First United plans to buy Myersville bank company Takeover battle also involved FCNB

March 12, 1993|By David Conn | David Conn,Staff Writer

A curious battle over a small Frederick County bank appears to have reached a resolution with the announcement yesterday that an Oakland-based company intends to buy Hometown Bancorp of Myersville.

First United Corp., the parent of First United National Bank & Trust, said it had signed a letter of intent to negotiate and complete a deal to buy Hometown, whose subsidiary, Myersville Bank, has three branches in Frederick and $55 million in assets. The company earned $697,000 last year.

First United, with 18 branches and $361.5 million in assets, has proposed to pay 7.75 to eight shares of its stock for each of the 45,000 outstanding shares of Hometown, which is a public company. Hometown's stock, however, has been removed from the listings of all securities exchanges.

At current prices, the deal would be worth $12.7 million, the companies said, or about $282 a share. Approval from federal and state regulators and from shareholders would be required.

Hometown officials couldn't be reached for comment yesterday, but they have been waging a public fight since the fall to stave off what they perceived as a hostile takeover attempt by FCNB Corp., the parent of Frederick County National Bank.

NTC FCNB, which holds 4.9 percent of Hometown, wanted to buy up to 14.9 percent of the company's shares at about $120 a share. But Hometown, calling FCNB's strategy a "creeping tender offer," unsuccessfully sought to get the Federal Reserve Board to block the stock purchase.

In a November petition to the board, Hometown cited its customers' concerns -- including "the loss of intimacy associated with a smaller community bank" -- as well as those of management, namely a restriction of "Hometown's ability to provide the personalized services which can only be determined and performed by a local, hands-on management team with firsthand knowledge of the community."

FCNB denies it ever tried to take over the company.

"It looks to me like the ownership is going to be moving a heck of a lotfurther away than Frederick," said A. Patrick Linton, president and chief executive of FCNB Corp. He said FCNB never offered to buy Hometown and never did buy the extra shares.

Is First United playing white knight, riding to Hometown's rescue? "I suppose that's what you'd call it," Mr. Linton said. "I don't know why we were a black knight, if that was the case."

"I don't know that that was necessarily the case," Robert Kurtz,First United's treasurer, said of the white knight scenario. Rather, he said, the deal evolved out of talks between his company's president and Terry Reiber, president of Hometown.

Myersville Bank will retain its name and operate as an independent subsidiary, and there are no plans for layoffs, Mr. Kurtz said.

He acknowledged that the proposed deal would leave Hometown's shareholders with 17 percent of the combined company, even though their bank will contribute only 12.4 percent of the combined assets.

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