RBC Centura To Acquire Flag Financial Corporation
Provides expanded footprint in fast-growing Atlanta market
ATLANTA, GA, and RALEIGH, NC, August 9, 2006 —
RBC Centura Banks, Inc., a wholly owned subsidiary of Royal
Bank of Canada (TSX, NYSE: RY), and Atlanta, Georgia-based
Flag Financial Corporation (NASDAQ: FLAG) today announced
the signing of a definitive merger agreement pursuant to which
RBC Centura Banks, Inc. will acquire Flag Financial Corporation
and its bank subsidiary, Flag Bank.
Under the agreement, shareholders of Flag Financial Corporation
will receive $25.50 per share, valuing the deal at approximately
$456 million. The acquisition is subject to customary closing
conditions, including approval by U.S. and Canadian regulators
and by a majority of Flag Financial shareholders. The transaction
is expected to be completed by the end of 2006.
Flag Financial owns and operates Flag Bank, which has 17
branches and 370 employees serving approximately 22,000 households
in the metro Atlanta, central and western areas of Georgia.
Flag Bank has a deposit balance of approximately $1.35 billion
and loans of approximately $1.25 billion.
"The combined operations of RBC Centura and Flag Bank
represent a strong strategic, cultural, and economic fit,"
said Scott Custer, chief executive officer of RBC Centura.
"Flag Bank's presence in Georgia combined with its distinct
business banking capability are ideally aligned with RBC Centura's
strategic focus to become the bank for business, business
owners and professionals."
Georgia and metro Atlanta are strategic to RBC Centura's
growth in the southeastern United States. The Flag Bank branch
offices will join a network of 30 RBC Centura banking centers
already in Georgia, primarily in the metro Atlanta area. Following
the close of the transaction, RBC Centura will merge Flag
Bank into RBC Centura, and Flag Bank's branch network will
operate under the RBC Centura brand name. As a result of the
deal, J. Thomas Wiley, Jr., currently CEO of Flag Bank, will
become the Georgia State President of RBC Centura.
Joseph W. Evans, chairman and CEO of Flag Financial Corporation,
said, "The combined operations of Flag Bank and RBC Centura
in Georgia should result in a bank with the capacity for far
greater economic impact on our communities than either company
had separately. Flag Bank's leadership team is pleased and
excited to have the opportunity to build out its dream as
a part of RBC Centura."
"This acquisition supports RBC Centura's overall strategy
of disciplined, affordable, add-on investments to expand our
distribution network," said Custer. "We believe
RBC Centura will benefit from Flag Bank's expertise and niche
products and services designed to meet the needs of owner-managed
businesses. Flag Bank will gain access to RBC Centura's broad
branch network and diverse service offerings, providing significant
market differentiation and opportunity for customers and employees
in our Georgia communities."
The acquisition extends RBC Financial Group's growing U.S.
financial services platform. In addition to RBC Centura, RBC's
U.S. operations include: RBC Dain Rauscher, a full-service
securities firm based in Minneapolis; RBC Insurance, a national
provider of insurance protection and asset accumulation solutions
based in Greenville, S.C.; RBC Capital Markets, with corporate
and investment banking operations in New York, Minneapolis,
Greenwich and other select U.S. locations; RBC Builder Finance,
a Houston-based provider of construction loans with national
reach; and Global Private Banking with offices in New York,
Miami, Houston and San Francisco.
Flag Financial Corporation (NASDAQ: FLAG) is a bank holding
company whose wholly owned subsidiary is Flag Bank. The Flag
Financial franchise consists of 26 offices, including 17 full-service
banking offices and five mortgage/loan production offices,
in 14 Georgia counties. In addition to traditional banking
services, Flag Bank provides payroll services nationally to
businesses through its Payroll Solutions division, and through
its Smartstreet division, offers custom banking and cash management
services for community associations and management companies
throughout the United States. For more information, please
About RBC Centura Banks, Inc.
RBC Centura offers a wide range of financial services and
advice, including a complete line of banking, investment,
loan, mortgage, life insurance, and other services, to individuals,
businesses and public institutions throughout the Southeast.
RBC Centura's multifaceted customer access network includes
more than 270 full-service banking centers, an extensive ATM
network, and telephone and Internet banking. In addition,
RBC Centura offers builder finance products through its RBC
Builder Finance division. According to the Federal Reserve,
RBC Centura is the 50th largest U.S. commercial bank as of
June 2005. RBC Centura Banks, Inc., is a wholly owned subsidiary
of Royal Bank of Canada (RBC) (NYSE, TSX: RY). Additional
information about RBC Centura may be found at www.rbccentura.com.
About RBC Financial Group Royal Bank
(TSX, NYSE: RY) uses the initials RBC as a prefix
for its businesses and operating subsidiaries, which operate
under the master brand name of RBC Financial Group. Royal
Bank of Canada is Canada's largest bank as measured by market
capitalization and assets, and is one of North America's leading
diversified financial services companies. It provides personal
and commercial banking, wealth management services, insurance,
corporate and investment banking, and transaction processing
services on a global basis. The company employs approximately
70,000 full and part-time employees who serve more than 14
million personal, business and public sector clients through
offices in North America and some 30 countries around the
world. For more information, please visit www.rbc.com.
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For more information, please contact:
Kristen Doherty, RBC Centura, (919) 788-6076
Kathy Bevan, RBC Financial Group, (416) 974-8810
Katie Bows, Flag Financial Corporation (404) 760-7712
Dave Mun, Investor Relations, RBC Financial Group,
For general investor relations information please visit: www.rbc.com/investorrelations.
Dan Speight, Flag Financial Corporation (404) 760-7706
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press release may be
deemed to be forward-looking statements under certain securities
laws, including the "safe harbor" provisions of
the United States Private Securities Litigation Reform Act
of 1995 and in any applicable Canadian securities legislation,
and RBC and Flag Financial Corporation ("Flag")
intend that such forward-looking statements be subject to
the safe-harbor created thereby. The words "may,"
"could," "should," "would,"
"suspect," "outlook," "believe,"
"plan," "anticipate," "estimate,"
"expect," "intend," "forecast",
"objective" and words and expressions of similar
import are intended to identify forward-looking statements.
By their very nature, forward-looking statements involve
numerous assumptions, and inherent risks and uncertainties,
both general and specific, and risks exist that predictions,
forecasts, projections and other forward-looking statements,
including statements about the proposed acquisition of Flag
by RBC Centura, will not be achieved. We caution readers not
to place undue reliance on these statements as a number of
important factors could cause our actual results to differ
materially from the beliefs, plans, objectives, expectations,
anticipations, estimates and intentions expressed in such
forward-looking statements. These factors include, but are
not limited to the possibility that the proposed transaction
does not close when expected or at all because required regulatory,
shareholder or other approvals are not received or other conditions
to the closing are not satisfied on a timely basis or at all,
that the RBC and Flag may be required to modify the terms
and conditions of the proposed transaction to achieve regulatory
approval, or that the anticipated benefits of the transaction
are not realized as a result of such things as the strength
of the economy and competitive factors in the areas where
Flag does business; the impact of changes in the laws and
regulations regulating financial services and enforcement
thereof (including banking, insurance and securities); judicial
judgments and legal proceedings; RBC's ability to complete
the acquisition of Flag and to integrate it with RBC Centura
successfully; reputational risks, and other factors that may
affect future results of RBC Centura and Flag including changes
in trade policies, timely development and introduction of
new products and services, changes in tax laws, and technological
and regulatory changes . We caution that the foregoing list
of important factors is not exhaustive.
RBC and Flag Financial Corporation assume no obligation to
update the forward-looking statements contained in this press