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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Earliest Event Reported -- July 1, 1994
FARMERS NATIONAL BANCORP
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(Exact name of registrant as specified in its charter)
Maryland 2-76280 52-1241460
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5 Church Circle Annapolis, Maryland 21401
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(Address of principal executive offices) (Zip Code)
(410) 263-2603
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or address, if changed since last report)
The exhibit index as required by item 601(a) of Regulation S-K is included on
page 4 of this report.
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Item 5. OTHER EVENTS
On July 1, 1994, Farmers National Bancorp announced that it had entered
into an Agreement and Plan of Reorganization with First Virginia Banks, Inc.
pursuant to which First Virginia Banks, Inc. will acquire Farmers by means of a
merger in which Farmers stockholders will receive 1.5 shares of First Virginia's
common stock in exchange for each share of Farmers stock, provided that, at the
election of the holders, up to 30% of all outstanding Farmers shares may be
exchanged for cash at $58.53 per share. If First Virginia is advised by its
independent accountants that it cannot otherwise qualify to treat the merger as
a purchase for accounting purposes, then in addition to those Farmers shares as
to which stockholders elect to receive cash or exercise dissenters' rights under
Maryland law to receive the appraised value of their shares in cash, an
additional number of Farmers shares shall be exchanged on a pro rata basis for
cash at $58.53 per share so that the aggregate number of (i) those shares
exchanged for cash and (ii) those shares as to which dissenters' rights are
exercised is equal to at least 10.1% of all outstanding shares of Farmers stock.
Attached to this Current Report on Form 8-K as Exhibit 1 is a copy of Farmers'
press release dated July 1, 1994.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description of Exhibit
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1 Press Release dated July 1, 1994.
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FARMERS NATIONAL BANCORP
S I G N A T U R E
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 thereunto duly authorized.
FARMERS NATIONAL BANCORP
By /s/ JOHN M. SUIT, II
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John M. Suit, II
President and Chief Executive
Officer
Date: July 7, 1994
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EXHIBIT INDEX
Exhibit No. Description of Exhibit Page
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1 Press Release dated July 1, 1994. 5
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EXHIBIT 1
FOR IMMEDIATE RELEASE Contact: Richard F. Bowman
(703) 241-3685 (Falls Church)
July 1, 1994 OR
John M. Suit, II
(410) 626-2201 (Annapolis)
FARMERS NATIONAL BANCORP TO MERGE WITH FIRST VIRGINIA BANKS, INC.
The directors of Farmers National Bancorp, a $709 million multi-bank holding
company headquartered in Annapolis, Maryland have agreed to affiliate with First
Virginia Banks, Inc., a $7.2 billion multi-bank holding company headquartered in
Fairfax, Virginia. The announcement was made jointly today by Charles L.
Schelberg, Chairman of the Board, and John M. Suit, II, President and Chief
Executive Officer, of Farmers National, and Robert H. Zalokar, Chairman and
Chief Executive Officer of First Virginia. Farmers National Bancorp operates
three banks: the 15 office, $627 million Farmers National Bank of Maryland which
possesses the leading market share in the Annapolis area; the four office, $54
million Atlantic National Bank which operates in the Ocean City and Salisbury
areas; and the one office, $29 million Caroline County Bank which operates in
Greensboro, Maryland.
Shareholders of Farmers National Bancorp will receive 1.5 shares of First
Virginia common stock for each of their 2,699,056 outstanding shares. Up to 30%
of the outstanding shares may be exchanged for $58.53 in cash at the option of
Farmers' shareholders. Based on the most recent closing price of First Virginia,
the value per share of Farmers National is approximately $56.28 and aggregates
$151.9 million. The price is approximately 2.03 times the estimated book value
of Farmers National at the time of the merger in late 1994 and is 16.2 times
Farmers' estimated earnings per share.
First Virginia will issue up to 4,048,584 shares to Farmers National
shareholders depending on the percentage of shareholders electing cash. For
those shareholders electing to receive First Virginia stock the exchange will be
tax-free. In connection with this merger, First Virginia will repurchase up to
2,700,000 of its shares and will treat the transaction as a purchase. The
combined organization will have a Tier I capital ratio of approximately 14.7%, a
total capital ratio of 16.0% and a leverage ratio of 8.5%, which are among the
highest of all banks in the country.
For the year ended December 31, 1993, Farmers National produced a return on
assets of 1.4% and a return on equity of 14.2%. First Virginia expects a
combination of growth, additional product offerings and cost savings to absorb
the initial dilution of 1.5% within two years, after which there will be a
positive addition to earnings per share.
Messrs. Suit and Zalokar stated that a definitive agreement had been entered
into and that the transaction is subject to completion of a due diligence review
and to approval by Farmers National Bancorp shareholders as well as
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state and federal regulatory authorities. Following the merger, which will occur
as early as the fourth quarter of 1994, Farmers National Bank of Maryland will
continue to operate as a separate member bank within the First Virginia Group
under the name of Farmers Bank of Maryland. John M. Suit, II, President and
Chief Executive Officer of the bank, will continue in that capacity with
Farmers.
Mr. Suit commented that the affiliation with the oldest major bank holding
company in Virginia would enable Farmers National to improve the already
excellent service provided to its customers by taking advantage of the greater
resources of First Virginia in serving the needs of its customers in the
Maryland market.
Mr. Zalokar commented that the affiliation with Farmers National represented an
entry into several of the most attractive markets in the region. In addition to
containing some of the highest income and growth characteristics in the nation,
Mr. Zalokar noted that the markets served by Farmers National logically
complemented and significantly improved the First Virginia presence in Maryland.
First Virginia's return on assets and capital ratios have made it the most
profitable and best capitalized major banking company in Virginia for the last
decade. First Virginia common stock is traded on the New York and Philadelphia
Stock Exchanges. There are currently 20 member banks within the group: 14 banks
in Virginia with 269 offices; two banks with 37 offices in the Maryland suburbs
of Baltimore and Washington; and four banks with 23 offices in east Tennessee.
On June 17, 1994, FNB Financial Corporation in Knoxville, Tennessee affiliated
with First Virginia. First Virginia and its lead bank also have mortgage and
insurance subsidiaries with offices in seven states from New Jersey to North
Carolina.
