* Strengthens Commercial Market Position in Metro Washington
and Northern Virginia
* Extends Presence into Central and Eastern Virginia
BALTIMORE, Nov. 3 /PRNewswire-FirstCall/ --
Provident Bankshares Corporation (Nasdaq: PBKS), the parent company of
Provident Bank, the second largest independent commercial bank headquartered
in Maryland, and Southern Financial Bancorp, Inc., (Nasdaq: SFFB), the parent
company of Southern Financial Bank, announced today the signing of a
definitive agreement for Southern Financial Bancorp to be merged into
Provident Bankshares Corporation.
The merger reflects Provident's clearly defined business strategies that
include expansion into the Metro Washington area. Provident first entered that
region as a result of a merger with First Citizens Financial Corporation.
That transaction added 15 branches to Provident's network and a solid presence
in Washington's Maryland suburbs. Currently, Provident operates 116 offices
including both traditional and in-store locations. The bank has 50 branches
in Metro Washington and 66 in the Baltimore area. Provident's network now
stretches from Baltimore into Frederick, Montgomery and Prince George's
Counties of Maryland as well as into Northern Virginia and southern
Pennsylvania.
Southern Financial Bank, based in Warrenton, Virginia, was founded in
1986. It is the largest Virginia based bank operating in the Commonwealth's
most attractive markets. Southern Financial will have $1.5 billion in assets
and operate 33 offices following its acquisition of Essex Bancorp, Inc. which
is expected to close in the first quarter of 2004. Including Essex, the bank
has branches in the fast growing Northern Virginia areas of Fairfax, Loudoun
and Prince William Counties as well as Richmond, Charlottesville and the
Tidewater areas. Southern Financial is a leading SBA lender with a strong
business banking focus. In July of 2003, Southern was ranked 12th on Fortune
Small Business' list of America's Fastest Growing Small Companies.
Provident Bankshares Corporation Chairman and Chief Executive Officer Gary
N. Geisel called the merger an "excellent fit" for both companies. "We've
been looking for the right strategic fit for us in Northern Virginia for over
three years and with Southern Financial, I'm certain we found that fit-
strategically, culturally and financially. Strategically, we extend our reach
into Northern Virginia and add Southern Financial's strong business banking
focus to our core competency, consumer banking. Culturally, both
organizations pursue strong commitments to our customers, our employees and
the communities we serve. And financially, we see opportunities to accelerate
the improvement in our balance sheet fundamentals and provide long-term
shareholder value.
Southern Financial Bancorp Chairman and Chief Executive Officer Georgia S.
Derrico said, "We believe that Southern Financial and its core of dedicated
employees have built a unique institution focused on small and middle market
customers. Our goal has been to provide every credit and non-credit banking
service which any middle-market business could conceivably require. That has
been the engine of our growth. Provident will continue to support that focus.
In addition, our strategic partnership with Provident will bring an expanded
product base and a vastly more sophisticated marketing capability to our
retail branch system. Combining our commercial banking business with
Provident's superb retail base will create a Mid-Atlantic powerhouse.
Since I founded this company in 1986, I have always focused on the best
interest of our shareholders and this merger agreement continues that
emphasis. For our customers and employees, this represents a new chapter - but
one we believe will fuel personal growth for our employees and business growth
for our customers."
Terms of the Merger
Under the terms of this $330 million transaction, shareholders of Southern
Financial will receive 1.0875 shares of Provident common stock and $11.125 in
cash for each Southern Financial share held. Based upon the stated value of
$44.50 the price represents 272% of pro forma book value and 19.0x 2004
Earnings Per Share per First Call. The merger, which is subject to regulatory
and shareholder approval, is expected to be completed in the second quarter of
2004. In the first full year of operation, Provident expects the Southern
Financial transaction to be accretive to GAAP earnings and neutral to tangible
capital.
Provident/Southern: A Strategic Partnership
Provident Bankshares Corporation Chairman and Chief Executive Officer Gary
N. Geisel added, "We have consistently commented that further expansion into
the Metro Washington market and enhanced commercial business operations were
key business strategies for Provident. This merger not only extends
Provident's presence in these attractive markets but it also provides Southern
Financial customers with more options and convenience for all of their banking
needs. At the same time, Southern Financial's established business banking
relationships will play a key role in our plans to boost Provident's
commercial presence in this growing, vibrant region. We are confident that the
combined organization will provide an outstanding sales and service experience
for our customers, a rewarding environment for our employees and superior long
term returns for our shareholders."
Provident Bankshares Corporation is the holding company for Provident
Bank, a regional, full-service commercial bank with $4.9 billion in assets.
Provident serves individuals and businesses in the dynamic Baltimore-
Washington corridor through a network of 116 offices in Maryland, Northern
Virginia and southern York County, Pennsylvania. Provident Bank offers a
complete line of financial services that include retail and commercial banking
and additional services through wholly owned subsidiaries. Mutual funds,
annuities, and insurance products are available through Provident Investment
Company and leases through Court Square Leasing and Provident Lease Corp.
