SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported)................June 17, 1997
SOUTH BRANCH VALLEY BANCORP, INC.
(Exact name of registrant as specified in its charter)
West Virginia 0-16587 55-0672148
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(State of other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
310 North Main Street, Moorefield, West Virginia 26836
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (304) 538-2353
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
SECURITY AND BANK
This statement relates to the consummation of the previously reported
proposed purchase of 424,680 shares of the Common Stock (the "Shares") of
Capital State Bank, Inc. ("Capital State Bank"), 2402 Mountaineer Boulevard,
South Charleston, West Virginia 25309. On June 17, 1997, South Branch
consummated its acquisition of the Shares.
On March 12, 1997, South Branch executed a Stock Purchase Agreement with
Ferris, Baker Watts, Inc. to purchase 50,000 shares of the Common Stock of
Capital State Bank at a purchase price of $10.25 per share (the "Ferris, Baker
Watts" Shares). This purchase was consummated on March 14, 1997. On June 18,
1997, in consideration for their willingness to serve on the Board of Directors
of Capital State Bank, South Branch transferred 500 shares each for a total of
1,500 shares of the 50,000 shares it had purchased from Ferris, Baker Watts to
Messrs. H. Charles Maddy, III, James M. Cookman and Harold K. Michael. South
Branch Valley Bancorp, Inc. has previously filed a Form 8-K dated January 15,
1997, an 8-K dated February 7, 1997, and an 8-K dated March 14, 1997, relating
to the proposed purchase of 424,680 shares of Capital State Bank, Inc. To the
extent not amended herein, South Branch's prior filings are incorporated herein
by reference.
IDENTITY AND BACKGROUND
The person filing this statement is South Branch Valley Bancorp, Inc.
("South Branch") whose principal office is located at 310 North Main Street,
Moorefield, West Virginia. South Branch is a bank holding company organized
under the laws of the State of West Virginia. Its principal business is the
operation of its subsidiary, South Branch Valley National Bank, Moorefield, West
Virginia, which engages in the business of banking.
In addition to the above, set forth below is required information
concerning the directors and executive officers of South Branch, including each
individual's name, address, present principal occupation or employment,
corporation or other organization in which employment is conducted and place of
citizenship.
Name & Address Occupation Citizenship
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Oscar M. Bean Senior Partner United States
P. O. Box 30 Bean & Bean, Attorneys at Law
Moorefield, WV 26836 118 Washington Street, Moorefield,
WV 26836
Donald W. Biller President, D. W. Biller, Inc. United States
HC 83, Box 30 HC 83, Box 30 (farming operation)
Lost River, WV 26811 Lost River, WV 26811
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James M. Cookman President, Cookman Insurance Center, United States
P. O. Box 37 Inc. P. O. Box 490 (insurance agency)
Petersburg, WV 26847 Petersburg, WV 26847
President, Cookman Realty Group, Inc.
P. O. Box 490 (real estate
holding company)
Petersburg, WV 26847
President, Transcover, Inc.
P. O. Box 490 (aviation insurance
agency)
Petersburg, WV 26847
John W. Crites President, Allegheny Wood Products, United States
46 Point Drive Inc.
Petersburg, WV 26847 P. O. Box 867 (wood products industry)
Petersburg, WV 26847
Partner, Allegheny Dimension, LLC
HC83, Box 5 (wood products industry)
Petersburg, WV 26847
Partner, JPC, LLC
P. O. Box 867 (wood products industry)
Petersburg, WV 26847
Partner, KJV Aviation, Inc.
P. O. Box 867 (airplane charter service)
Petersburg, WV 26847
Thomas J. Hawse, III President, Hawse Food Market, Inc. United States
P. O. Box 602 Rt. 220, North (retail grocery)
Moorefield, WV 26836 Moorefield, WV 26836
Partner, Hawse Brothers
Phoebe F. Heishman Publisher & Editor, Moorefield United States
136 South Main Street Examiner
P. O. Box 380 P. O. Box 380 (weekly newspaper)
Moorefield, WV 26836 Moorefield, WV 26836
Gary L. Hinkle President, Hinkle Trucking, Inc. United States
P. O. Box 65 P. O. Box 65 (trucking company)
Circleville, WV 26804 Circleville, WV 26804
President, Dettinburn Transport, Inc.
