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Towne Bank (TOWN) to Acquire Farmers Bankshares, Inc. and Farmers Bank

August 18, 2022 8:03 AM EDT

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Hampton Roads based TowneBank (NASDAQ: TOWN) and Farmers Bankshares, Inc. (OTCPK: FBVA), the parent company of Farmers Bank, Windsor, Virginia, today announced the signing of a definitive merger agreement pursuant to which Farmers Bankshares, Inc. and Farmers Bank, will merge with and into TowneBank. The proposed transaction will solidify TowneBank’s number one market share in the Virginia Beach-Norfolk-Newport News MSA adding Isle of Wight and Southampton counties to the company’s service area while expanding Towne Insurance revenues.

“Our TowneBank family is humbled and excited to join hands with our long-time friends at Farmers,” said G. Robert Aston, Jr., Executive Chairman of TowneBank. “We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper.”

“We feel privileged to partner with our neighbors at TowneBank,” stated Vernon Towler, CEO of Farmers. “They share with Farmers Bank a commitment to philanthropy and community engagement. TowneBank is an incredibly strong organization.”

Based on financials reported on June 30, 2022 the combined companies would have total assets of $17.5 billion, loans of $10.9 billion and deposits of $14.5 billion. Under the terms of the agreement, shareholders of Farmers will receive 0.6050 shares of TowneBank common stock for each share of Farmers owned. This implies a deal value per share of $17.82, or approximately $56.0 million, based on TowneBank’s 20-day average stock price of $29.46 ending Wednesday, August 17, 2022.

TowneBank expects the merger to be approximately 5% accretive to earnings per share with fully phased-in cost savings on a GAAP basis. TowneBank anticipates the tangible book value dilution per common share impact to be less than 3% on a GAAP basis and accretive excluding accumulated other comprehensive income and interest rate marks impact.

In consideration of the merger, extensive due diligence was performed by the management teams of TowneBank and Farmers. The merger agreement was approved by the boards of directors of Farmers and TowneBank. The merger is expected to close in the first quarter of 2023 and is subject to customary conditions, including regulatory approval as well as the approval of Farmers’s shareholders.

Raymond James & Associates, Inc. served as the financial advisor and Troutman Pepper Hamilton Sanders LLP served as legal counsel to TowneBank in the transaction. Piper Sandler & Co. served as the financial advisor and Williams Mullen served as legal counsel to Farmers Bankshares in the transaction.



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