Bank of McKenney and CCB Bankshares, Inc. Announce Strategic Merger

The combined bank will be headquartered in Prince George County, Virginia, with 13 full-service offices and 1 loan production office across Chesterfield, Dinwiddie, Prince George, Brunswick and Mecklenburg counties in Virginia, and Franklin, Halifax and Vance counties in North Carolina. The combined management team will work together to rename the bank upon completion of the transaction and position the go-forward branding strategy.

The merger creates a larger and stronger institution with a significantly higher lending limit, expanded product offering and access to new markets. Both management teams anticipate that such enhanced scale and efficiency will create meaningful opportunities to drive further growth, profitability and long term value creation for employees, customers and shareholders.

Richard M. Liles, President and Chief Executive Officer of McKenney, said, "We are excited about our merger with CCB. The transaction will double the size of the bank and increase our legal lending limit. Our combined presence, coupled with our shared commitment to providing premier service, uniquely positions our franchise to grow as the community bank of choice in the markets we serve. We believe that the merger will also provide significant financial benefits for our shareholders."

James R. Black, President and Chief Executive Officer of CCB, remarked, "This is a tremendous opportunity to have our neighboring community banks with similar cultures and philosophies join together in this transformational merger. We have a strong team of experienced personnel throughout the organization and I am honored and proud to lead us in this new endeavor. Together, we will leverage our resources for the benefit of all stakeholders and are committed more than ever to our community bank strategy." 

Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both entities, CCB shareholders will receive a fixed exchange ratio of 0.935 of McKenney shares in exchange for each share of CCB common stock. Based on the closing price of McKenney common stock on June 27, 2017, the transaction represents a value of $12.52 per share of CCB common stock, or $19.0 million in aggregate.  McKenney shareholders will own 57.6 percent of the combined entity and CCB shareholders will own 42.4 percent. The all-stock transaction is intended to qualify as a tax-free reorganization for CCB shareholders. 

The transaction is expected to be immediately accretive to earnings per share, with a tangible book value dilution payback of approximately 3 years. Further, it is anticipated that the combined bank's pro forma capital ratios will exceed regulatory well-capitalized guidelines.

Following completion of the transaction, James R. Black will serve as President and Chief Executive Officer and a member of the Board of Directors while Mr. Liles will serve as Executive Chairman. The combined bank Board of Directors will reflect the pro forma ownership of the respective institutions with 8 members from McKenney, including Mr. Liles who will become Chairman, and 6 members from CCB, including Norman D. Wagstaff, Jr. who will become Vice Chairman. W.D. Allen, III, current Chairman of McKenney, will remain on the Board following the merger.

The transaction is expected to be completed in the fourth quarter of 2017, subject to approval of both entities' shareholders, regulatory approvals and other customary closing conditions. 

Sandler O'Neill + Partners, L.P. served as McKenney's financial advisor and Williams Mullen served as McKenney's legal counsel. FIG Partners, LLC served as CCB's financial advisor and LeClairRyan served as CCB's legal counsel.

About Bank of McKenney.
Bank of McKenney is a full-service community bank headquartered in McKenney, Virginia with seven branches serving southeastern Virginia. The bank has been dedicated to serving its communities for over 100 years and offers a full suite of banking services to individuals and businesses. For more information and additional financial data, please visit www.bankofmckenney.com.

About CCB Bankshares, Inc.
CCB Bankshares, Inc. is a Virginia state chartered bank holding company headquartered in South Hill, Virginia and parent company to Citizens Community Bank. It operates six branches, three in southcentral Virginia and three in northern North Carolina, as well as a loan production office in Clarksville, Virginia. For more information and additional financial data, please visit www.myccb.bank.

Additional Information and Where to Find It
In connection with the proposed merger, McKenney and CCB will each deliver a definitive joint proxy statement/prospectus to their respective shareholders seeking approval of the merger and related matters. Investors and shareholders of both companies are urged to read the definitive joint proxy statement/prospectus when it becomes available because it will contain important information about McKenney, CCB and the proposed transaction.  Free copies of the definitive joint proxy statement/prospectus, when available, may be obtained by directing a request by telephone or mail to Bank of McKenney, P.O. Box 370, McKenney, Virginia 23872, (804) 478-4484, or by accessing the document at McKenney's website: http://www.bankofmckenney.com under "Investor Relations", or CCB Bankshares, Inc., 800 North Mecklenburg Avenue, South Hill, Virginia 23970, (434) 447-2265, or by accessing the document at CCB's website: https://www.myccb.bank under "Investor Relations." The information on McKenney's and CCB's websites is not, and shall not be deemed to be, a part of this release.

Forward-Looking Statements
Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current expectations and involve a number of assumptions. These include statements as to the anticipated benefits of the merger, including future financial and operating results, cost savings and enhanced revenues that may be realized from the merger as well as other statements of expectations regarding the merger and any other statements regarding future results or expectations. Each of McKenney and CCB intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. The companies' respective abilities to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material effect on the operations and future prospects of each of McKenney and CCB, and the resulting company, include but are not limited to: the businesses of McKenney and CCB may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected timeframe; revenues following the merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the merger; the ability to obtain required regulatory and shareholder approvals, and the ability to complete the merger on the expected timeframe may be more difficult, time-consuming or costly than expected; changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve; the quality and composition of the loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the companies' respective market areas; the companies' respective implementation of new technologies and their ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; and changes in accounting principles, policies and guidelines. McKenney and CCB undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Bank of McKenney

Related Links

http://www.bankofmckenney.com