Valley Community Bank (fka VCBC)

[56Chevy]

Objection to Merger by Mr. Stephen Taylor

On June 17, 2014, Mr. Stephen S. Taylor, Jr., a shareholder, sent a letter to the VCB Board of Directors, stating that, based on his review of publicly available information regarding the recently announced agreement to merge into FNB, the announced transaction price seemed very low. His letter also requested answers to a list of eleven questions, all related to the decision-making process followed by the VCB Board of Directors prior to signing the agreement. Subsequently, on August 11, 2014, Mr. Taylor, a 9.8% shareholder of VCB, provided an additional letter to the VCB Board of Directors, stating his objection to the proposed merger with FNB and his belief that it would be preferable for VCB to remain an independent institution (the “Taylor Letter”). The Taylor Letter objected to the FNB merger on a number of bases, including Mr. Taylor’s belief that the proposed merger consideration was insufficient, that the merger may not preserve VCB’s deferred tax asset and that the VCB Board of Directors did not carry out a thorough and timely market check to identify if others might provide a better opportunity.

The Taylor Letter stated that Mr. Taylor would be personally prepared to negotiate a definitive agreement, and following regulatory approvals and completion of satisfactory due diligence, to offer to purchase up to 40% of the outstanding shares of VCB common stock not currently held by him for cash in the amount of $4.12 per share, subject to standard tender offer conditions.

On August 19, 2014, the VCB Board of Directors reviewed the Taylor Letter. Following discussions with legal counsel and its financial advisors and consideration of all material information, the VCB Board of Directors unanimously confirmed their commitment to the consummation of the merger with FNB and renewed their recommendation to shareholders to approve the merger. The Board of Directors of VCB unanimously believes that the proposed merger with FNB is in the best interests of VCB and its shareholders. On August 20, 2014, VCB responded to the Taylor Letter indicating its commitment to consummate the merger with FNB (the “VCB Letter”).

Copies of the VCB Letter and the Taylor Letter have been delivered to FNB Bancorp and the Department of Business Oversight and are available for any shareholder to review upon request to VCB (at Valley Community Bank, 465 Main Street, Pleasanton, California 94566, Attention: Chief Executive Officer, telephone [phone]) or to FNB (at FNB Bancorp, 975 El Camino Real, Third Floor, South San Francisco, California 94080, Attention: Chief Executive Officer, telephone [phone]).

A public hearing will be held before the Commissioner of Business Oversight of the State of California, or a person designated by the Commissioner of Business Oversight, at One Sansome Street, Sixth Floor, San Francisco, California 94104, on October 23, 2014 at 10:00 a.m. VCB shareholders may wish to conduct their own due diligence and retain independent counsel, such as a lawyer, accountant or financial advisor. VCB shareholders and their agents may appear at the hearing in favor of, or in opposition to, the granting of the permit. Whether or not you plan to attend, you are invited to make your views known by sending correspondence to Danielle A. Stoumbos, Corporations Counsel, One Sansome Street, Suite 600, San Francisco, California 94104, at least three business days prior to the hearing.

http://www.sec.gov/Archives/edgar/data/1163199/000101905614001206/ex99_1.htm

* OK we finally know who the 9.8% shareholder is and he's not happy with this deal either.

Marker:
Valley Community Ban (VCBC)
$2.60 down -0.45 (-14.75%)
Volume: 1,700