FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 1, 1998
ANCHOR FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 0-13759 57-0778015
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification number)
2002 Oak St., Myrtle Beach, S. C. 29577
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (843) 448-1411
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ITEM 5. OTHER EVENTS
On May 1, 1998, Anchor Financial Corporation (the "Corporation") and M&M
Financial Corporation ("M&M Financial"), parent company of First National South,
a national bank headquartered in Marion, South Carolina, announced the signing
of a letter of intent to merge.
The proposed merger is subject to due diligence, execution of a definitive
agreement by May 15, 1998, and approval of such agreement by the boards of
directors and shareholders of both companies and approval by appropriate
regulatory agencies. The proposed merger is expected to be completed in the
third quarter of 1998. For information regarding the terms of the proposed
transaction, reference is made to the letter of intent to merge and the news
release, dated May 1, 1998, attached to this Report as Exhibits 2 and 99,
respectively.
The proposed merger is expected to be accounted for as a pooling of interests
and provides for a tax-free exchange of 0.87 shares of Anchor Financial
Corporation common stock for each outstanding share of M&M Financial common
stock. Based on the Corporation's April 28th closing stock price of $40.50 and
M&M Financial's approximately 1.0 million outstanding shares of common stock,
the proposed transaction would have a value of approximately $35.24 per share,
or a total purchase price of $35.5 million.
After consummation of the proposed merger, M&M Financial's First National South
banking offices, with locations in Florence, Marion, Mullins, Nichols, and
Myrtle Beach, South Carolina, will become part of the Corporation's banking
network. The Corporation does not anticipate significant changes in M&M
Financial's current banking routine.
Based on March 31, 1998 figures, the Corporation will have more than $1 billion
in total assets and its banking network will expand to 28 offices in South
Carolina and North Carolina after this proposed merger and the pending proposed
merger of ComSouth Bankshares, Inc. with and into the Corporation (as previously
reported on the Corporation's filing on Form 8-K, dated April 14, 1998) are
completed.
Anchor Financial Corporation, with assets of $624.7 million at March 31, 1998,
is the parent of The Anchor Bank, which offers a full line of banking products
and services. On April 14, 1998, Anchor Financial Corporation announced that it
executed a definitive Agreement and Plan of Merger with ComSouth Bankshares,
Inc., ("ComSouth"), parent of the Bank of Charleston, Charleston, South Carolina
and the Bank of Columbia, Columbia, South Carolina and expects that merger to be
completed during the third quarter of 1998. ComSouth had assets of $217 million
at March 31, 1998.
M&M Financial, with assets of $170 million at March 31, 1998, is the parent of
First National South which offers a full line of banking products and services.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements - not applicable.
(b) Pro forma financial information - not applicable.
(c) Exhibits:
(2) Letter of Intent to Merge, dated April 30, 1998
(99) News release issued by Anchor Financial Corporation,
dated May 1, 1998
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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 thereunto duly authorized.
/s/ John J. Moran
John J. Moran, Senior Vice President
and Comptroller
Date: May 4, 1998
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EXHIBIT 2
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(Anchor Financial Corporation
logo appears here)
April 30, 1998
Board of Directors
M&M Financial Corp.
307 North Main Street
Marion, SC 29571
Ladies and Gentlemen:
The purpose of this letter of intent is to confirm our mutual present intentions
with respect to our proposed business combination. We believe that this proposal
offers substantial advantages to M&M Financial Corp. and its shareholders,
customers and employees. We look forward to working with your directors and
officers to consummate a transaction as soon as possible.
The terms, conditions and understandings of this proposal include:
1. The transaction shall be structured as an exchange of shares of Anchor
Financial Corporation ("Anchor") for 100% of the outstanding common
stock of M&M Financial Corp. ("M&M"). M&M currently has 1,006,116
shares of common stock outstanding and options to purchase 66,000
shares of common stock at various prices per share. The exchange of
shares shall be on the basis of .87 shares of Anchor's common stock to
be exchanged for each share of M&M's common stock. Anchor understands
that upon execution of this letter that the Board of Directors of M&M
is prepared (subject to their approval of a definitive agreement to be
negotiated) to recommend to its stockholders this proposed exchange
transaction.
