CHARLESTON, W.Va. and FRONT ROYAL, Va., Nov. 14, 2011 /PRNewswire/ -- City Holding Company ("City") (NASDAQ: CHCO) and Virginia Savings Bancorp, Inc. ("VSB") announced today the execution of a definitive merger agreement for City to acquire VSB and its wholly owned subsidiary, Virginia Savings Bank (the "Merger"). Virginia Savings Bank operates five branches in the northwest portion of Virginia. The acquisition will expand City's branch network from the Eastern Panhandle of West Virginia into northwestern Virginia.
City and VSB anticipate that the transaction will be completed in the first quarter of 2012, pending regulatory approvals, the approval of VSB shareholders, and completion of other customary closing conditions. The directors of VSB have agreed to vote their shares in favor of the merger.
Michael Funk, President of VSB and Virginia Savings Bank, said "Virginia Savings Bank has a long and proud commitment of service to the communities of Front Royal, Woodstock, Strasburg and Winchester, Virginia. City National Bank is a larger community bank that shares our commitment to customers and is highly respected as a well-run bank. Bank Director Magazine rated City as the #3 best performing bank in the U.S. in 2010. Our shareholders will benefit from City's financial strength, and our customers will benefit from enhancements to products and services that a larger bank can offer. We are excited about combining our business with City National."
Charles R. (Skip) Hageboeck, President of City and City National Bank, said "Virginia Savings Bank has strong roots in the community, and our community banking model is a perfect fit. We look forward to building upon VSB's tradition of strong customer service and community involvement, while bringing additional products and services to both retail and business customers in VSB's Virginia markets. Seven of our current 68 branches are in the Eastern Panhandle of West Virginia, which is adjacent to the Virginia Savings Bank region. We have been interested in expanding into Virginia for several years and believe that the acquisition of VSB is a perfect first step for us. This is a high-growth region, and we are excited to add Virginia to our service area."Subject to certain parameters and under the terms of the agreement, a shareholder of VSB will receive, at the election of such holder, one of the following forms of consideration: (i) 0.2297 shares of City common stock or (ii) $6.75 in cash or (iii) 0.1263 shares of City common stock and $3.04 in cash for each share of VSB common stock and each share of Series A Non-Voting preferred stock owned by him or her. All shareholder elections will be subject to allocation and proration procedures set forth in the merger agreement which is intended to ensure that, in the aggregate, 55% of the VSB common shares outstanding will be exchanged for City common stock. The total transaction value is estimated at approximately $13.4 million. Janney Montgomery Scott LLC served as financial advisor to City. Scott & Stringfellow served as financial advisor to VSB. Jackson Kelly PLLC served as legal advisor to City. LeClairRyan served as legal advisor to VSB.