Visit Provident on the Web at http://www.provbank.com
Southern Financial Bancorp, Inc. and its subsidiary, Southern Financial
Bank specialize in providing a broad spectrum of financial services to
individuals and small to medium size businesses. Headquartered in Warrenton,
Virginia, the Bank serves through a network of 27 branches located in Northern
Central Virginia and Washington D.C. Southern Financial Bank offers a
complete spectrum of deposit products. In addition, Southern Federal is an
active lender to small businesses and consumers. Southern Financial Bank
ranked as the leading originator of U.S. Small Business Administration (SBA)
loans in dollar volume approved by the Richmond and Washington, D.C. regional
offices of the SBA for the fiscal year ended 9/30/02. Visit Southern
Financial on the web at http://www.southernfinancialbank.com
Analyst and Investor Teleconference
Executives from Provident Bank and Southern Financial will conduct a
teleconference for analysts and investors today at 10:30 am eastern standard
time. The phone number for the call is (800) 915-4836. The teleconference
will also be webcast on the Provident website at http://www.provbank.com. Choose the
selection for "Corporate Information and Investor Relations" to access the
link to the webcast. The teleconference will include forward-looking
information. A replay of the webcast will be available until November 30,
2003. An audio replay of the teleconference will also be available until
11:59 p.m. November 10, 2003 at (800) 428-6051, passcode ID 311956. A
presentation summarizing the transaction will be posted on the Provident
website today and can be accessed by selecting the link to Corporate
Information and Investor Relations and then selecting the link to
Presentations.
Provident Bankshares Corporation and Southern Financial Bancorp, Inc. will
be filing a joint proxy statement/prospectus and other relevant documents
concerning the merger with the United States Securities and Exchange
Commission (the "SEC").
WE URGE INVESTORS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY
OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION.
Investors will be able to obtain these documents free of charge at the
SEC's web site (http://www.sec.gov). In addition, documents filed with the SEC by
Provident Bankshares Corporation will be available free of charge from the
Investor Relations Department at Provident Bankshares Corporation, 114 East
Lexington Street, Baltimore, Maryland 21202. Documents filed with the SEC by
Southern Financial Bancorp, Inc. will be available free of charge from the
Investor Relations Department at Southern Financial Bancorp, Inc., 37 East
Main Street, Warrenton, Virginia 20186.
The directors, executive officers, and certain other members of management
of Provident Bankshares Corporation and Southern Financial Bancorp, Inc. may
be soliciting proxies in favor of the merger from the companies' respective
shareholders. For information about these directors, executive officers, and
members of management, shareholders are asked to refer to the most recent
proxy statements issued by the respective companies, which are available on
their web sites and at the addresses provided in the preceding paragraph.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
This release, and the associated conference call, web cast, other written
materials, and statements management may make, may contain certain
forward-looking statements regarding the Company's prospective performance and
strategies within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The Company intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and is including this statement for
purposes of said safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies, and expectations of the Company, are
generally identified by use of the words "plan," "believe," "expect,"
"intend," "anticipate," "estimate," "project," or other similar expressions.
The Company's ability to predict results or the actual effects of its plans
and strategies is inherently uncertain. Accordingly, actual results may
differ materially from anticipated results.
The following factors, among others, could cause the actual results of the
merger to differ materially from the expectations stated in this release and
the associated conference call and web cast: the ability of the companies to
obtain the required shareholder or regulatory approvals of the merger; the
ability of the companies to consummate the merger; the ability of Southern
Financial to timely complete its acquisition of Essex Bancorp, Inc.; the
ability to successfully integrate the companies following the merger; a
materially adverse change in the financial condition of either company; the
ability to fully realize the expected cost savings and revenues; and the
ability to realize the expected cost savings and revenues on a timely basis.
Other factors that could cause the actual results of the merger to differ
materially from current expectations include a change in economic conditions;
changes in interest rates, deposit flows, loan demand, real estate values, and
competition; changes in accounting principles, policies, or guidelines;
changes in legislation and regulation; and other economic, competitive,
governmental, regulatory, geopolitical, and technological factors affecting
the companies' operations, pricing, and services.
The Company undertakes no obligation to update these forward-looking
statements to reflect events or circumstances that occur after the date on
which such statements were made.
SOURCE Provident Bankshares Corporation
 back to top
Related links:
http://www.provbank.com
Company News On-Call:
http://www.prnewswire.com/comp/721938.html
CONTACT:
Media: Lillian Kilroy, +1-410-277-2833, or
Investors: Josie Porterfield, +1-410-277-2889, both of Provident
Bankshares; Southern Financial Bancorp, Inc. Contact: Patricia
A. Ferrick, Senior VP and CFO: +1-540-349-3900
|
