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Section 1: 8-K (FORM 8-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 8-K

  

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 21, 2017

  

 

Eastern Virginia Bankshares, Inc.

(Exact name of registrant as specified in its charter)

  

 

Virginia   000-23565   54-1866052

(State or other jurisdiction

of incorporation) 

 

(Commission

File Number) 

 

(IRS Employer

Identification No.) 

 

10900 Nuckols Road, Suite 325, Glen Allen, Virginia   23060
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (804) 443-8400

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

Item 2.01Completion of Acquisition or Disposition of Assets.

 

Effective June 23, 2017, Eastern Virginia Bankshares, Inc., a Virginia corporation (“EVBS”) completed its previously announced merger (the “Merger”) with Southern National Bancorp of Virginia, Inc., a Virginia corporation (“SONA” or the “Continuing Corporation”), pursuant to an Agreement and Plan of Merger, dated December 13, 2016, as amended, between EVBS and SONA, including the related Plan of Merger (together, the “Merger Agreement”). Pursuant to the Merger Agreement, at the effective time of the Merger, EVBS merged with and into SONA, with SONA surviving as the continuing corporation and immediately following the Merger, EVB, a Virginia banking corporation and EVBS’s wholly-owned subsidiary, merged with and into SONA’s wholly-owned subsidiary, Sonabank, a Virginia banking corporation, with Sonabank surviving and continuing its corporate existence under the name “Sonabank.”

 

Pursuant to the Merger Agreement, holders of EVBS common stock received 0.6313 shares (the “Exchange Ratio”) of SONA common stock for each outstanding share of EVBS common stock held immediately prior to the effective time of the Merger and holders of Non-Voting Mandatorily Convertible Non-Cumulative Preferred Stock, Series B of EVBS (the “EVBS Series B Preferred Stock”) received 0.6313 shares of SONA common stock for each share of EVBS Series B Preferred Stock held immediately prior to the effective time of the Merger (collectively, the “Merger Consideration”). Each share of SONA common stock outstanding immediately prior to the Merger remained outstanding and was unaffected by the Merger.

 

Immediately prior to the effective time of the Merger, each option to purchase shares of EVBS common stock granted under an EVBS stock plan vested and was converted into and became an option to purchase shares of common stock of the Continuing Corporation (each, an “Assumed Option”), which was adjusted (i) by multiplying the number of shares of common stock that could be purchased under the Assumed Option by the Exchange Ratio and rounding down to the nearest share and (ii) by dividing the per share exercise price of the option by the Exchange Ratio and rounding up to the nearest cent. The Continuing Corporation assumed each Assumed Option in accordance with the terms of the EVBS stock plan and award agreement by which it is evidenced.

 

Immediately prior to the effective time of the Merger, each share of EVBS common stock subject to time-based or performance-based vesting restrictions granted under an EVBS stock plan vested in full and automatically converted into unrestricted shares of common stock of the Continuing Corporation, less the amount of any required withholding tax, based on the Exchange Ratio. In addition, the Continuing Corporation assumed the EVBS stock plans at the effective time of the Merger, only with respect to the Assumed Options.

 

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is included as Exhibits 2.2, 2.2.1, and 2.2.2, collectively, to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 3.01Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

In connection with the closing of the Merger, EVBS notified The NASDAQ Stock Market (“NASDAQ”) on June 23, 2017 that, at the effective time of the Merger, each share of EVBS's common stock issued and outstanding immediately prior to such time, was automatically cancelled and converted into the right to receive the Merger Consideration. On June 23, 2017, EVBS requested that NASDAQ suspend trading in EVBS’s common stock and promptly file with the Securities and Exchange Commission (the “SEC”) a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 25 to delist and deregister shares of EVBS’s common stock. Accordingly, trading in EVBS’s common stock on NASDAQ was suspended prior to the commencement of trading on June 26, 2017. Following the effectiveness of such Form 25, the Continuing Corporation, as successor to EVBS, intends to file with the SEC a certification on Form 15 under the Exchange Act requesting that shares of EVBS's common stock be deregistered and that EVBS’s reporting obligations under Sections 13 and 15(d) of the Exchange Act be suspended.

 

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Item 3.03Material Modification to Rights of Security Holders.

