First National to acquire Prince George-based community bank

Strasburg-based First National has entered into a definitive merger agreement to acquire Prince George-based Touchstone Bankshares in an all-stock transaction worth approximately $47 million, First National announced Tuesday.

The parent companies’ merger combines community banks First Bank and Touchstone Bank to create a bank with expected total assets of about $2.1 billion, $1.5 billion in loans and $1.8 billion in deposits. The resulting company is expected to be the ninth largest Virginia community bank by deposits.

The combined company will have 30 branch offices across Virginia and two branches in North Carolina.

“We are thrilled to have found a partner with an equally long history of serving and supporting local customers and businesses in their communities,” First National President and CEO Scott Harvard said in a statement. “Combining our companies will help ensure that we continue to be part of the fabric of the communities we serve. … We are incredibly excited about this opportunity to expand our Richmond metro presence with the addition of seven branches in the market, and we look forward to welcoming the entire Touchstone team into the First Bank family.”

In the metro Richmond area, where it’s expected to have eight branches, the combined company’s deposits are expected to exceed $350 million.

According to the terms of the agreement, Touchstone shareholders will receive 0.8122 shares of First National stock for each share of Touchstone stock. Based on First National’s closing stock price of $17.55 on March 22, the deal’s approximate aggregate value is $47 million, or $14.25 per share of Touchstone stock.

“First National is a like-minded partner that shares our culture of supporting our communities by focusing on building meaningful relationships and personalized service to their customers,” Touchstone President and CEO James Black said in a statement. “We are enthusiastic about the opportunity to partner with First National in a transaction that we believe offers significant opportunities to our clients, communities, employees and shareholders.”

The companies’ boards of directors have unanimously approved the merger agreement. The transaction is expected to close in the fourth quarter, subject to shareholder and regulatory approvals.

First National and First Bank will appoint three Touchstone directors to join the existing nine directors on each board. Black will join First Bank as an executive vice president and south region president.

Founded in 1906 as Bank of Dinwiddie, Touchstone currently has 12 branches across the metro Richmond area, south Central Virginia and northern North Carolina. As of Dec. 31, 2023, Touchstone reported total assets of $658.7 million, gross loans of $508.8 million and total deposits of $542.2 million.

First National is the holding company of First Bank, which opened in 1907. The company has 20 bank branches throughout the Shenandoah Valley, Central Virginia and the Roanoke Valley, as well as a customer service center in a retirement community and a loan production office. First Bank also operates First Bank Wealth Management and owns First Bank Financial Services, which invests in investment service and title insurance providers.