Exhibit 99
Highlands Bankshares Enters into Share Purchase
Agreement With The National Bank of Xxxxx
August 22, 2005 - Today, Highlands Bankshares, Inc. (OTCBB:HBSI) entered
into a Stock Purchase Agreement (the "Agreement") to purchase the outstanding
shares of common stock of The National Bank of Xxxxx.
Highlands and Xxxxx have agreed to the affiliation of their two companies
through a stock purchase agreement, under West Virginia law, as a result of
which Xxxxx would become a subsidiary of Highlands and shareholders of Xxxxx
would receive cash from Highlands for the sale of their outstanding shares of
the capital stock of Xxxxx. Following the purchase, Highlands will cause Xxxxx
to merge with and into The Grant County Bank, a wholly owned subsidiary of
Highlands, with The Grant County Bank surviving the merger and remaining a
wholly owned subsidiary of Highlands. Pursuant to the Agreement, each of the
sellers of stock of The National Bank of Xxxxx shall transfer all of the shares
owned by each seller to Highlands in exchange for cash equal to $10,400 per
share. There are currently 500 shares of common stock of Xxxxx issued and
outstanding. The merger is expected to close in the fourth quarter of 2005. The
Agreement has been approved by the Boards of Directors of Highlands and Xxxxx,
but is contingent upon the holders of at least eighty percent of the issued and
outstanding shares of The National Bank of Xxxxx agreeing to sell and having
sold their shares to Highlands. In addition, the sale and subsequent merger are
subject to the approval of regulatory authorities.
The National Bank of Xxxxx, headquartered in Xxxxx, West Xxxxxxxx,
operates two banking locations. As of June 30, 2005, the bank had assets
totaling $25,028,000, deposits totaling $23,025,000 and shareholders' equity
totaling $1,728,000.
Highlands Bankshares, Inc., is a multi-bank holding company operating nine
banking locations through its subsidiary banks, The Grant County Bank and Capon
Valley Bank, and offers insurance services through its wholly owned subsidiary
HBI Life Insurance Company. As of June 30, 2005, Highlands had assets totaling
$311,337,000.
Commenting on the potential merger, Xxxxx Xxxxxx, President and CEO of
Highlands, said, "We are very excited about the possibilities this merger will
give us. For the past several years, expansion westward into Xxxxxx County has
been frequently discussed, and this purchase allows us to enter this market
through purchase of a banking organization with many years of history in that
marketplace. The eastern half of Xxxxxx County has recently experienced the type
of growth we feel will be beneficial to our operational results in the coming
years."
"In addition to the market opportunities we believe exist for us in
Xxxxx' geographic area of operations, synergies gained through merging Xxxxx
into The Grant County Bank's current operation also presents potential in the
form of increases in the return to Highlands' shareholders.
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Xxxxxx continued, "We anticipate becoming an integral part of the
community in Xxxxxx County and surrounding areas, and look forward to serving
the banking needs of the residents and businesses there."
Adding to the commentary regarding the potential merger, Xxx Xxxxxxxx,
President of The National Bank of Xxxxx said, "We feel that this agreement will
be a benefit to the current customers of The National Bank of Xxxxx in that
additional products and services will be available to them after the merger.
Often, small banking organizations like Xxxxx are rather limited in what they
can offer as compared to larger organizations."
Xxxxxxxx commented further that, "In deciding to move forward with this
Agreement, the Board of Directors of Xxxxx felt that while Highlands Bankshares
and The Grant County Bank are bigger organizations than The National Bank of
Xxxxx, they are still small enough, and local enough, to retain `home town
values' and to be a fundamental part of the community in eastern Xxxxxx County
in the years to come."
The Agreement has been filed as an exhibit to a Current Report on Form 8-K
filed with the Securities and Exchange Commission and can be found by accessing
the website of the Securities and Exchange Commission at xxx.xxx.xxx and under
the filings of Highlands Bankshares, Inc.
The above description of the merger does not purport to be a complete
statement of the parties' rights and obligations under the Agreement and is
qualified in its entirety by reference to the Agreement. Certain statements in
this release may constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
are statements that include projections, predictions, expectations or beliefs
about future events or results or otherwise are not statements of historical
fact. Although the Company believes that its expectations with respect to
certain forward-looking statements are based upon reasonable assumptions within
the bounds of its existing knowledge of its business and operations, there can
be no assurance that actual results, performance or achievements of the Company
will not differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. The Company does not
update any forward-looking statements that may be made from time to time by or
on behalf of the Company.
