TowneBank to acquire Farmers Bank

Suffolk-based TowneBank has agreed to acquire Windsor-headquartered Farmers Bankshares Inc., the parent company of Farmers Bank, the two companies announced Thursday. The deal is expected to close early next year.

The $56 million deal, which would create a combined company worth $17.5 billion in total assets, loans of $10.9 billion and $14.5 billion, would add Isle of Wight and Southampton counties to TowneBank’s service area, as well as expanding Towne Insurance revenues.

“It’s a good opportunity for us to meet the needs of those two communities,” G. Robert Aston Jr., executive chair of TowneBank, told Virginia Business on Thursday. He expects the merger to result in 5% growth per share.

TowneBank has 27.5% of the Hampton Roads market share, ranking No. 1, according to the FDIC.

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

Under the terms of the agreement, Farmers shareholders will receive 0.605 shares of TowneBank common stock for each share of Farmers’ stock, for a deal valued at $17.82 per share, or about $56 million. That amount is based on TowneBank’s 20-day average stock price of $29.46 ending Wednesday. 

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

The merger agreement was approved by the boards of Farmers and TowneBank and 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’ 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. 

Founded in 1999, TowneBank operates more than 40 banks throughout Hampton Roads and Central Virginia, as well as in North Carolina. Its assets totaled $16.9 billion as of June 30.

Farmers Bank was founded in 1919 and operates eight branches and services areas throughout Virginia’s Tidewater region. Its assets totaled $608.6 million as of June 30.