EXHIBIT 99.1
September 7, 1999
F&M BANCORP AND PATAPSCO VALLEY BANCSHARES, INC.
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ANNOUNCE DEFINITIVE MERGER AGREEMENT
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COMBINED COMPANY DEPOSIT MARKET SHARE TO RANK IN MARYLAND TOP 10
Frederick, MD, September 7, 1999 - F&M Bancorp (NASDAQ:FMBN), headquartered
in Frederick, MD, and Patapsco Valley Bancshares, Inc. (OTCBB:PVYB),
headquartered in Ellicott City, MD, jointly announced that they have signed
a definitive agreement for F&M Bancorp to acquire Patapsco Valley
Bancshares, Inc..
The definitive merger agreement provides for a fixed exchange ratio of 1.18
shares of F&M Bancorp's common stock for each share of Patapsco's common
stock. Based on the closing price of F&M Bancorp common stock on September
3, 1999 and the number of shares of common stock of Patapsco currently
outstanding, the transaction has a value of approximately $47 million, or
$34.00 per share of Patapsco common stock. The transaction is intended to
be tax-free to the stockholders of Patapsco and will be accounted for as a
pooling of interests.
Upon completion of the merger, which is subject to the approval of
Patapsco's shareholders and applicable regulatory authorities, Patapsco's
subsidiary, Commercial and Farmers Bank ("CFBank"), will be merged into F&M
Bancorp's commercial banking subsidiary, Farmers & Mechanics National Bank.
All branch locations are expected to remain open.
"We are very pleased to have CFBank become part of the contiguous extension
of our franchise," commented Xxxx X. Xxxxxx, president and chief executive
officer of F&M Bancorp. "CFBank and Farmers & Mechanics National Bank are
financial institutions deeply rooted in the communities we serve. As
community banks, both organizations have a rich history of providing
quality service to customers by establishing strong relationships and
delivering products that meet their needs. Our combined organizations will
strengthen the capabilities of both banks, offering individual and business
customers the convenience of broader geographic access, enhanced products
and services, and increased traditional and non-traditional delivery
channels. By leveraging CFBank's strong market share throughout the very
attractive markets of Xxxxxx County, we expect continued strong growth for
our organizations."
Xx. Xxxxxx continued, stating, "Throughout its history, CFBank has a
time-honored tradition of reinvesting in its community, a characteristic
shared by Farmers & Mechanics. Through the combined resources of both
companies, Farmers & Mechanics looks forward to maintaining this commitment
to give back to these communities which are the foundation of our success."
"F&M Bancorp represents an ideal merger partner for us," noted Xxxx X.
Xxxxxxxxx, Patapsco's president and chief executive officer. "Their
investment in products and technology will continue to support our high
standards for quality and competitive customer service. Our knowledge and
experience in our marketplace will also contribute to the success of this
merger. Teaming with F&M Bancorp enables us to capitalize on their
economies of scale and broad product array, bringing added value to our
customers and our shareholders."
F&M Bancorp expects to realize merger synergies by reducing the operating
expenses of the combined company as well as by increasing revenues through
sales opportunities in the attractive, contiguous Xxxxxx County market. The
combined organization is expected to offer growth potential through the
respective strengths of the merging banks in a variety of business lines
including retail banking services, commercial and small business lending,
mortgage banking, personal financial planning, brokerage, trust and
investment management services, and a full line of personal and business
insurance products. The transaction is expected to close in late 1999, or
early 2000, and is anticipated to be accretive to F&M Bancorp's earnings
per share by the end of 2000.
CFBank operates seven full-service community offices in Xxxxxx County, MD
and one in Baltimore County, MD. Subsidiaries include Founders Mortgage
Company, C&F Insurance Agency, Inc., and Central Maryland Service
Corporation, a data processing company. At June 30, 1999, Patapsco had
total assets of $174 million, deposits of $149 million and stockholders'
equity of $17 million.
F&M Bancorp had total assets of $1.462 billion at June 30, 1999. Its wholly
owned subsidiaries, Farmers & Mechanics National Bank, Frederick, MD, and
Home Federal Savings Bank, Hagerstown, MD, offer a wide variety of
traditional and non-traditional financial services including trust and
investment management, financial planning, brokerage, mortgage banking,
consumer and business electronic banking, and consumer and commercial
business insurance products through Xxxxxx-Xxxxxxxxxxx Insurance, Inc. and
Potomac Basin Group Associates, Inc.. The banks operate 44 full-service
community offices and 61 ATMs across central and western Maryland and
south-central Pennsylvania.
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This news release contains, among other things, certain forward-looking
statements regarding the combined company following the merger, including
statements relating to cost savings, enhanced revenue and accretion to
reported earnings that may be realized from the merger. Such
forward-looking statements involve certain risks and uncertainties,
including a variety of factors that may cause the combined company's actual
results to differ materially from the anticipated results or other
expectations expressed in such forward-looking statements. Factors that
might cause such a difference include, but are not limited to: (1) expected
cost savings from the merger may not be fully realized within the expected
time frame, if at all; (2) revenues following the merger may be lower than
expected, or deposit attrition, operating costs or customer loss and
business disruption following the merger may be greater than expected; (3)
competitive pressures among depository and other financial institutions may
increase significantly; (4) costs or difficulties related to the
integration of the business of the companies may be greater than expected;
(5) changes in the interest rate environment may reduce margins; (6)
general economic or business conditions, either nationally or in the states
or regions in which the companies do business, may be less favorable than
expected, resulting in, among other things, a deterioration in credit
quality or a reduced demand for credit; (7) legislative or regulatory
changes may adversely affect the businesses in which the companies are
engaged; and (8) changes may occur in the securities markets.
CONTACT: Media Representatives Analysts and Investors
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XXXX X. XXXXXX, President & CEO XXXXX X. XXXXXXX, Treasurer
F&M Bancorp F&M Bancorp
000-000-0000 000-000-0000
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