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Area banks announce merger plan
Tuesday, August 26, 2014
By MICKEY POWELL - Bulletin Staff Writer
Martinsville-based MainStreet BankShares Inc. and Danville-based American National Bankshares Inc. announced Monday they plan to merge effective in January, pending approval by regulators and MainStreet shareholders.
MainStreet owns and operates Franklin Community Bank, which has banks in Rocky Mount, Hardy and Union Hall. Although the firm is based in Martinsville, it does not have any banks in the city or Henry County.
Seventeen people work at MainStreet’s local headquarters, which will close if the merger occurs, said company President and CEO Brenda Smith. She said it is possible that affected workers could be offered vacant jobs with American National if any exist around the time of the merger.
If not, laid-off employees could be considered for future American National vacancies, Smith said in a phone interview.
As part of the merger, the MainStreet name would cease to exist as the company is folded into American National, she said.
American National has 24 banks, including ones in Martinsville and Collinsville and near Ridgeway, as well as elsewhere in southern and central Virginia and north central North Carolina, a map on the company’s website shows.
The merger, valued at about $24.2 million, would enable American National to move into the Roanoke metropolitan region. If it is finalized, the company would have a total of about $1.5 billion in assets, the release stated.
Smith said the merger would benefit Franklin Community Bank customers because American National, as a larger bank, offers more banking products and services.
The quality of customer service will not decline, she indicated, noting that American National and Franklin Community Bank are similar in their cultures, corporate characters and commitments to their communities.
The merger stems from a desire by the companies for “economies of scale” amid changing market conditions and regulatory burdens, Smith said.
She did not know which company originally approached the other, she said.
“We’ve known American National for a long time, and we’ve known their people for a long time,” and talks began at some point, she said.
Under terms of the merger agreement, shareholders of MainStreet common stock would receive 0.482 shares of American National common stock and $3.46 in cash for each share of MainStreet they own, the release stated.
As of the close of business Friday, the per share acquisition price was about $14.05, or about 97 percent of MainStreet’s June 30, 2014, book value per share, according to the release.
The per share acquisition price will fluctuate with the value of American National common stock.
MainStreet shareholders would own roughly 10 percent of the combined company if the merger occurs, the release continued.
American National has proposed that MainStreet’s board chairman, Joel Shepherd, be added to American National’s board upon the merger being completed, the release added.