November 25, 1997
Dear Fellow Stockholder,
By now you should have received a proxy statement detailing Abigail
Adams National Bancorp's proposed acquisition of Ballston Bancorp (parent
company of the Bank of Northern Virginia). Under the proposed transaction, Adams
will pay 1.8 times Ballston's book value as of March 31, 1997 plus one times
earnings subsequent to that date. This is one of the most attractively priced
deals for a Virginia bank over the last two years. The price will be paid in
equal parts of cash and stock. Your management and the board of directors
believe this acquisition is both strategically and financially compelling for
the following reasons.
Financial Value
---------------
The transaction:
o Is fairly priced.
- Financial advisors for Adams and Ballston have concluded the
consideration to be paid in the transaction is fair to shareholders
from a financial point of view.
o Should have a positive financial impact.
- Management estimates annual direct cost savings of approximately
$750,000 before taxes, or $500,000 after taxes, the majority of which
will be realized beginning in the first half of 1998. This is a rate
sufficient to offset the 15 year write-off of goodwill resulting from
the transaction.
o Should add to book value.
o Should add to earnings per share beginning in 1998.
o Will result in the addition of approximately $72 million in assets in
the Greater Washington market.
o Will result in a combined bank with assets of approximately $200
million with a nearly doubled legal lending limit.
Strategic Value
---------------
The acquisition will:
o Establish Adams' presence in the high growth Northern Virginia market
and complement Adams' existing branch network.
o Improve Adams' market share and expand Adams' shareholder base in its
strategic market of the Greater Washington area.
o Make Adams more attractive to strategic buyers.
YOUR BOARD OF DIRECTORS URGES YOU TO APPROVE THIS TRANSACTION. IF YOU HAVE NOT
VOTED YOUR PROXY CARD, WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED ENVELOPE. YOUR VOTE IS IMPORTANT.
Sincerely,
Barbara Davis Blum
Chairwoman of the Board,
President & Chief Executive Officer