GASTONIA and HENDERSONVILLE, N.C., Feb. 17 /PRNewswire-FirstCall/
-- AB&T Financial Corporation, Gastonia, North Carolina
(OTC:ABTO) (BULLETIN BOARD: ABTO) , the parent company of Alliance
Bank & Trust Company, and 1st Financial Services Corporation,
Hendersonville, North Carolina (OTC: FFIS) (BULLETIN BOARD: FFIS) ,
the parent company of Mountain 1st Bank & Trust Company, today
jointly announced that they have entered into a definitive
agreement whereby AB&T Financial Corporation will merge with
and become part of 1st Financial Services Corporation. Under the
terms of the agreement, AB&T Financial Corporation shareholders
will exchange each of their approximately 2,678,205 shares of
common stock and 369,636 stock options for 1.175 1st Financial
Services Corporation common shares, and the approximately 369,636
stock options would be exchanged for options to purchase shares of
1st Financial common stock on the same basis. The merger is
designed to be a tax free exchange. Cash will be paid in lieu of
fractional shares. The transaction would have a total value of
approximately $17 million, based on the recent trading price for
1st Financial Services Corporation shares. The terms of exchange
represent pro forma ownership in the resulting combined institution
of approximately 37.8% and 62.2% for AB&T Financial Corporation
and 1st Financial Services Corporation shareholders, respectively,
on a diluted basis. Closing of the merger, which is expected to
occur in the second or third quarter of 2009, is subject to certain
conditions, including approval by the shareholders of both
companies and regulatory approval. Alliance Bank & Trust
Company, which opened in Gastonia, North Carolina in 2004, has
approximately $170 million in assets and $24.5 million in tangible
common equity and operates four North Carolina banking offices, in
Gastonia(2), Kings Mountain and Shelby. In announcing the
transaction, Dan Ayscue, Chief Executive Officer of AB&T
Financial Corporation, said, "We couldn't be more excited about
this partnership. Alliance Bank & Trust was founded to take
advantage of the economic growth emanating from North Carolina's
Charlotte/Mecklenburg market into surrounding communities such as
Gaston and Cleveland Counties. Over the last five years, Alliance
has put together a solid team of professional bankers which we
expect to remain in place after the combination, a loyal customer
base, and a very strong capital position. We believe that our
partnership with 1st Financial will provide us access to additional
capital, technology and expertise in the products and services that
we need to fully take advantage of the competitive opportunities in
our market. We also believe Mountain 1st's community bank culture
is extremely strong. It is important to us and the success of this
partnership that the leadership of both companies share a vision on
how best to serve our shareholders, customers, and employees. We
have a high degree of confidence in the Mountain 1st team to meld
our two organizations and continue building a great North Carolina
banking franchise." Greg Gibson, Chief Executive Officer of 1st
Financial Services Corporation, stated: "We believe a partnership
with AB&T Financial Corporation and their team is an
exceptionally good fit which brings a number of advantages to 1st
Financial and Mountain 1st because: -- Complementary Cultures: --
We believe that the corporate culture of the team at Alliance is
very similar to that of Mountain 1st. This culture drives the
customer service aspects of our business model and is largely
responsible for the growth of Mountain 1st over the past five
years. We believe the existing culture of the Alliance team will
fit well with that of Mountain 1st. -- Alliance Bank's Growth: --
Alliance Bank's growth in markets adjoining those of Mountain 1st
has already reached an initial point of critical mass so that we
believe the momentum for quality asset growth and profitability is
present. -- Enhanced Capital: -- AB&T's equity base will
increase our already strong capital level. Together our combined
approximate $880 million in assets will be supported by
approximately $71 million in tangible common equity and $20 million
in preferred equity. In the current economic environment, we
believe that a strong capital base is essential in maintaining a
strong bank and in maintaining the ability to continue to grow and
capitalize on opportunities presented in this environment. --
Enhanced Retail Network, Efficiencies and Additional Management
Strength and Depth: -- AB&T's operations nicely complement
Mountain 1st's North Carolina franchise, as we enter the Gaston
County market for the first time. The demographics of AB&T's
local markets are, on average, even better than some of our own
existing markets, and again, the fit of this partnership is
excellent in that the geography of the combined company's footprint
will be contiguous and efficiencies will exist with respect to
marketing and management. We believe Dan and his team will bring a
great deal of additional depth and talent to our existing
management team and look forward to working with them. After the
merger, 1st Financial will operate in eleven western North Carolina
counties and, at almost $900 million in assets, will be one of the
twenty largest independent banking companies headquartered in the
state." Gibson added, "At this level, we believe, the larger
company can achieve some significant operating efficiencies by
combining the two companies; we are expecting economies of
approximately 20% of AB&T's non-interest expenses. We also
expect to leverage AB&T's excess capital with good loans
relatively quickly and lower their cost on certain borrowed funds.
As a result, we expect the transaction to be accretive to 1st
Financial's common earnings per share in the first full year of
combined operations." AB&T will be merged into 1st Financial in
the transaction. Alliance Bank & Trust Company and Mountain 1st
Bank & Trust Company will continue to operate under independent
charters immediately following the transaction. AB&T Financial
Corporation is a one-bank holding company for Alliance Bank &
Trust Company. As of December 31, 2008, the Company had, on a
consolidated basis, approximately $170 million in assets, $140
million in loans, $121 million in deposits and $28 million in
stockholders' equity. AB&T Financial Corporation shares are
traded on the OTCBB under the symbol ABTO. 1st Financial Services
Corporation is the parent of Mountain 1st Bank & Trust Company.