HC 59, Box 360 (trucking company)
Petersburg, WV 26847
President, Mt. Storm Fuel Corporation
P. O. Box 55 (fuel distributor)
Circleville, WV 26804
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Jeffrey E. Hott Vice President, Franklin Oil Company United States
HC 60, Box 27A P. O. Box 517 (fuel distributor)
Franklin, WV 26807 Franklin, WV 26807
Vice President, E. E. Hott, Inc.
P. O. Box 656 (real estate holding co.)
Franklin, WV 26807
Vice President, Hott's Ag Services, Inc.
P. O. Box 656 (retail agricultural sales)
Franklin, WV 26807
H. Charles Maddy, III President, South Branch Valley United States
P. O. Box 79 Bancorp, Inc.
Old Fields, WV 26845 310 N. Main Street(bank holding company)
Moorefield, WV 26836
President & Chief Executive Officer
South Branch Valley National Bank
310 N. Main Street
Moorefield, WV 26836
Harold K. Michael Agent, Nationwide Insurance United States
P. O. Box 300 P. O. Box 300
Moorefield, WV 26836 Moorefield, WV 26836
Member, West Virginia House of
Delegates
Mary Ann Ours President, Ours Valley View Farms, United States
P. O. Box 541 Inc., P. O. Box 541
Moorefield, WV 26836 (poultry & beef operation)
Moorefield, WV 26836
Russell F. Ratliff, Jr. Vice President United States
P. O. Box 925 South Branch Valley National Bank
Moorefield, WV 26836 310 N. Main Street
Moorefield, WV 26836
Harry C. Welton, Jr. Retired owner of family farming United States
HC 66, Box 28 operation
Moorefield, WV 26836
Renick C. Williams President, South Branch Inn, Inc. United States
P. O. Box 664 P. O. Box 664 (family operated
Moorefield, WV 26836 motel)
Moorefield, WV 26836
President, Fort Pleasant Farms, Inc.
P. O. Box 664 (family farming operation)
Moorefield, WV 26836
President, Hampshire S & J Co., Inc.
P. O. Box 664 (commercial
property rental)
Moorefield, WV 26836
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Scott C. Jennings Vice President United States
P. O. Box 438 South Branch Valley National Bank
Moorefield, WV 26836 310 N. Main Street
Moorefield, WV 26836
During the past five years, none of the above-named persons has been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
In addition, during the past five years, no such person has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction,
and as a result of such proceeding, was or is subject to a judgment, decree or
final order enjoining future violations of or prohibiting or mandating
activities subject to Federal or state securities laws or finding any violation
with respect to such laws.
SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS
As stated in its Form 8-K dated January 15, 1997, South Branch executed a
letter of intent dated January 15, 1997 (the "Letter of Intent") to purchase
275,000 shares, or approximately 23%, of Capital State Bank, Inc. ("Capital
State Bank") from Fred L. Haddad at a purchase price of $11.00 per share. The
Letter of Intent was contingent on the happening of several events, including
but not limited to (i) execution of a definitive stock purchase agreement; (ii)
the ability of South Branch to purchase an additional 149,680 shares of Capital
State Bank stock at a purchase price of $11.00 per share from the following
individuals: Karen L. Haddad - 10,000 shares, Larry Haddad - 20,000 shares,
Susan Haddad - 60,000 shares, Lauren Haddad - 15,000 shares, Elizabeth Haddad -
15,000 shares and Paul White 29,680 shares, (herein collectively referred to as
the "Additional Shares"); (iii) the ability of South Branch to obtain all
regulatory approvals; and (iv) completion of a due diligence review of
financial, legal, accounting and environmental matters that is satisfactory to
South Branch. At the time of filing of South Branch's Form 8-K dated January 15,
1997, letters of intent with the holders of the Additional Shares had not been
executed.
Since the filing of that 8-K, South Branch (i) executed letters of intent
with the holders of the Additional Shares and (ii) executed a definitive stock
purchase agreement with Mr. Haddad and the holders of the Additional Shares (the
"Stock Purchase Agreement"). In addition, certain members of the Board of
Directors of South Branch own stock in Capital State Bank. Messrs, John W.
Crites, H. Charles Maddy, III, Gary L. Hinkle, James M. Cookman and Harold K.
