Exhibit 8.1
[WILLIAMS, MULLEN, CLARK & DOBBINS LETTERHEAD]
June __, 2000
Board of Directors Board of Directors
Southern Financial Bancorp, Inc. First Savings Bank of Virginia
37 East Main Street 6551 Loisdale Court, Suite 900
Warrenton, Virginia 20186 Springfield, Virginia 22150
Re: Tax Opinion -- Merger of First Savings Bank of
Virginia with and into Southern Financial Bank, a
Wholly-Owned Subsidiary of Southern Financial Bancorp, Inc.
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax
consequences of the proposed merger (the "Merger") of First Savings Bank of
Virginia ("FSBV") with and into Southern Financial Bank ("Surviving Bank"), a
wholly-owned subsidiary of Southern Financial Bancorp, Inc. ("SFB"), pursuant to
the Agreement and Plan of Reorganization, made and entered into as of March 31,
2000, between these parties (the "Agreement"). Our opinion is given pursuant to
Section 6.1(d) of the Agreement.
FACTS:
FSBV is a corporation and a Virginia savings association organized
under Virginia law. FSBV's principal executive offices are located at 6551
Loisdale Court, Suite 900, Springfield, Virginia 22150.
SFB is a Virginia corporation and registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Surviving Bank, a wholly-owned
subsidiary of SFB, is a corporation and state bank organized under Virginia law.
SFB's principal executive office is located at 37 East Main Street, Warrenton,
Virginia 20186.
Pursuant to the Agreement, FSBV will be merged with and into Surviving
Bank in accordance with the provisions of Title 13.1 of the Code of Virginia of
1950, as amended. Each outstanding share of FSBV common stock will automatically
become and be converted into 0.44 shares of SFB common stock. Cash will be paid
in lieu of fractional shares. After the Merger,
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Surviving Bank will continue its existing business and operations as a
wholly-owned subsidiary of SFB.
In connection with this opinion, we have reviewed (i) the Agreement,
(ii) SFB's Registration Statement on Form S-4, dated June 16, 2000, including
the Proxy Statement/Prospectus contained therein, and (iii) such other documents
concerning the Merger as we have deemed necessary ((i), (ii), and (iii)
collectively, the "Merger Documents"). With respect to the various factual
matters material to our opinions, we have relied upon certificates of certain
officers of and FSBV and SFB (the "Officers' Certificates"). We have assumed the
correctness of the factual matters contained in such reliance sources and have
made no independent investigation for the purpose of confirming that such
factual matters are correct. As to all matters in which a person or entity has
represented that such person or entity either is not a party to, does not have,
or is not aware of, any plan or intention, understanding or agreement, we have
assumed that there is in fact no plan, intention, understanding or agreement. We
have also assumed that the Merger will be consummated in accordance with the
Agreement.
We have assumed (i) the genuineness of all signatures on the Merger
Documents, (ii) the due authorization, execution and delivery of all documents
and the validity and binding effect thereof, (iii) the authenticity of all
documents submitted to us as originals, (iv) the conformity to the originals of
all documents submitted to us as copies and the authenticity of the originals
from which the copies were made and (v) the legal capacity of natural persons.
OPINION:
Based on the foregoing and subject to the limitations and
qualifications set forth herein, we give our opinion as follows:
1. The Merger will qualify as a reorganization within the meaning
of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code (the
"Code") and FSBV and SFB will each qualify as a "party to a reorganization"
within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized for federal tax purposes by
FSBV or SFB as a result of the Merger.
3. No gain or loss will be recognized for federal tax purposes by
the shareholders of FSBV as a result of the exchange of their FSBV common stock
solely for the common stock of SFB.
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4. Any shareholder of FSBV who receives cash in lieu of a
fractional share interest shall be treated as receiving a payment in redemption
of such fractional interest subject to the provisions of Section 302 of the
Code. Gain or loss will be realized and recognized with respect to such
shareholder and shall be measured by the difference between the redemption price
and the portion of the shareholder's basis in FSBV stock allocable to such
fractional share interest.
5. The aggregate tax basis of the shares of SFB stock received by
each shareholder of FSBV will be equal to the aggregate tax basis of such
shareholder's shares of FSBV stock surrendered therefor in the Merger.
6. The holding period under Section 1223 of the Code for the
shares of SFB stock received by each shareholder of FSBV will include the
holding period for the shares of FSBV stock of such shareholder surrendered
therefor in the Merger, provided that the FSBV shareholder held such stock as a
capital asset on the date of the Merger.
In rendering our opinion, we have considered the applicable provisions
of the Code, Treasury Regulations promulgated thereunder, pertinent judicial
authorities, interpretive rulings of the Internal Revenue Service and other
authorities as we have considered relevant. Our opinion is limited to the
federal tax law of the United States of America and is expressed as of the date
hereof. We do not assume any obligation to update or supplement our opinion to
reflect any fact or circumstance which hereafter comes to our attention or any
change in law which hereafter occurs. Our opinions are limited to the matters
expressly stated. No opinion is implied or may be inferred beyond such matters.
Our opinion expressed herein is made in connection with the Merger and
is solely for the benefit of FSBV, SFB and SFB's shareholders. We hereby consent
to the filing of this opinion as an exhibit to the Registration Statement, which
has been filed by SFB with the Securities and Exchange Commission, and to the
reference to our firm under the caption "Certain Federal Income Tax
Consequences" in the Prospectus and Proxy Statement forming a part of the
Registration Statement. This opinion may not, without our prior written consent,
be otherwise distributed or relied upon by any other person, filed with any
other government agency or quoted in any other document.
Very truly yours,
Williams, Mullen, Clark & Dobbins, P.C.
By:____________________________________