Established in 2004, Mountain 1st is a North Carolina
state-chartered bank with fifteen offices in ten western North
Carolina counties. As of December 31, 2008, 1st Financial had, on a
consolidated basis, approximately $707 million in assets, $571
million in loans, $591 million in deposits and $63 million in
stockholders' equity. 1st Financial Services Corporation has
approximately 5 million outstanding shares, which are traded on the
OTCBB under the symbol FFIS. AB&T Financial Corporation is
being represented by FIG Partners, LLC as financial advisor and
Gaeta & Eveson, P.A. as legal counsel. 1st Financial Services
Corporation is being represented in the merger transaction by The
Carson Medlin Company as financial advisor and Ward and Smith, P.A.
as legal counsel. This joint press release contains
"forward-looking statements" (within the meaning of the Private
Securities Litigation Reform Act of 1995, including Section 21E of
the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933) about 1st Financial Services Corporation
("1st Financial"), AB&T Financial Corporation ("AB&T") and
the proposed merger of AB&T with 1st Financial. Those
statements include, but are not limited to: (1) statements about
the benefits of the proposed merger (including future financial and
operating results, cost savings, and enhanced revenues), (2)
statements regarding 1st Financial's and AB&T's plans,
objectives, expectations and intentions and other statements that
are not historical facts; and (3) other statements identified by
words such as "will," "believes," "expects," "anticipates,"
"estimates," "intends," "plans," "targets," "projects," "would be,"
"continues," and similar expressions. These statements are based
upon the current beliefs and expectations of 1st Financial's and
AB&T's management and they are subject to significant risks and
uncertainties. Actual or future results or events may differ from
those set forth in the forward-looking statements. The following
risks and other factors, among others, could cause actual results
or events to differ materially from the anticipated results, events
or other expectations expressed in the forward-looking statements:
(1) that the businesses of 1st Financial's and AB&T's will not
be integrated successfully or that the process of integrating their
businesses may be more difficult, time-consuming or costly than
expected; (2) that expected revenue synergies and cost savings from
the merger may not be fully realized or may not be realized within
the expected time frame; (3) that revenues following the merger may
be lower than expected; (4) that deposit attrition, operating
costs, customer loss and business disruption following the merger,
including without limitation, difficulties in maintaining
relationships with employees, may be greater than expected; (5)
that required governmental approvals of the merger will not be
obtained on its proposed terms and schedule; (6) that 1st
Financial's and AB&T's stockholders will not approve the
merger; (7) that competitive pressures among depository and other
financial institutions may increase significantly and have an
effect on pricing, spending, third-party relationships and
revenues; (8) that the strength of the United States economy in
general, and of the local economies in which the combined company
will operate, may be different than expected, which could result
in, among other things, a deterioration in credit quality or a
reduced demand for credit and have a negative effect on the loan
portfolio and allowance for loan losses of the combined bank; (9)
that there will be changes in the U.S. legal and regulatory
framework; and (10) that there will be adverse conditions in the
stock market, the public debt market and other capital markets
(including changes in interest rate conditions) which would
negatively affect the combined bank's business and operating
results. Additional factors that could cause 1st Financial's and
AB&T's results to differ materially from those described in the
forward-looking statements can be found in reports (such as Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed by 1st Financial and AB&T with the
Securities and Exchange Commission. All subsequent written and oral
forward-looking statements concerning the proposed merger or other
matters attributable to 1st Financial and AB&T or any person
acting on their behalf are expressly qualified in their entirety by
the cautionary statements above. 1st Financial and AB&T do not
undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the
forward-looking statements are made. The proposed merger will be
submitted to the shareholders of 1st Financial and AB&T for
their consideration and approval. 1st Financial will file a
registration statement, a prospectus (which will be combined with
1st Financial's and AB&T's joint proxy statements) and other
related documents with the SEC concerning the proposed merger. The
joint proxy statement/prospectus and other relevant materials, as
well as any amendments or supplements to those documents and any
other filings containing information about 1st Financial or
AB&T, will contain important information, and 1st Financial's
and AB&T's shareholders are urged to read those documents when
they become available and before making any voting or investment
decision with respect to the proposed merger. You will be able to
obtain a free copy of the joint proxy statement/prospectus and
other relevant materials (when they become available), and any
other documents filed by 1st Financial and/or AB&T at the SEC's
Internet site (http://www.sec.gov/). In addition, you may obtain
copies of the joint proxy statement/prospectus, any SEC filings
that will be incorporated by reference in the joint proxy
statement/prospectus, and any other documents filed with the SEC by
1st Financial, without charge, by directing a request to the Chief
Financial Officer, 1st Financial Services Corporation, 101 Jack
Street, Hendersonville, N.C. 28792, telephone (828) 697-3100. You
may obtain copies of any documents filed with the SEC by AB&T,
without charge, by directing a request to the President, AB&T
Financial Corporation, 292 West Main Avenue, Gastonia, N.C., 28052,
telephone 704-867-5828. 1st Financial and AB&T, and their
respective directors and executive officers, may be deemed to be
participants in the solicitation of proxies from the stockholders
of 1st Financial and AB&T in favor of the proposed merger.
Information about 1st Financial's and AB&T's directors and
executive officers and their respective ownership of 1st
Financial's and AB&T's capital stock is contained in the proxy
statement that will be distributed by 1st Financial and AB&T in
connection with the merger, which will be filed with the SEC.
Additional information regarding the interests of those
participants in the proposed merger may be obtained by reading the
joint proxy statement/prospectus regarding the merger when it
becomes available. This press release does not constitute an offer
TO SELL any securities. Any offer will be made only by the joint
proxy statement/prospectus. DATASOURCE: AB&T Financial
Corporation; 1st Financial Services Corporation CONTACT: Gregory L.
Gibson, CEO, 1st Financial Services Corporation, +1-828-697-3100, ;
or Daniel C. Ayscue, CEO, AB&T Financial Corporation,
+1-704-867-5828,
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