 

The disclosure set forth under Items 2.01 and 3.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.

 

Item 5.01Changes in Control of Registrant.

 

The disclosure set forth under Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

 

On June 23, 2017, pursuant to the terms of the Merger Agreement, SONA completed the acquisition of EVBS through the merger of EVBS with and into SONA, with SONA continuing as the Continuing Corporation. As a result of the Merger, each share of EVBS’s common stock and each share of the EVBS Series B Preferred Stock issued and outstanding immediately prior to such time was automatically cancelled and converted into the right to receive the Merger Consideration. The aggregate amount paid by SONA for the Merger Consideration was approximately 11.6 million shares of SONA common stock, which had a value of approximately $198.8 million based on the closing price of SONA common stock on June 23, 2017.

 

On June 23, 2017, at the effective time of the Merger and in accordance with the terms of the Merger Agreement, five former EVBS directors, John F. Biagas, W. Rand Cook, F.L. Garrett, III, Eric A. Johnson and Joe A. Shearin, were appointed to the board of directors of SONA and J. Mikesell Thomas was designated as an observer to the board of directors of SONA.

 

Item 5.07Submission of Matters to a Vote of Security Holders.

 

On June 21, 2017, EVBS held a special meeting of shareholders (the “Special Meeting”) in Fairfax, Virginia. At the Special Meeting, the shareholders of EVBS were asked to consider and vote on the following proposals: (1) to approve the Merger Agreement, pursuant to which EVBS would merge with and into SONA (the “Merger Proposal”), (2) to approve, in a non-binding advisory vote, certain compensation that may become payable to EVBS’s named executive officers in connection with the Merger (the “Compensation Proposal”), and (3) to adjourn the Special Meeting, if necessary or appropriate, to permit further solicitation of proxies in the event there are not sufficient votes at the time of the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal”). At the Special Meeting, the Merger Proposal was approved by the affirmative vote of a majority of the outstanding shares of EVBS common stock entitled to vote at the Special Meeting and the Compensation Proposal was approved by the affirmative vote of a majority of the outstanding shares of EVBS common stock voted on the proposal.

 

As of April 24, 2017, the record date for the Special Meeting, there were 13,117,393 shares of EVBS common stock issued and outstanding and eligible to be voted at the Special Meeting. At the Special Meeting, there were present in person or by proxy 9,481,816 shares of EVBS’s common stock, which constituted a quorum to conduct business at the Special Meeting.

 

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The items voted upon at the Special Meeting and the final voting results for each proposal were as follows:

 

  1. The Merger Proposal.

 

For   Against   Abstain   Broker Non-Votes
9,303,004   127,774   51,037   0

 

  2. The Compensation Proposal.

 

For   Against   Abstain   Broker Non-Votes
8,959,040   422,054   100,722   0

 

  3. The Adjournment Proposal.

 

The Adjournment Proposal was withdrawn, as it was not necessary due to the approval by EVBS’s shareholders of the Merger Proposal.

 

Item 7.01Regulation FD Disclosure.

 

On June 23, 2017, EVBS and SONA issued a joint press release announcing the closing of the Merger. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated by reference herein.

 

Item 9.01Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
2.2   Agreement and Plan of Merger, dated as of December 13, 2016, between Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. (incorporated by reference to Exhibit 2.2 to EVBS’s Current Report on Form 8-K filed December 14, 2016).
     
2.2.1   Amendment to Agreement and Plan of Merger, dated as of March 8, 2017, between Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. (incorporated by reference to Exhibit 2.1 to EVBS’s Current Report on Form 8-K filed March 9, 2017).
     
2.2.2   Amendment No. 2 to Agreement and Plan of Merger, dated as of April 5, 2017, between Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. (incorporated by reference to Exhibit 2.1 to EVBS’s Current Report on Form 8-K filed April 5, 2017).
     
99.1   Joint Press Release of Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc., dated June 23, 2017.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
  (as successor to Eastern Virginia Bankshares, Inc.)
     
     
Date:  June 26, 2017                      By:  /s/ J. Adam Sothen
    J. Adam Sothen
    Chief Financial Officer

 

 

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Exhibit Index

 

Exhibit No.   Description
2.2   Agreement and Plan of Merger, dated as of December 13, 2016, between Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. (incorporated by reference to Exhibit 2.2 to EVBS’s Current Report on Form 8-K filed December 14, 2016).
     
