Park Sterling Corporation (NASDAQ:PSTB) ("Park Sterling"), the
holding company for Park Sterling Bank, and First Capital Bancorp,
Inc. (NASDAQ:FCVA) ("First Capital"), the holding company for First
Capital Bank, announced today the signing of a definitive merger
agreement under which Park Sterling will acquire First Capital for
a total transaction value of approximately $82.5 million, based on
Park Sterling's closing share price of $6.80 on September 30, 2015.
Upon completion of the transaction, the combined company will
have approximately $3.1 billion in total assets, $2.2 billion in
total loans, $2.4 billion in total deposits and a network of 60
offices in the Carolinas, Virginia and North Georgia. The merger
will strengthen Park Sterling's position in the important Richmond,
VA MSA, which will become the company's second largest deposit
market after the Charlotte-Concord-Gastonia, NC-SC MSA, by
expanding the distribution network from two to ten branches, adding
an experienced lending team and gaining senior market management
and credit risk leadership.
The merger agreement has been approved by the board of directors
of each company. Closing of the transaction, which is expected to
occur in the first quarter of 2016, is subject to customary
conditions, including approval by First Capital's shareholders and
receipt of regulatory approval. At closing, First Capital will
merge with and into Park Sterling and, as soon as practicable
following the closing, it is anticipated that First Capital Bank
will merge with and into Park Sterling Bank.
"Our proposed merger with First Capital is a meaningful addition
to our already strong regional community bank franchise in
Virginia, the Carolinas and North Georgia. The partnership helps us
achieve our strategic goal of building out our Richmond presence by
significantly enhancing our local branch network and adding
talented bankers and leadership to our exceptional local team. It
also increases our operating scale to drive immediate efficiencies
and provides accelerated revenue growth opportunities to further
strengthen financial returns to shareholders," said James C.
Cherry, Chief Executive Officer of Park Sterling. "We are pleased
to partner with John Presley, Bob Watts and their team at First
Capital, whom we have known and respected for many years. We are
thrilled to further expand our presence in Virginia, which so many
of our executives and directors call 'home', and are excited to be
a part of building an exceptional banking partnership for the
Richmond community."
John M. Presley, Managing Director and Chief Executive Officer
of First Capital, who will transition from executive management to
a consulting role with the company at closing, commented, "We are
excited to enter into this partnership with Park Sterling. We
believe the combined company's exceptional employees, strong
balance sheet and broad array of products and services will better
serve our local customers and enhance shareholder value. The
combined company will be a dominant player in the Richmond
market."
Under the terms of the merger agreement, First Capital common
shareholders will have the right to receive either $5.54 in cash or
0.7748 Park Sterling shares for each First Capital share they hold,
subject to the limitation that the total consideration for
shareholders will consist of 30.0% in cash and 70.0% in Park
Sterling shares. First Capital warrant holders will have the right
to receive either $1.77 in cash or 0.24755 Park Sterling shares for
each First Capital warrant they hold, subject to the limitation
that the total consideration for warrant holders will consist of
30.0% in cash and 70.0% in Park Sterling shares. Those First
Capital shares and warrants exchanged for stock will convert to
Park Sterling shares in what is intended to be a tax-free exchange.
Cash will also be paid in lieu of fractional shares. The
transaction value at the time of the proposed merger may change due
to potential fluctuations in the price of Park Sterling stock. Park
Sterling's board of directors will also appoint two independent,
Richmond-based First Capital directors to join the Park Sterling
board, to include Grant Grayson, Partner in the law firm of
LeClairRyan, A Professional Corporation, and current chairman of
First Capital.
Keefe, Bruyette & Woods, Inc. served as financial advisor to
Park Sterling, and Banks Street Partners, LLC served as financial
advisor to First Capital. McGuireWoods LLP served as outside legal
counsel to Park Sterling, while LeClairRyan, A Professional
Corporation, served as outside legal counsel to First Capital.