Michael each own 5,000, 800, 1,000, 500 and 500 shares, respectively (the
"Affiliate Shares"). The acquisition of Mr. Haddad's Shares and the Additional
Shares (collectively the "Shares") and the purchase of the Ferris, Baker Watts
Shares reported in Amendment No. 2 to this 8-K, combined with the Affiliate
Shares will result in South Branch owning approximately 40% of Capital State
Bank, Inc.
The source and amount of funds used in purchasing the Shares was (i)
$178,690.50 in funds currently available from South Branch, and (ii) a loan in
an amount not to exceed $3,000,000 from the Potomac Valley Bank, Petersburg,
West Virginia. The source of the remaining $1,492,789.50 was funds available to
South Branch as a result of its sale of authorized but unissued shares of South
Branch stock to certain directors at a purchase price of $43.50 per share. The
sale
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of South Branch stock to those directors was also consummated on June 17, 1997
and information concerning such purchases will be reported in a Schedule 13D to
be filed with the Securities and Exchange Commission by the directors purchasing
stock. The directors who purchased South Branch stock and the amount they
purchased are as follows:
Amount of Shares
of Applicant Owned
Director's Name Number of Shares Dollar Amount After Acquisition
- --------------------- ------------------ ----------------- -------------------
Number %
--------- -----
John W. Crites 25,300 $1,100,550.00 51,205 12.40
Gary L. Hinkle 4,600 200,100.00 14,517 3.52
Jeffrey E. Hott 2,530 110,055.00 21,505 5.21
Oscar M. Bean 575 25,012.50 9,274 2.25
Donald W. Biller 506 22,011.00 6,626 1.61
Thomas J. Hawse, III 300 13,050.00 3,100 0.75
Mary Ann Ours 506 22,011.00 5,121 1.24
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34,317 $1,492,789.50 111,348 26.98%
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As discussed in prior filings, the proposed transaction with respect to the
Shares was subject to prior regulatory approval by state and federal bank
regulatory authorities. The purchase of the Ferris, Baker Watts Shares was not
subject to prior regulatory approval because such purchase constitutes less than
5% of the issued and outstanding stock of Capital State Bank. Regulatory
approval is not required for a purchase of 5% or less. All required regulatory
approvals have been obtained by South Branch. The sale of stock to directors is
not part of an overall plan by this group to obtain control of South Branch.
PURPOSE OF TRANSACTION
The purpose of this transaction is to permit South Branch to obtain control
of Capital State Bank, Inc. At this time, it is the intention of South Branch to
accumulate enough stock to motivate its discussions with management of Capital
State Bank, Inc. and to enhance the prospects that the contemplated transaction
will be successfully consummated by reducing the possibility of a third party
making an unsolicited acquisition proposal.
At this time, South Branch is considering the option of seeking to acquire
the remaining shares of Capital State Bank, Inc., through a negotiated merger
proposal with current management. South Branch and Capital State Bank are
currently engaged in preliminary merger
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discussions. No agreement has been reached by the parties. South Branch
contemplates that if such preliminary merger discussions result in an agreement,
such proposal would include negotiations concerning the resignation of certain
board members and the filling of board vacancies. Since the filing of its
initial 8-K, pursuant to the Stock Purchase Agreement, two directors of Capital
State Bank, Inc., Karen L. Haddad and Paul White have resigned. Since the filing
of Amendment No. 1 to the FR-11, Larry Haddad has resigned as Chairman of the
Board of Directors. Charles Piccirillo is now acting Chairman of the Board. On
June 17, 1997, Messrs. H. Charles Maddy, III, James M. Cookman, and Harold K.
Michael were elected to the Board of Directors of Capital State Bank.
INTEREST IN SECURITIES OF THE ISSUER
The aggregate number and percentage of the common stock of Capital State
Bank, Inc. beneficially owned by South Branch is 473,180 shares. This amount,
combined with the Affiliate Shares will give South Branch approximately 40%
interest in Capital State Bank. Messrs. John W. Crites, H. Charles Maddy, III,
Gary L. Hinkle, James M. Cookman and Harold K. Michael each own 5,000, 800,
1,000, 500 and 500 shares of Capital State Bank, respectively.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
SOUTH BRANCH VALLEY BANCORP, INC.
June 24, 1997 /s/ H. Charles Maddy, III
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Date By: H. Charles Maddy, III
Its: President
The original statement shall be signed by each person on whose behalf the
statement is filed on his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
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