2.2.1   Amendment to Agreement and Plan of Merger, dated as of March 8, 2017, between Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. (incorporated by reference to Exhibit 2.1 to EVBS’s Current Report on Form 8-K filed March 9, 2017).
     
2.2.2   Amendment No. 2 to Agreement and Plan of Merger, dated as of April 5, 2017, between Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. (incorporated by reference to Exhibit 2.1 to EVBS’s Current Report on Form 8-K filed April 5, 2017).
     
99.1   Joint Press Release of Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc., dated June 23, 2017.

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

 

 

 

 

Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. Announce Closing of Merger

 

Contact: R. Roderick Porter, Executive Vice Chairman

Phone: 202-464-1130 ext. 2406

Fax: 202-464-1134

Southern National Bancorp, NASDAQ Symbol SONA

Website: www.sonabank.com

Contact: Joe A. Shearin, President & CEO

Phone: 804-528-4752

Southern National Bancorp, NASDAQ Symbol SONA

Website: www.sonabank.com

 

 

For immediate release

June 23, 2017

 

McLean, VA & Richmond, VA, June 23, 2017 – Southern National Bancorp of Virginia, Inc. (NASDAQ: SONA) (“Southern National”) and Eastern Virginia Bankshares, Inc. (NASDAQ: EVBS) (“Eastern Virginia”) jointly announced today the completion of the merger of Eastern Virginia with and into Southern National and the completion of the merger of Eastern Virginia’s wholly-owned bank subsidiary, EVB, with and into Southern National’s wholly-owned bank subsidiary, Sonabank. The combination brings together two banking companies with complementary business lines, creating one of the premier banking institutions headquartered in the Commonwealth of Virginia.

 

The combined company has approximately $2.6 billion in total assets, $2.0 billion in total deposits, and $1.8 billion in total loans.  The holding company will continue to operate under the name “Southern National Bancorp of Virginia, Inc.” and will maintain its corporate headquarters in McLean, Virginia. All banking operations will be conducted through Sonabank with its headquarters in Richmond, Virginia. The combined bank has 47 branch locations covering markets in both Maryland and Virginia, including the Washington, D.C. and Richmond, Virginia MSAs. These attractive markets are often cited as having some of the best demographic and income profiles in the country, frequently characterized by low unemployment, strong population growth, new business starts and consistent capital expenditure.

 

Pursuant to the merger agreement, the holders of shares of Eastern Virginia capital stock have the right to 0.6313 shares of Southern National common stock for each share of Eastern Virginia capital stock held immediately prior to the effective date of the merger.

 

The executive management team of the combined company will be comprised of Joe A. Shearin as President and CEO, Georgia S. Derrico as Executive Chairman and R. Roderick Porter as Executive Vice Chairman.

 

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Southern National was advised in the transaction by FIG Partners LLC as financial advisor, and Alston & Bird LLP, as legal counsel.   Eastern Virginia was advised by Sandler O’Neill + Partners, L.P. as financial advisor, and Troutman Sanders LLP, as legal counsel. 

 

Forward-Looking Statements

 

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Southern National’s expectations or predictions of future financial or business performance or conditions. These forward-looking statements are based on the current beliefs and expectations of the management of Southern National and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond its control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Forward-looking statements may be identified by words such as “may,” “could,” “will,” “expect,” “believe,” “anticipate,” “forecast,” “intend,” “plan,” “prospects,” “estimate,” “potential,” or by variations of such words or by similar expressions. Forward-looking statements in this report (including in the exhibits hereto) may include, but are not limited to, statements about projected impacts of and financial results generated by the transaction. Forward-looking statements speak only as of the date they are made and Southern National assumes no duty to update forward-looking statements, except as required by law.

 

In addition to factors previously disclosed in Southern National’s and Eastern Virginia’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this release, the following factors, among others, could cause actual results to differ materially from the results expressed in or implied by forward-looking statements and historical performance: changes in asset quality and credit risk; changes in interest rates and capital markets; the introduction, timing and success of business initiatives; competitive conditions; and the inability to recognize cost savings or revenues or to implement integration plans associated with the transaction. Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, may not reflect actual results and may not be relied upon.

 

 

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