Webcast
Park Sterling Corporation will host a conference call this
morning at 8:30 a.m., EDT (October 1, 2015). The conference call
can be accessed by dialing (888) 317-6003 and entering the elite
entry number 2516704. Participants will need this elite entry
number in order to join the conference. Listeners should dial in 10
minutes prior to the start of the call. The presentation slides
will be available on www.parksterlingbank.com under Investor
Relations, "Investor Presentations." A replay of the call will also
be available approximately one hour after the end of the call
through 9:00 a.m., EDT on or around November 1, 2015. To access the
replay dial (877) 344-7529, conference code 10073448.
Additional Information About the Merger and Where to Find It
Park Sterling will file with the Securities and Exchange
Commission a Registration Statement on Form S-4 that will include a
proxy statement of First Capital that also constitutes a prospectus
of Park Sterling, as well as other relevant documents concerning
the proposed merger. INVESTORS ARE STRONGLY URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED MERGER WHEN THEY BECOME AVAILABLE AND OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION REGARDING THE PROPOSED MERGER. A free copy of the proxy
statement/prospectus, as well as other filings containing
information about Park Sterling and First Capital, may be obtained
after their filing at the SEC's Internet site (http://www.sec.gov).
In addition, free copies of documents filed with the SEC may be
obtained on the respective websites of Park Sterling and First
Capital at www.parksterlingbank.com and www.1capitalbank.com.
Participants in Solicitation
Park Sterling and First Capital and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in connection with the proposed merger.
Information about the directors and executive officers of Park
Sterling and First Capital and other persons who may be deemed
participants in this solicitation will be included in the proxy
statement/prospectus. Information about Park Sterling's executive
officers and directors can be found in Park Sterling's definitive
proxy statement in connection with its 2015 Annual Meeting of
Shareholders filed with the SEC on April 13, 2015. Information
about First Capital's executive officers and directors can be found
in First Capital's definitive proxy statement in connection with
its 2015 Annual Meeting of Shareholders filed with the SEC on April
15, 2015. Free copies of these documents can be obtained from the
sources indicated above.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any offer, solicitation or sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
About Park Sterling Corporation
Park Sterling Corporation, the holding company for Park Sterling
Bank, is headquartered in Charlotte, North Carolina. Park Sterling,
a regional community-focused financial services company with
approximately $2.4 billion in assets, is the largest community bank
headquartered in the Charlotte area and has 52 banking offices
stretching across the Carolinas and into North Georgia, as well as
in Richmond, Virginia. The bank serves professionals, individuals,
and small and mid-sized businesses by offering a full array of
financial services, including deposit, mortgage banking, cash
management, consumer and business finance, capital markets and
wealth management services with a commitment to "Answers You Can
Bank OnSM." Park Sterling prides itself on being large enough to
help customers achieve their financial aspirations, yet small
enough to care that they do. Park Sterling is focused on building a
banking franchise that is noted for sound risk management, strong
community focus and exceptional customer service. For more
information, visit www.parksterlingbank.com. Park Sterling
Corporation shares are traded on NASDAQ under the symbol PSTB.
About First Capital Bancorp, Inc.
