Parkway Acquisition, the parent company of Skyline National Bank, has signed a definitive agreement to acquire Great State Bank in a stock transaction worth about $14.5m.

As per terms of the deal, Great State Bank will merge with and into Skyline National Bank. Upon completion of integration, Skyline will continue to operate as a wholly-owned subsidiary of Parkway.

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The united business will manage 20 bank branches, and will own assets of approximately $700m, deposits of over $600m and shareholders’ equity of over $70m.

Skyline  and Parkway president and CEO Allan Funk said: “This combination will expand our presence into several additional North Carolina counties and further our goal of being the leading community bank in our region.

“This transaction is a partnership of two organizations that share a similar culture of service and community and represents a natural extension of Skyline into the adjacent markets of Wilkes, Watauga and Yadkin counties in North Carolina. We look forward to serving the local businesses and individuals in these areas and continuing to offer an unmatched customer experience in our existing markets.”

For each share of Great State common stock, its shareholders will receive 1.21 shares of Parkway common stock.

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The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to be immediately accretive to Parkway’s estimated earnings before one-time costs, with a tangible book value earn-back of about three years.

Upon completion of deal, two Great State directors will join the Parkway and Skyline board of directors. Great State president and CEO Greg Edwards will continue with the bank as regional president for North Carolina.

Subject to approval by Parkway’s and Great State’s shareholders, banking regulators and other customary closing conditions, the merger is slated to be concluded in the third quarter of 2018.