From the July day FNB Corp. in Christiansburg, Va., announced that it intended to merge with Virginia Financial Group Inc. in Culpeper, the plan was controversial, and for some it was emotional.
In the nearly seven months since then, the controversy and the emotion have only intensified, setting the stage for a shareholder vote this week that was as contentious as expected.
The fact that deal opponents took extra steps like setting up the equivalent of a lobbying stand outside the meeting and placing "Vote Against" banners over the entrance only added to the atmosphere.
But that didn't mean there were no surprises.
In the end, the meeting, which began Tuesday afternoon, had to be extended to the next day, in an effort to give the critics a fair hearing and correctly count the votes.
The critics came closer to winning than dissidents usually do.
Kendall Clay, one of three FNB directors who opposed the deal and helped organize a group of dissenting shareholders, said that the margin was narrow, with 50.3% of the votes cast in favor of the deal.
William Heath, FNB's president and chief executive officer, said in an interview Thursday that he was "elated" with the outcome of the shareholder vote.
"But I'm a realist, and I know that the hard work is just beginning," he said. "We have to execute now to deliver the shareholder value we've talked about the past year."
Mr. Heath said that 83% of the company's outstanding shares were accounted for in the vote, and the vote was 50.3% in favor to 32.4% opposed.
He said that the vote-counting took two days because the opponents did not give the inspector of elections their green opposition proxy votes until "the eleventh hour."
"He had to work through all the green cards to understand what he had," Mr. Heath said.
The two companies framed the deal as a "merger of equals" that would form a $3 billion-asset banking company, the largest headquartered in Virginia.
But the deal's opponents — who called themselves the FNB Corp. Shareholders Committee — argued that their company was actually being acquired for little premium.
The agreement calls for each FNB share to be exchanged for 1.585 share of Virginia Financial common stock.
When the all-stock deal was announced in July, the price worked out to $240 million, or $32.43 a share. But Virginia Financial's share price has since dropped about 24%.
Still, two independent proxy advisory firms last week recommended that shareholders vote for the merger, and analysts say the combination would make for a stronger company with more earnings potential.
Mark Muth, an analyst at First Horizon National Corp.'s FTN Midwest Research Securities Corp., said the strong opposition to the merger and the two-day shareholder meeting were unusual.
"It seems to be a lot of small-town, emotional politics involved," he said.
Mr. Muth said the meeting had to be recessed to a second day primarily to tally votes, which included some duplicates.
"I was told people showed up with shoe boxes filled with proxy cards and just dumped them out on the table," he said.
Kenneth Bowling, a local businessman and an FNB shareholder who opposed the deal, said the opposition was so impassioned partly because many people have owned stock in the company for generations.
"Passed down father to son," he said. "Little old ladies that are holding 140,000 shares."
Mr. Bowling said roughly 300 people attended the meeting, and about 20 of them spoke, most in opposition to the deal.
One after another, they took the microphone to complain about the two companies' plan to come up with a new name after the deal closes and have the headquarters in Charlottesville, Va.
"When you lose your name, you lose your identity," Mr. Bowling said he told those at the meeting, reading from a prepared statement.
"Make no mistake, the new bank's philosophy, its vision, its policies and procedures, and the final authority will come from Charlottesville," he said.
Mr. Clay said that FNB management had braced for a raucous crowd, even hiring a few security guards, but that the meeting was orderly.
"It was very subdued," he said. "I've been to funerals that were more joyful."
Stephen M. Moss, an analyst at Janney Montgomery Scott LLC, said it was "definitely quite rare" to see such strong shareholder opposition.
"We've seen a trend in increased shareholder activism toward poorly performing companies," Mr. Moss said, "but rarely with regard to mergers."
He speculated that the dissident FNB shareholders may have risen up because the merger and acquisition activity in recent years has produced "eye-popping premiums, and a lot of shareholders were expecting eye-popping premiums, and they didn't get it."
Mr. Bowling, who has been a member of the company's Radford branch advisory board for decades, said he plans to resign.
"I have my resignation typed. I may deliver it this afternoon," he said.