First Capital Bancorp, Inc. is a bank holding company
headquartered in Glen Allen, Virginia. First Capital is a community
oriented financial institution that offers a full range of banking
and related financial services to small and medium-sized
businesses, professionals and individuals located in its market
area. First Capital operates eight branches in Innsbrook,
Chesterfield Towne Center, near Willow Lawn on Staples Mill Road,
in Ashland, at Three Chopt and Patterson in Henrico County, at the
James Center in downtown Richmond, and in Chesterfield County, in
Bon Air and inside the Village at Swift Creek Kroger store.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains, and Park Sterling and First Capital
and their respective management may make, certain statements that
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
can be identified by the fact that they do not relate strictly to
historical or current facts and often use words such as "may,"
"plan," "contemplate," "anticipate," "believe," "intend,"
"continue," expect," "project," "predict," "estimate," "could,"
"should," "would," "will," "goal," "target" and similar
expressions. These forward-looking statements express management's
current expectations or forecasts of future events and, by their
nature, are subject to risks and uncertainties and there are a
number of factors that could cause actual results to differ
materially from those in such statements. Factors that might cause
such a difference include, but are not limited to: the occurrence
of any event, change or other circumstances that could give rise to
the termination of the merger agreement with First Capital; the
risk that a closing condition to the merger may not be satisfied;
synergies and other financial benefits from the proposed merger may
not be realized within the expected time frames; costs or
difficulties related to closing and/or integration matters might be
greater than expected; inability to obtain governmental approvals
of the combination on the proposed terms and schedule; failure of
First Capital's shareholders to approve the merger; failure of Park
Sterling to raise the necessary funds to satisfy the cash component
of the merger consideration; changes in loan mix, deposit mix,
capital and liquidity levels, emerging regulatory expectations and
measures, net interest income, noninterest income, noninterest
expense, credit trends and conditions, including loan losses,
allowance for loan loss, charge-offs, delinquency trends and
nonperforming asset levels, deterioration in the value of
collateral securing loans, deterioration in the value of securities
held for investment, the impacts of a potential increasing rate
environment, and other similar matters with respect to Park
Sterling or First Capital; inability to identify and successfully
negotiate and complete additional combinations with other potential
merger partners or to successfully integrate such businesses into
Park Sterling, including the company's ability to adequately
estimate or to realize the benefits and cost savings from and limit
any unexpected liabilities acquired as a result of any such
business combinations; failure to generate an adequate return on
investment related to new branches or other hiring initiatives;
inability to generate future organic growth in loan balances,
retail banking, wealth management, mortgage banking or capital
markets results through the hiring of new personnel, development of
new products, including new online and mobile banking platforms for
treasury services, opening of de novo branches or otherwise;
inability to capitalize on identified revenue enhancements or
expense management opportunities, including the inability to
achieve targeted adjusted noninterest expense to adjusted operating
revenue targets; inability to generate future ATM and card income
from marketing expenses; variability in the performance of covered
loans and associated loss-share related expenses; the effects of
negative or soft economic conditions, including stress in the
commercial real estate markets or failure of continued recovery in
the residential real estate markets; changes in consumer and
investor confidence and the related impact on financial markets and
institutions; changes in interest rates; the possibility of
recognizing other than temporary impairments on holdings of
collateralized loan obligation securities as a result of the
Volcker Rule; the potential impacts of any government shutdown or
debt ceiling impasse, including the risk of a U.S. credit rating
downgrade or default, or continued global economic instability,
which could cause disruptions in the financial markets, impact
interest rates, and cause other potential unforeseen consequences;
fluctuations in the market price of the common stock, regulatory,
legal and contractual requirements of Park Sterling or First
Capital, other uses of capital, either company's financial
performance, market conditions generally, and future actions by the
boards of directors, in each case impacting repurchases of common
stock or declaration of dividends; legal and regulatory
developments, including changes in the federal risk-based capital
rules; increased competition from both banks and nonbanks; changes
in accounting standards, rules and interpretations, inaccurate
estimates or assumptions in accounting, including acquisition
accounting fair market value assumptions and accounting for
purchased credit-impaired loans, and the impact on Park Sterling's
or First Capital's financial statements; and either management's
ability to effectively manage credit risk, market risk, operational
risk, legal risk, and regulatory and compliance risk.
You should not place undue reliance on any forward-looking
statement and should consider all of the following uncertainties
and risks, as well as those more fully discussed in any of Park
Sterling's or First Capital's filings with the SEC. Forward-looking
statements speak only as of the date they are made, and Park
Sterling and First Capital undertake no obligation to update any
forward-looking statement to reflect the impact of circumstances or
events that arise after the date the forward-looking statement was
made.
CONTACT: James C. Cherry
Chief Executive Officer
Park Sterling Corporation
704-323-4300
jim.cherry@parksterlingbank.com
John M. Presley
Managing Director and CEO
First Capital Bancorp, Inc.
804-273-1254
jpresley@1capitalbank.com
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