F&M Financial Corp. to purchase the Atlantic Financial Corp. for 2.38 times revenue, The

Weekly Corporate Growth Report, Jul 17, 2000

Featured Transaction

The Deal: The F&M National Corp., a bank holding company, has agreed to acquire the Atlantic Financial Corp. for $72.5 million in stock. F&M Financial will offer 0.753 share of its common stock for each Atlantic share, valuing Atlantic at $17.27 a share, based on F&M Financial's current price. Shares of F&M Financial fell 6.25 cents, to $22.3125, while Atlantic Financial shares rose $1.6875, to $15.4375, after the news of the acquisition was announced.

Discussion: Atlantic Financial is the holding company for Peninsula Trust Bank and United Community Bank, which serve Virginia through 15 branch locations. Targeting individuals and small to midsized businesses, the banks offer standard deposit services like checking and savings accounts, money market accounts, and CDs. Lending activities consist mostly of commercial real estate and residential mortgage loans; the banks also write home equity, agricultural, commercial and installment loans. Through Johnson Mortgage Company, the banks provide brokerage services.

F&M National is a holding company for nine banks operating 125 branches in Virginia, West Virginia and Maryland. Targeting individuals and businesses, the banks offer standard retail services like checking and savings accounts, money market accounts and CDs; specialty services including insurance, securities and annuities are also available. Lending activities consist mostly of residential and commercial mortgages, which each account for 30 percent of the loan portfolio, as well as consumer and commercial loans. Through F&M Trust Company, the company also provides trust services.