2. Upon the consummation of the exchange transaction, Anchor anticipates
that the subsidiary bank of M&M will be merged with and into The Anchor
Bank. Anchor intends for the banking operations of M&M to continue to
serve their current markets with adequate operating authority.
3. Anchor will use its best efforts to provide to employees of M&M and its
subsidiary bank, employee benefits the value of which is comparable to
those employee benefits presently received by such employees.
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Board of Directors of M&M Financial Corp.
Page 2
April 30, 1998
4. This proposed transaction is subject to the following usual conditions:
a. There shall have been no material adverse change in the
financial condition or results of operation of M&M as
reflected in M&M's most recent audited financial statements,
including, but not limited to, the adequacy of the allowance
for loan losses.
b. All required approvals by appropriate state and federal
regulatory authorities shall have been obtained without the
imposition of conditions with which Anchor cannot reasonably
comply.
c. M&M's shareholders shall exchange 100% of the outstanding
common stock of M&M for Anchor's common shares, and Anchor's
independent accountants shall render a favorable opinion that
the transaction will be accounted for as a pooling of
interests.
d. A definitive agreement shall be negotiated on or before May
15, 1998, which shall provide for the exchange transaction and
contain such terms, agreements, representations, warranties
and conditions as shall be consistent herewith and otherwise
in form and substance satisfactory to each party.
e. The definitive agreement shall provide that if the exchange
transaction is terminated under certain circumstances, M&M
shall pay Anchor a termination fee of $1.5 million.
5. The obligation of Anchor to consummate the proposed exchange
transaction is subject to a thorough due diligence examination of the
books, records, properties and facilities of M&M and its subsidiaries.
Promptly following the execution of this letter of intent, M&M shall
(except as may be prohibited by applicable law) permit Anchor, its
officers, employees, agents and representatives access, on reasonable
notice and during customary business hours to all the books, records,
properties and facilities of M&M and its subsidiaries and, in this
connection, shall use its best efforts to cause the officers,
employees, accountants and attorneys of M&M to cooperate with any of
Anchor's reasonable requests for information. M&M and Anchor shall
keep, or cause to be kept, confidential all information so received
(other than such information as is publicly available) and shall use
such information, or cause it to be used, solely for the purpose of
evaluating M&M in connection with the proposed exchange transaction;
provided, M&M and Anchor may disclose any such information to the
extent required by federal or state securities laws or otherwise
required by any governmental agency or authority in the United States.
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Board of Directors of M&M Financial Corp.
Page 3
April 30, 1998
6. From the date hereof, subject only to their fiduciary duty to act in
the best interests of shareholders of M&M, the officers and directors
of M&M shall not make any inquiries or proposals with respect to, or
furnish information relating to, or participate in any negotiations or
discussions concerning any direct or indirect acquisition or purchase
of shares of M&M other than as contemplated by this letter of intent.
7. Each party will bear its own expenses in connection with the exchange
transaction.
8. Anything herein to the contrary notwithstanding, if the definitive
agreement has not been entered into by May 15, 1998, then any party
hereto may terminate the proposed exchange transaction upon notice to
the other. Each party agrees to use its best efforts to enter into the
definitive agreement by May 15, 1998.
9. Neither party shall disclose the terms of this letter except pursuant
to a press release that is mutually agreed to as to content and timing
of release.
If you find the above terms satisfactory, please sign a copy of this letter and
deliver it to the President of Anchor no later than May 1, 1998, as evidence
that this letter accurately reflects our mutual present intents. Except as to
the provisions set forth in paragraphs 6, 7 and 8 above, this instrument is not
intended to create any contractual obligations on the part of the parties
hereto.
Sincerely,
ANCHOR FINANCIAL CORPORATION
By: /s/ Stephen L. Chryst
Stephen L. Chryst, President
Agreed:
M&M FINANCIAL CORP.
