Virginia National Bankshares Inc., the state's second-largest banking company, emerged yesterday as the apparent victor out of a field of suitors for New Virginia Bancorporation.
New Virginia, a profitable Northern Virginia bank holding company, last week announced its willingness to listen to offers.
The chairmen of both institutions said yesterday that the companies had reached agreement in principle to merge. Under the terms of the agreement, Virginia National will pay $20 a share for New Virginia's 1,475,651 shares of outstanding common stock -- more than double the prices at which the banking company's stock had been trading before it became apparent that a merger was probable.
Over-the-counter trading of New Virginia stock was halted last Friday after an announcement by New Virginia that First Virginia Banks Inc. had put forward a formal proposal for merger. New Virginia had announced earlier last week that it was forming a committee of its board of directors to consider any offers that might come its way.
On Friday, First American Bank of Virginia sent New Virginia another proposal. While the bank holding company was receiving those proposals, it was already involved in discussions with Virginia National.
"Once the word is out that a profitable bank holding company in Northern Virginia -- one of the most profitable areas in the country -- is interested in merger, suitors just come out of the woodwork," said one area bank industry analyst who asked not to be named.
The proposed merger gives Virginia National Bankshares, which has its headquarters in Norfolk, a strong Northern Virginia base. Virginia National has $2.8 billion in assets and 166 offices, including 30 in Northern Virginia. New Virginia has assets of $219.676 million and 15 offices in Northern Virginia and the area around Newport News.
"We have, for some time, explored ways of expanding our service capabilities in the Northern Virginia and Newport News areas, and this proposed merger provides us that opportunity," said C.A. Cutchins III, chairman of Virginia National.