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</TABLE>
COMMUNITY BANCSHARES, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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April 9, 1999
For information contact:
Brenda Carr, 205-429-1001, ext. 207
For immediate release
Blountsville, Alabama--"Some allegations have been made recently about the
management of Community Bancshares. Let's get down to the facts and put them in
plain English," says Kennon R. Patterson, Sr., Community Bancshares chairman,
chief executive officer and president. "Community Bancshares is a strong,
growing company and shareholders, employees, and customers have my word on
that."
Over the past 12 months, Community Bancshares stockholders saw a 64% total
return on their investment. The value of their stock has more than doubled since
February 1996. It rose from $9 per share in 1996 to $20 per share by the end of
1998. These numbers reflect the effect of a two-for-one stock split in March
1998.
"I'm saddened by the allegations that are currently being spread by a small
group of 10 disgruntled shareholders," Patterson continues, "But I do not
believe that our shareholders, numbering about 2,200 in all, will buy into this
campaign. I am confident that our shareholders, many of whom are also our
depositors and customers, will consider the source of the attack."
These are the facts:
- In just 16 years, a $38 million Blountsville bank has grown to
a $603 million holding company, employing 431 people. In Blount
County, 178 workers are employed by Community Bank, Community
Insurance, Community Appraisals, 1st Community Credit Corporation,
and Community Bancshares.
- Community Bancshares is listed by the Federal Reserve Bank -
Atlanta as the eighth largest holding company in Alabama. The
company now has 30 banking offices in 24 communities, having
opened Community Bank Demopolis on March 15, 1999. In addition,
the finance company, 1st Community Credit Corporation, has 12
offices, and Community Insurance has three offices, plus a
wholesale insurance subsidiary that serves about 140 independent
insurance agencies in Alabama.
- Since 1994, the assets, deposits and loans have doubled. In 1998
alone, Community Bancshares' assets grew 22.7%, total deposits
grew 22.2% and loans grew 33%, compared to 12.9% growth in assets,
11.3% growth in total deposits and 11.5% growth in loans for banks
of similar size around the country.
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The disgruntled shareholders include two former directors, R.C. and Bryan Corr.
The group claims that a significant number of the directors of Community
Bancshares are management "insiders." That's a disservice to those directors and
the shareholders who elected them by an overwhelming majority of the shares
voted.
Six of the 11 members of the Community Bancshares Board are non-employee
directors and self-made men who exercised sound judgment in building their own
businesses or careers. "Anyone who knows these gentlemen knows they are not
rubber stamps for anyone," Patterson says.
Those board members are Glynn Debter, owner-operator of Debter Farms at Horton;
R. B. Jackson, former owner of Jackson Farm and Garden Center, Minor Hill, TN;
John J. Lewis, Jr., production planning manager, Tyson Foods., Inc.,
Blountsville; Merritt Robbins, Piggly Wiggly operator and property developer of
New Hope; Robert O. Summerford, owner-operator Summerford Nursing Home,
Falkville; R. Wayne Washam, retired Assistant Superintendent of Education, Arab
City Schools, Arab.
Five Board members are part of the Company management team: Kennon R. Patterson,
Sr., president, CEO, and chairman; Denny Kelly, president, Community Bank;
Bishop K. Walker, Jr., vice chairman and general counsel; Loy McGruder, area
executive vice president of Community Bank; and Hodge Patterson, III, area
executive vice president of Community Bank.
In a letter to shareholders, the disgruntled shareholders charged that Community
Bank's return on assets or ROA, a method of measuring profitability, is "a full
1.25% below the industry average of approximately 2.0%."
"The truth" Patterson says," is that SNL Securities, an independent national
reporting firm on banks, shows that the average ROA for bank holding companies
in the $500 to $1 billion range was 1.16. The Community Bancshares ROA was .67
and the Community Bank ROA is .93 for 1998. Those numbers are the result of our
bank's investment in the communities we serve. The company added five finance
companies, bought two insurance companies, and finished acquisition of Southern
Select, an insurance wholesale company. In addition to those expenses, the
opening of new banking offices in Albertville, Boaz, Guntersville, and in the
Hartselle Wal-Mart, acquiring the assets of a bank in Uniontown, and start-up
expenses for Community Bank Demopolis all affected the ROA for 1998.
"I'm frankly mystified that one of the disgruntled shareholders, Bryan Corr, who
sat on the Community Bank Board and seconded the motion for the 1998 expansion
plan in a meeting held December 9, 1997, now chooses to be a leader of a group
that criticizes what has been a very successful formula for growth."
In a March 31 article, The Blount Countian stated that Bryan Corr resigned from
the Community Bancshares Board in January 1999, over disagreement with
management practices. Bryan Corr resigned only after he was dismissed in
November 1998 from the Community Bank Board, the Community Insurance Board and
the Board committees on which he served. He
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was also asked by board members to resign from the Community Bancshares Board at
that time.
"We hope we are setting the record straight for our shareholders and the
customers we serve," Patterson said. "We believe people should earn the right to
lead a bank through years of service rather than just buying their way in
through a transparent power grab.
"Let's get to the bottom line. Community Bancshares is a partnership of
management, the board, and shareholders. I invite any shareholder who would like
to talk with me about this matter to call 205-429-1000."
This space paid for by Community Bancshares, Inc.
CERTAIN ADDITIONAL INFORMATION REQUIRED BY THE SECURITIES AND EXCHANGE
COMMISSION: Community Bancshares, Inc. (the "Company") will be soliciting
proxies for the upcoming Annual Meeting of Stockholders of the Company to vote
for election of the Board of Directors' nominees to serve as directors of the
Company and for approval of the Company's proposals. Such proxies will be voted
against proposals that may be presented at the Annual Meeting by certain members
of the so-called Stockholders for Integrity and Responsibility. The following
individuals, each of whom is a member of the Board of Directors of the Company,
may be deemed to be participants in the solicitation of such proxies and, as of
March 1, 1999, beneficially owned the number of shares of the Company's common
stock indicated: Glynn Debter, 37,067 shares; Roy B. Jackson, 5,000 shares;
Denny G. Kelly, 370,000 shares; John J. Lewis, Jr., 43,667 shares; Loy McGruder,
58,022 shares; Hodge Patterson, III, 80,077 shares; Kennon R. Patterson, Sr.,
863,456 shares; Merritt M. Robbins, 184,908 shares; Robert O. Summerford,
116,867 shares; Bishop K. Walker, Jr., 569,479 shares; and R. Wayne Washam,
39,069 shares.
