Alabama National BanCorporation Announces Acquisition of Indian River Banking Company of Vero Beach, Florida - Conference Call Scheduled

Business Wire, Oct 22, 2003

Business Editors

BIRMINGHAM, Ala. & VERO BEACH, Fla.--(BUSINESS WIRE)--Oct. 22, 2003

Alabama National BanCorporation (NASDAQ/NMS: ALAB) ("ANB"), headquartered in Birmingham, Alabama, and Indian River Banking Company, headquartered in Vero Beach, Florida ("Indian River"), today jointly announced the signing of a definitive agreement providing for the acquisition of Indian River by ANB. Under the agreement, Indian River shall be merged with and into ANB, and Indian River's bank subsidiary, Indian River National Bank, will become a wholly owned subsidiary of ANB. Following the acquisition, Indian River National Bank will continue to operate under its existing name, management, and board of directors. The acquisition is subject to regulatory approval, Indian River shareholder approval, and certain other conditions. ANB expects the transaction to close sometime in the first quarter of 2004.

Under the terms of the agreement, ANB will issue 0.9408 ANB common shares for each Indian River share. Based on ANB's closing market price today of $50.80 per share, the proposed transaction represents an exchange value of $47.79 for each common share of Indian River. This exchange ratio could adjust upward within certain limits upon a decrease in the market price of ANB common stock between now and a specified period prior to closing. Options to purchase Indian River common stock will be converted into options to purchase ANB common stock. In addition, Indian River shareholders will have the option to elect to receive cash for up to 10% of the total consideration.

John H. Holcomb, III, Chairman of the Board and CEO of ANB, and Paul A. Beindorf, CEO of Indian River, jointly announced the agreement.

"We are very pleased to have Indian River join our organization. Its history of excellent service and community banking on the treasure and space coast of Florida has allowed it to grow to over $500 million in assets. At the same time, it has maintained excellent asset quality and profitability. Its management, employees, and board of directors will be a great addition to Alabama National BanCorporation," Holcomb stated.

"Indian River's merger with Alabama National brings together two quality institutions with very similar corporate values," said Beindorf. "ANB's philosophy of local decision making makes it an excellent partner for Indian River. Our customers can be reassured that the people who serve them today will be there to serve them tomorrow. We will continue to grow the IRNB franchise in the Indian River and Brevard County markets and hope to play a significant part in growth of the combined company. We are very excited by this strategic combination. We look forward to further serving our customers' needs with expanded products and services available to us with Alabama National."

As of September 30, 2003, Indian River had assets of approximately $520 million. Its primary subsidiary, Indian River National Bank, was founded in 1985, and serves its customer base through eight offices located in Indian River County and Brevard County, Florida.

ANB is a bank holding company operating 69 locations through twelve bank subsidiaries in Alabama, Florida and Georgia. The largest subsidiary for the holding company is Birmingham-based National Bank of Commerce (NBC). Other Alabama subsidiaries include: First American Bank in Decatur/Huntsville, Athens and Auburn/Opelika; First Citizens Bank in Talladega; Bank of Dadeville; Alabama Exchange Bank in Tuskegee and First Gulf Bank in Baldwin County. Florida subsidiaries are: Citizens & Peoples Bank, N.A. in Pensacola; Community Bank of Naples, N.A.; Millennium Bank in Gainesville; Peoples State Bank in Groveland; and Public Bank in metropolitan Orlando and Vero Beach. ANB has one subsidiary in Georgia, Georgia State Bank in metropolitan Atlanta. In addition, ANB announced on October 15th the signing of a definitive agreement for the acquisition of Cypress Bank of Palm Coast, Florida. ANB provides full banking services to individuals and businesses. Brokerage services are provided to customers through NBC's wholly-owned subsidiary, NBC Securities, Inc. Insurance services are provided through ANB Insurance Services, Inc., a wholly owned subsidiary of First American Bank. Investment and Insurance products are not FDIC insured and are not guaranteed or an obligation of a financial institution or government agency. Investment products involve risk, including loss of principal. Insurance products are not a condition to the extension of a credit, and have no guarantee of insurance underwriting performance.

Alabama National BanCorporation common stock is traded on the NASDAQ National Market System under the symbol "ALAB."

Under the terms of the agreement, ANB will issue approximately 2,150,000 in total ANB common shares and share equivalents to Indian River shareholders. If all options held by Indian River option holders are exercised, ANB would issue a gross total of approximately 2,237,000 ANB common shares in the proposed transaction to Indian River shareholders and option holders. Based on the current market price for ANB common stock and trailing 12 month earnings of Indian River the purchase price to be paid to Indian River shareholders would have a price-to-book ratio of approximately 301% and a price-to-earnings ratio of approximately 21.8 times. Based upon current expectations for Indian River's profitability, the ability to achieve certain designated cost savings, and ANB's current expectations for ANB profitability, ANB management estimates that the proposed acquisition of Indian River will be approximately 2% dilutive to GAAP earnings per share and neutral to cash earnings per share in the first year after closing. Expectations are that the proposed acquisition will be accretive in the second year following closing for cash earnings per share and accretive in the third year following closing for GAAP earnings per share. Depending upon Indian River net income and retention of capital between now and closing, ANB expects the proposed acquisition to be approximately neutral to tangible book value per share at closing.