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Rock Branch discussed possible mergers with 2 parties before First Sentry Bancshares

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Rock Branch discussed possible mergers with 2 parties before First Sentry Bancshares

Nitro, W.Va.-based RockBranch Community Bank Inc. discussed possible merger transactions withtwo parties before Huntington, W.Va.-based FirstSentry Bancshares Inc.

Rock Branch entered into a mutual confidentiality agreement witha West Virginia-based bank holding company in September 2010. The partiesdiscussed a possible merger in the second and third quarter of 2011 but could notagree on mutually acceptable terms.

In the third quarter of 2011, Rock Branch pursued merger discussionswith an Ohio-based financial holding company. The bank received an indication ofinterest in November 2011, but the parties could not agree on mutually acceptableterms.

In June 2015, Rock Branch again entered into a new mutual confidentialityagreement with the West Virginia-based bank holding company. However, the bank holdingcompany did not carry out any merger discussions with the bank.

On or about July 15, 2015, Geoffrey Sheils, President and CEOof First Sentry, reached out to Joseph McDonie, chairman, president and CEO of RockBranch, regarding a possible merger. McDonie advised the Rock Branch board of directorsof the conversation at their meeting in July 2015.

The CEOs of both banks met July 24, 2015, while McDonie was transactingpersonal business at First Sentry's main bank. During a general conversation, Sheilssuggested that the two banks would be a good "fit."

On July 29, 2015, McDonie received a formal written communicationexpressing First Sentry's interest in a possible merger. On Aug. 7, 2015, McDonieacknowledged that he was in receipt of the July 29, 2015, communication. First SentryChairman Robert Beymer visited McDonie on Aug. 14, 2015, and suggested that theCEOs of both banks should talk further.

McDonie advised the Rock Branch board of directors on Aug. 19,2015, of the letter and visit from Beymer at their regularly scheduled meeting.

On Aug. 24, 2015, Sheils met with McDonie and proposed a potentialmerger, but did not discuss any deal terms.

First Sentry sent Rock Branch a nonbinding letter of interestproposing a merger on Oct. 20, 2015, and a letter of interest and an accompanyingmutual confidentiality agreement on Oct. 21, 2015. After the authorization fromthe board of Rock Branch, McDonie executed and returned the letter of interest onthe same day.

From October 2015 through February 2016, First Sentry conductedits due diligence review of Rock Branch, while Rock Branch conducted its reviewof First Sentry.

Rock Branch jointly engaged Austin Associates LLC and InvestmentBank Services in January 2016 to provide financial advisory services in connectionwith the potential transaction. Rock Branch and its legal and financial advisersnegotiated the terms of the agreement with First Sentry, which was unanimously approvedby the First Sentry board of directors March 15.

Eventually, the board of Rock Branch also unanimously approvedthe proposed merger.

The companies entered into the merger agreement on March 25,which was announced March28.