaser") have entered into an Agreement providing for the
acquisition of Bancorp shares by Purchaser ("Acquisition"). The terms of the
Acquisition are set forth in the Agreement dated April 20, 1995.
The terms of the Acquisition provide that each minority common share of Bancorp
will be converted into $21 cash.
You have asked our opinion as to whether the proposed transaction pursuant to
the terms of the Acquisition are fair to the respective minority shareholders
of Bancorp from a financial point of view.
In rendering our opinion, we have evaluated the consolidated financial
statements of Bancorp available to us from published sources. In addition, we
have, among other things: (a) to the extent deemed relevant, analyzed selected
public information of certain other financial institutions and compared Bancorp
from a financial point of view to the other financial institutions; (b)
considered the historical market price of the common stock of Bancorp; (c)
compared the terms of the Acquisition with the terms of certain other
comparable transactions to the extent information concerning such acquisitions
was publicly available; (d) reviewed the Agreement and Plan of Reorganization
and related documents; and (e) made such other analyses and examinations as we
deemed necessary. We also met with Purchaser and various senior officers of
Bancorp to discuss the foregoing as well as other matters that may be relevant.
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We have not independently verified the financial and other information
concerning Bancorp, Purchaser, or other data which we have considered in our
review. We have assumed the accuracy and completeness of all such information;
however, we have no reason to believe that such information is not accurate and
complete. Our conclusion is rendered on the basis of securities market
conditions prevailing as of the date hereof and on the conditions and
prospects, financial and otherwise, of Bancorp and Purchaser as they exist and
are known to us as of December 31, 1994.
We have acted as financial advisor to Bancorp in connection with the
Acquisition and will receive from Bancorp a fee for our services, a significant
portion of which is contingent upon the consummation of the Acquisition.
It is understood that this opinion may be included in its entirety in any
communication by Bancorp or the Board of Directors to the stockholders of
Bancorp. The opinion may not, however, be summarized, excerpted from or
otherwise publicly referred to without our prior written consent.
Based on the foregoing, and subject to the limitations described above, we are
of the opinion that the terms of the Acquisition are fair to the minority
shareholders of Bancorp from a financial point of view.
Very truly yours,
/s/ Baxter Fentriss and Company
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Baxter Fentriss and Company
