TowneBank to acquire Franklin Financial Corp. in $275 million deal

Suffolk-based TowneBank plans to acquire 80-year-old, Richmond-based Franklin Financial Corp. in a deal valued at $275 million.

The acquisition would create a bank with total assets of $5.9 billion and total deposits of $4.1 billion.

“Our Towne family is humbled and excited to join hands with a legendary company that has served the greater Richmond community for over 80 years,” G. Robert Aston Jr.,  TowneBank’s chairman and CEO said in a statement, describing the deal as a “great foundation” for the bank’s entry into the Richmond market.

Franklin Financial, the parent company of Franklin Federal, had assets of $1.1 billion on March 31, the end of the first quarter.

TowneBank, which began operation in 1999, had $4.78 billion in assets at the end of March. It operates 28 branches in Hampton Roads and Northeastern North Carolina.

“I expect this combination to provide appreciable long-term value for our respective shareholders, and it will enable the combined institution to provide a much greater line of products to Franklin Federal’s current customers,” Richard T. Wheeler, Jr., the chairman, president and CEO of Franklin Financial, said in a statement.

Under the terms of the deal, Franklin shareholders will receive 1.40 shares of TowneBank common stock for each common share of Franklin.

Based on TowneBank’s closing stock price of $16.46 on Monday, the deal is valued at $23.04 per share or $275 million.

Wheeler will join TowneBank’s board of directors and executive committee while also serving on the TowneBank of Richmond board.

T. Patrick Collins has been named president and CEO of TowneBank of Richmond.