CHARLESTON, W. Va. -- One Valley Bancorp of West Virginia said it agreed to buy Mountaineer Bankshares in a stock swap valued at about $130 million.
The deal, which One Valley said will make it the state's biggest bank in assets and deposit share, is valued at a hefty 2.06 times Mountaineer's book value. The price reflects the fervid takeover activity characterizing West Virginia banking.
In recent months, powerful Ohio companies have been moving in.
Banc One Corp. bought Key Centurion Bancshares, the state's largest independent bank.
Huntington Bancshares bought CB&T Financial Corp. last year and is waiting to close on its purchase of Commerce Bank Corp., which has $894 million of assets in west-central West Virginia.
The purchase prices hovered around twice book value.
No Other Talks Held
A spokesman for Charleston-based One Valley quoted Mountaineer chief executive Lacy I. Rice Jr. as saying that the Martinsburg-based holding company had not negotiated with any other potential suitors.
Mountaineer has $738 million of assets, $604 million of deposits, and loans of $323 million. One Valley will have total assets of about $3.5 billion when the deal closes.
The merger, which is based on a fixed exchange ratio, will be accounted for as a pooling of interests.
Mountaineer's stock soared 14.6%, or $5.25 a share, to $41.25 on Thursday. One Valley's shares fell 75 cents to $29.
Both Strong Earners
One Valley estimated it will shave at least 22% of Mountaineer's operating expenses through merger efficiencies. It said it has identified at least four market areas where the companies have overlapping branches.
Both companies have been strong earners. In the first six months of the year, Mountaineer reported a profit of $4.5 million, for a return on assets of 1.22%. One Valley netted $16 million in the same period, up 12.1% from the first six months of 1992, for a return on average assets of 1.19%.
Mountaineer, which granted One Valley a lock-up option to purchase up to 19.9% of its outstanding common shares, operates 23 offices in eight counties in northern West Virginia and in the panhandle regions of the state.
Mr. Rice, Mountaineer's chairman, will be named vice chairman of One Valley. Brent D. Robinson, chief operating officer and chief financial officer of Mountaineer, will assume the title of executive vice president of One Valley Bancorp with direct responsibilities for achieving timely and effective integration of the merger.
J. Holmes Morrison, president and chief executive of One Valley, will retain his position.
The transaction, which is subject to approval by regulators and by stockholders of both companies, is expected to be completed during the first quarter of 1994.
Merrill Lynch & Co. represented One Valley and McDonald & Co. represented Mountaineer.West Virginia DealAt a Glance One Valley MountaineerAssets $2.7 $738 billion millionOffices 57 23Employees 1,600 400Profits(*) $16 $4.5 million millionROA(*) 1.19% 1.22%Indicatedpurchase $130 millionpriceMultiple ofbook value 2.06(*) First half of 1993