First Community Bankshares in Bluefield, Va., has agreed to buy Surrey Bancorp in Mount Airy, N.C.
The $3.6 billion-asset First Community said in a press release that it will pay $113.2 million in stock for the $500 million-asset Surrey. The deal, which is expected to close in the second quarter, priced Surrey at 194% of its tangible book value.
Surrey has seven branches, $244 million of loans and $436 million of deposits. It also has a government-guaranteed lending program.
First Community said it expects the deal to generate mid-single-digit earnings accretion. It should take a little more than two years for First Community to earn back any dilution to its tangible book value.
First Community plans to cut about 40% of Surrey’s annual noninterest expenses. It expects to incur $8.9 million of merger-related expenses.
Ted Ashby, Surrey’s CEO, and another director are expected to join First Community’s board. Peter Pequeno, Surrey’s president, and other key executives are expected to join First Community.
Performance Trust and Bowles Rice advised First Community. Raymond James and Brooks, Pierce, McLendon, Humphrey & Leonard advised Surrey.