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TowneBank to buy Farmers Bankshares in Virginia

TowneBank in Suffolk, Va., has agreed to buy Farmers Bankshares in Windsor, Va.


The $16.9 billion-asset TowneBank said in a press release Thursday that it will pay $56 million in stock for the $609 million-asset Farmers. The deal, which is expected to close in the first quarter, priced Farmers at 196% of its tangible book value.

TowneBank will enter Isle of Wight and Southampton counties when the deal is completed. Farmers has eight branches, $277 million of loans and $521 million of deposits.

Farmers also owns Manry Rawls, an insurance brokerage with $6 million of annual revenue.

“We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper,” G. Robert Aston Jr., TowneBank’s executive chairman, said in the release. 

TowneBank said it expects the merger to be about 5% accretive to earnings per share, including planned cost savings. TowneBank said it should take less than three years to earn back less than 3% dilution to its tangible book value. 

TowneBank plans to cut 35% of Farmers’ annual noninterest expenses; three Farmers branches are within five miles of a TowneBank location. TowneBank expects to incur $9.6 million of merger-related expenses.

Raymond James and Troutman Pepper Hamilton Sanders advised TowneBank. Piper Sandler and Williams Mullen advised Farmers.

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