First Community Bankshares in Bluefield, Va., has agreed to buy Hometown Bancshares in Middlebourne, W.Va.
The $3.2 billion-asset First Community said in a press release that it will pay $41.5 million in stock for the parent of the $402 million-asset Union Bank. The deal, which is expected to close early in the first quarter, priced Hometown at 158% of its tangible book value.
The acquisition “is a natural expansion into West Virginia markets that are similar in size and makeup to the locations where we’ve had great success across our broader banking footprint,” Gary Mills, First Community’s president and CEO, said in the release.
First Community said the deal should be 7.2% accretive to its 2026 earnings per share. It should take a little over a year to earn back an estimated 1.7% dilution to tangible book value.
First Community plans to cut about 30% of Hometown’s annual noninterest expenses. The company expects to incur $5.1 million of merger-related charges.
First Community expects to sell $191 million of Hometown’s securities at a fair value of $177.8 million.
Tim Aiken, Hometown’s president and CEO, is expected to join First Community.
D.A. Davidson and Bowles Rice advised First Community. Hovde Group and Hunton Andrews Kurth advised Hometown.