Aug 20 - Essex Bank, the banking subsidiary of Community Bankers Trust Corporation (Nasdaq: ESXB), has entered into an agreement to sell its four Georgia branch offices and approximately $192 million of related deposits to Community & Southern Bank, a community bank with 34 banking offices in metropolitan Atlanta and across Georgia's northern, eastern and western counties. The bank will not sell any loans to CSB. The transaction is expected to close in the fourth quarter of 2013, subject to regulatory approval and other customary terms and conditions.
Under the terms of the purchase and assumption agreement, Essex Bank will sell the four branch offices and their fixtures and furnishings to CSB at a price of approximately $5.2 million, which represents a slight discount to the net book value of those assets. It will also sell the deposits at a premium of 1.33 percent. This premium is subject to a good faith renegotiation in the event that the amount of deposits to be sold decreases by $10 million prior to the closing of the transaction.
Rex L. Smith III, president and CEO of Community Bankers Trust Corporation and Essex Bank, stated, "We are excited about this opportunity and the benefits that it will have for all parties. We acquired the Georgia franchise from the Federal Deposit Insurance Corporation in 2008 when having appropriate amounts of liquidity and core deposits was critical to our business goals at that time. Our strategies, however, have changed over the years, and this divestiture is in line with our long-term plan and allows us to focus solely on what has become our core banking franchises in the Virginia and Maryland markets."
Smith continued, "We have been very pleased over the past five years with our Georgia operations, as the employees there have been dedicated and have provided the highest level of customer service. We are proud to have CSB as the purchaser, as it has a similar strong commitment to customer service and, as a Georgia-based bank, will be able to provide much greater support, resources and focus for the customers and employees there. We will be working closely with CSB to make this transition as smooth as possible for everyone."
Essex Bank does not expect to record a material gain or loss in connection with the transaction in 2013. The sale of the Georgia branches and deposits is expected to result in annual net cost savings of $1.2 million for the bank, which will include the elimination of the amortization of the core deposit intangibles associated with the Georgia franchise.
The four branches will operate normally through completion of the transaction, and customers do not need to take any action. Essex Bank and CSB will contact all customers as they coordinate a smooth branch transfer.
SunTrust Robinson Humphrey, Atlanta, served as the investment bank for Essex Bank in connection with the transaction.
About Community Bankers Trust Corporation and Essex Bank
Community Bankers Trust Corporation is the holding company for Essex Bank, a Virginia state bank with 23 full-service offices, 13 of which are in Virginia, six of which are in Maryland and four of which are in Georgia. The bank also operates two loan production offices in Virginia. The bank closed its branch office in Clinton, Md., on Aug. 16, 2013, and plans to open a new branch office in Annapolis, Md., in the first quarter of 2014.Additional information on the bank is available on the bank's website at www.essexbank.com. For information on Community Bankers Trust Corporation, please visit its website at www.cbtrustcorp.com.