By: /s/ Chester A. Duke
Chester A. Duke, President
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EXHIBIT 99
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ANCHOR FINANCIAL CORPORATION 2002 OAK STREET, MYRTLE BEACH, SC 29577
(803) 448-1411
(Anchor News Release logo appears here)
Anchor Financial Corporation and M&M Financial Corporation
Announce Intent to Merge
Myrtle Beach, SC, May 1, 1998 - Anchor Financial Corporation and M&M Financial
Corporation, parent company of First National South and headquartered in Marion,
South Carolina, today announced the signing of a letter of intent to merge.
The proposed merger is subject to due diligence, execution of a definitive
agreement by May 15, 1998, and approval of such agreement by the boards of
directors and shareholders of both companies and approval by appropriate
regulatory agencies. The transaction is expected to be completed in the third
quarter of 1998.
Upon completion, M&M Financial's First National South banking offices, with
locations in Florence, Marion, Mullins, Nichols, and Myrtle Beach, South
Carolina, will become part of Anchor's banking network. The result of this
combination will bring Anchor Financial Corporation's asset size to more than $1
billion and expand its banking network to 28 offices in South Carolina and North
Carolina.
The proposed transaction is expected to be accounted for as a pooling of
interests and provides for a tax-free exchange of 0.87 shares of Anchor
Financial Corporation common stock for each outstanding share of M&M Financial
common stock. Based on Anchor Financial Corporation's April 28th closing stock
price of $40.50 and M&M Financial's approximately 1.0 million outstanding shares
of common stock, the transaction would have a value of approximately $35.24 per
share, or a total purchase price of $35.5 million. The merger is expected to
have a positive impact on Anchor's earnings beginning in 1999.
Stephen L. Chryst, president and chief executive officer of Anchor Financial
Corporation, stated, "The partnership with M&M Financial adds strength to our
growing franchise. Their offices in the Pee Dee area complement our upcoming
move into the Columbia market, and their style of community banking blends well
with ours. They bring a shared commitment to superior customer service and
technologically advanced products."
(M O R E)
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Anchor Financial Corporation Announces Intent to Merge P. 2
Chester A. Duke, chairman, president, and chief executive officer of M&M
Financial, said, "The affiliation with Anchor Financial Corporation is the right
move for us. It will allow us to provide our customers with a wider variety of
products and services, and we look forward to the partnership that is being
created."
Customers of both banks will continue to be served by the same employees who
have helped them in the past and will not need to make any changes in their
banking routine. After the merger is completed, customers of both institutions
will be able to do their banking at any of The Anchor Bank offices in North
Carolina and South Carolina. Customers will also have access to investment and
trust services, as well as an array of electronic products.
Anchor Financial Corporation recently announced a merger agreement with ComSouth
Bankshares, Inc., parent of the Bank of Charleston and the Bank of Columbia, and
expects that merger to be completed during the third quarter of 1998. Arthur M.
Swanson, president and chief executive officer of ComSouth and chairman of the
board of the Bank of Charleston, said, "I am pleased with the merger
announcement of Anchor Financial and M&M Financial. It will be a prosperous
relationship and one that I am glad to be associated with. The banking franchise
being created will have tremendous value for customers and shareholders."
Anchor Financial Corporation, with assets of $624.7 million, is the parent of
The Anchor Bank, which operates nineteen banking offices in South Carolina and
North Carolina. The Anchor Bank offers a full line of banking products and
services.
Anchor Financial Corporation's common stock trades on the Nasdaq Stock MarketSM
under the symbol AFSC.
M&M Financial Corporation has assets of $170 million and is the parent of First
National South which offers a full line of banking products and services.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Statements in this news release looking forward in time involve risks and
uncertainties, including regulatory approvals, completion of the due diligence
process, success of acquiring new locations and integrating newly-acquired
branches, additional expansion opportunities, the effect of changing economic
conditions, product demand, changes in the regulatory environment, and other
risk factors detailed in Anchor's Securities and Exchange Commission filings.
Note: Transmitted on Business Wire at 8:45 A.M. EST, May 1, 1998.
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