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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 1, 1999
FIRST STERLING BANKS, INC.
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(Exact name of registrant as specified in its charter)
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GEORGIA 33-78046 58-2104977
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(State of other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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676 CHASTAIN ROAD, KENNESAW, GEORGIA 30144
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(Address of Principal Executive Officers)
770-422-2888
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Registrant's Telephone Number, including area code
1200 BARRETT PARKWAY, KENNESAW, GEORGIA 30144
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
PRESS RELEASE
December 1, 1999
For more information call:
Edward C. Milligan at (770) 422-2888
Or
Sam B. Hay at (770) 385-2424
First Sterling Banks, Inc. (NASDAQ: FSLB), and Main Street Banks
Incorporated today announced the signing of a definitive agreement to merge the
two suburban Atlanta banking companies. The merger of equals combination will
create the largest community banking organization based in the Atlanta
Metropolitan area. Upon consummation of the merger, which is expected to occur
by June of 2000, the combined entity is expected to have over $900 million in
total assets.
The combined companies will operate under the corporate name of First
Sterling Banks, Inc. The Board of Directors is expected to consist of eight
directors, four from First Sterling and four from Main Street. The Chairman of
the Board will be Robert R. Fowler, III, the current Chairman and Chief
Executive Officer of Main Street, and Justice P. Harris Hines will serve as Vice
Chairman of the Board. Edward C. Milligan, the current President and Chief
Executive Officer of First Sterling, will continue in that role. Sam B. Hay,
III, currently Executive Vice President and Chief Financial Officer of Main
Street, will become Executive Vice President and Chief Operating Officer of
First Sterling. The headquarters will remain at the current location in
Kennesaw, Georgia.
Under the proposed terms of the transaction, First Sterling will issue 1.01
shares of its stock for every one share of Main Street. Main Street shareholders
are expected to receive approximately 63% of the fully diluted, common shares of
the combined entity of 14.1 million shares. First Sterling shareholders are
expected to own approximately 37% of the fully diluted shares.
This combination will create the largest community banking franchise in the
Atlanta metropolitan area. The combined entity will operate in some of the
nation's most rapidly growing counties, including Clarke, Rockdale, Newton,
Barrow, DeKalb, Cobb and Gwinnett. The combined population of these counties
totals approximately 2.0 million or 26% of the state's population and is
expected to grow to 2.4 million by the year 2010 and account for 41.7% of the
state's projected growth. The resulting company is expected to be highly
profitable. Based on combined results for the third quarter of 1999, combined
return on assets would have been 1.5% and return on equity would have been
17.6%.
The merger is expected to be immediately accretive to earnings per share,
without any benefit from either revenue enhancements or merger efficiencies. The
management of both organizations is committed to identifying and implementing
such opportunities, without disrupting its community banking orientation. The
combination is also expected to be accretive to such performance measurements as
return on assets.
According to Ed Milligan, current President and Chief Executive Officer of
First Sterling, "We believe this combination will result in the pre-eminent
community bank in the metro area. It will allow expanded services to our
customers and communities. Our customers can anticipate no changes in the level
of services that they have been receiving or the bank personnel who have been
serving them."
Rob Fowler said, "We are creating an institution with offices in six
metropolitan Atlanta counties and Athens (Clarke County). We believe the company
will be greater collectively than the two institutions individually. The
transaction will increase our prominence and following in the investment
community. We believe that as a result of the recent acquisition of many of
Georgia's larger independent financial institutions, there is a unique
opportunity for our new company. We believe that the company will enjoy the
benefits of being a larger institution, such as diminishing the costs of
redundant functions, while maintaining the level of service delivered by our
affiliate banks at the local level."
This news release contains forward-looking statements, including estimates
of future operating results and other forward-looking financial information for
Main Street Banks Incorporated and First Sterling
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Banks, Inc. These estimates constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. As such, the
estimates involve significant risks and uncertainties. Actual results may differ
materially due to such factors as: (1) expected cost savings from the merger not
materializing within the expected time frame; (2) revenues following the merger
not meeting expectations; (3) competitive pressures among financial institutions
increasing significantly; (4) costs or difficulties related to the integration
of the businesses of Main Street Banks Incorporated and First Sterling
Banks, Inc. being greater than anticipated; (5) general economic conditions
being less favorable than anticipated; (6) legislation or regulatory changes
adversely affecting the business in which the combined company will be engaged;
and (7) the time of the completion of the transactions.
DATE: December 2, 1999
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FIRST STERLING BANKS, INC.
By: /s/ EDWARD C. MILLIGAN
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Edward C. Milligan
CHAIRMAN & CHIEF EXECUTIVE OFFICER
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