Agreement to Create Southeast's Premier High-Growth Banking Franchise
MEMPHIS, Tenn. and DURHAM, N.C., March 20 /PRNewswire/ -- National
Commerce Bancorporation (Nasdaq: NCBC) and CCB Financial Corporation
(NYSE: CCB) today announced they have signed a definitive merger of equals
agreement creating the Southeast's premier high-growth banking franchise. The
combined company, which will retain the name National Commerce Bancorporation,
will be headquartered in Memphis, Tennessee, with its operations headquarters
in Durham, North Carolina. The company will have assets of $15 billion and a
pro forma market capitalization of $4.2 billion.
Under the terms of the agreement, CCB Financial shareholders will receive
2.45 shares of NCBC common stock. The combined company's 20-seat board of
directors will be made up of 10 directors each from CCB and NCBC. The
transaction will be a tax-free exchange of shares and will be accounted for as
a pooling-of-interests.
Based upon National Commerce Bancorporation's closing share price on
March 17, 2000, the transaction values each CCB Financial common share at
$48.23, a premium of 25 percent to CCB Financial's closing share price on that
date. Common stockholders of NCBC will have ownership of approximately
53 percent of the combined company, while CCB Financial's common stockholders
will own approximately 47 percent.
The merger, which has been unanimously approved by the boards of directors
of both companies, is conditioned upon standard regulatory and shareholder
approvals and is expected to close in the third quarter of 2000.
Thomas M. Garrott, chairman and chief executive officer of NCBC, will
become chairman of the combined company, while Ernest C. Roessler, chairman
and chief executive officer of CCB Financial, will become chief executive
officer of National Commerce Bancorporation upon the closing of the
transaction. Both Garrott and Roessler will co-head the transition team,
which will manage the integration of the new company.
"This transaction builds on the strengths of two highly successful
companies. Both of our companies, which are ranked by USBanker magazine as
being among the top 10 performing banks in the country, have emphasized high
earnings growth and superior financial and shareholder returns," said Garrott.
"Tom and I share a vision and an operating philosophy of high growth
regional banking," commented Roessler. "This union of our two companies
marries each of their inherent strengths. NCBC has an unparalleled track
record of generating high-growth and returns in retail banking and is the
preeminent innovator in the area of in-store supermarket banking. CCB
Financial has a long and demonstrated record of building shareholder value and
a core competency in high growth commercial banking. In addition, both
companies have developed highly attractive non-bank businesses which will
continue to drive the two companies' exceptional growth rates while also
diversifying the earnings streams," he said.
"In addition, our combined banking franchise will have top-tier market
positions in some of the fastest growing regional economies in the U.S.,
including the #1 position in deposit market share in the Research Triangle
[Raleigh, Durham and Chapel Hill, N.C.] and top-three market share positions
in the Triad [Winston-Salem, High Point and Greensboro, N.C.] and in Memphis,"
added Roessler. "Our combined business model will be better balanced going
forward to provide both increased geographic and revenue diversification to
our shareholders. Given our conservative cost savings projections and near
identical technology platforms, we also believe that our transaction is low
risk, especially since revenue synergies we identified are excluded from the
projections."
"By combining both of our companies' core competencies and best
practices," added Garrott, "we can ensure that NCBC will maximize the
financial, product and cultural strengths of our attractive regional
franchise. I look forward to working with Ernie to sustain NCBC's high growth
rate and in delivering to our combined shareholders returns they associate
with our respective companies," Garrott said.
NCBC will maintain its existing brand names in all markets outside the
Carolinas, while the combined company will operate as CCB in the Carolinas.
Senior managers who will report directly to Roessler include William R.
Reed Jr., chief operating officer; Sheldon M. Fox, chief financial officer;
J. Scott Edwards, chief administrative officer; and Lewis E. Holland,
president of financial enterprises. Other key members of the combined
company's management team include Richard L. Furr, who will serve as president
of the banks in both Carolinas, Virginia, and West Virginia; and
David T. Popwell, executive vice president for mergers and acquisitions.
It is estimated that the combined company will reduce its operating
expenses by approximately $50 million annually, representing 12 percent of its
combined expense base. National Commerce Bancorporation and CCB Financial
have emphasized, however, that while significant cost savings would be
available through the consolidation of back office and other
non-customer-sensitive functional areas, they have largely contiguous
geographic franchises, mitigating merger integration risk. The transaction is
expected to be 18.8 percent accretive to NCBC's estimated 2001 earnings per
share based on FirstCall estimates and assuming 85 percent phase-in of the
anticipated merger synergies.
National Commerce Bancorporation is a $7.3 billion-asset bank holding
company (excludes $500 million in assets in First Market Bank-Richmond, Va.)
based in Memphis, Tennessee. NCBC operates 162 branches in seven Southeastern
states (Tennessee, Virginia, North Carolina, Georgia, Arkansas, West Virginia
and Mississippi.)
CCB Financial, based in Durham, North Carolina, is an $8.2 billion-asset
bank holding company which operates 208 branches in the Southeastern states of
North and South Carolina. The Trust and Investment Management division has
16 offices in the Carolinas, Virginia and Florida.
Credit Suisse First Boston provided a fairness opinion and served as
advisor to National Commerce Bancorporation, who was also advised by Morgan
Stanley Dean Witter. J.P. Morgan provided a fairness opinion and served as
exclusive financial advisor to CCB Financial.
Forward-Looking Statements
The matters discussed in this press release contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 that involve substantial risks and uncertainties. Actual results
could differ materially from those described in this press release. Factors
that could cause or contribute to these differences include, but are not
limited to: the risk that the businesses of NCBC and CCB may not be
integrated successfully or within the time frame envisioned, the risk that the
expected financial results, business opportunities and synergies anticipated
to result from this business combination will not be achieved or will fail to
be achieved within the expected time frame, and the various matters discussed
under the heading "Management's Discussion and Analysis of Financial Condition
and Results of Operation" in CCB's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 (filed with the Securities and Exchange
Commission ("SEC") on March 17, 2000) and under the heading "Forward-Looking
Statements" in NCBC's Registration Statement on Form S-4 (filed with the SEC
on February 18, 2000).
SOURCE National Commerce Bancorporation
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Related links:
http://www.ncbccorp.com
CONTACT:
M.J. "Jekka" Ashman of National Commerce
Bancorporation, 901-523-3525, or Eileen Sarro of CCB Financial,
919-683-7642
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