Premier Financial Bancorp Inc. in Huntington, W.Va., has agreed to buy the struggling Abigail Adams National Bancorp Inc. in Washington for $10.9 million in stock.
The acquisition would unite a pair of companies that already have strong ties. Marshall Reynolds, a Huntington businessman, is a director at and the largest shareholder of both the $732 million-asset Premier and Abigail Adams. The relationship between the two companies has gotten cozier since Jeanne Delaney Hubbard resigned as Abigail Adams' chairman, president, and chief executive officer in September and was replaced by Premier's president and CEO, Robert W. Walker.
Abigail Adams is the parent company of the $344 million-asset Adams National Bank in Washington — which has suffered from credit-quality trouble lately — and the $92 million-asset Consolidated Bank and Trust in Richmond, Va.
Adams National Bank said in October that an agreement with the Office of the Comptroller of the Currency required it to boost capital, assess its senior management team, and improve the monitoring of its loans, among other things.
In the third quarter the bank swung to a loss of $2.7 million, from a profit of $729,000 a year earlier, as its nonperforming loan ratio surged to 5%, according to Federal Deposit Insurance Corp. data. It also slipped below well-capitalized status, with a total risk-based capital ratio of 9.61%, the FDIC data indicates.
Premier, which operates seven banks in three states, did not specify whether Abigail Adams' two banking units would retain their names.
But Mr. Walker said in a press release that his company is confident it can revitalize Abigail Adams' operations.
"We certainly have a history of successfully working through formal regulatory agreements, reorganizing managerial structures and systems, and returning banking franchises to profitability," Mr. Walker said.
The deal was announced Dec. 31 and is expected to close in the first half of this year.
Abigail Adams' shares rose 24% Friday on news of the deal, to close at $3.12. Premier's shares closed at $7.70, up 9.5%
