Virginia-based First National, the parent of First Bank, is expanding its presence in the home market through the acquisition of The Bank of Fincastle (Fincastle) in a cash-stock deal worth around $31.6m.
As per the agreed terms of the merger deal, shareholders of Fincastle will be entitled to get 0.1649 shares of First National stock, or $3.30 in cash, or a combination of stock and cash, for each share held.
Eighty percent of the aggregate consideration will be in in First National stock, while the remainder will be cash payment.
Launched in 1907, First Bank has 14 bank branch offices. Fincastle was founded in 1875 and has six full‐service branches.
The merged entity will have nearly $1.2bn in assets, $868m in loans, and $1bn in deposits. It will have 20 branch offices across Virginia.
Fincastle president and CEO Scott Steele said: “I am enthusiastic about the opportunity we have to partner with First National in a transaction that we believe offers significant opportunities to our clients, communities, employees and shareholders. This partnership is an excellent opportunity to create value for both institutions.”
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By GlobalDataAs part of the deal, three Fincastle directors will secure seats on the First National and First Bank boards.
Steele will move to First Bank in the role of regional president.
The deal, slated to complete in the third quarter of this year, is anticipated to be around 10% accretive to First National’s earnings per share.
The deal already secured the clearance of the two companies’ boards. It now awaits shareholders’ and regulatory nod.
approvals s of each company. The transaction is expected to close in the third quarter of 2021, subject to approval of both companies’ shareholders, regulatory approvals and other customary closing conditions.
First National president and CEO Scott Harvard said: “With this combination, First Bank will extend its reach from the top of Virginia south down the I-81 corridor to Roanoke, ensuring our small and mid-sized Virginia markets continue to be served by an independent Virginia community bank.”
Other M&A activities in Virginia
Last October, Virginia National Bankshares agreed to merge with Fauquier Bankshares.
Earlier in 2020, Pinnacle Bankshares and Virginia Bank entered into a definitive agreement for a strategic merger.
The deal was completed in November last year, creating a company with assets of around $796m.