Hampton Roads based TowneBank (NASDAQ: TOWN) and Village Bank and Trust Financial Corp. (NASDAQCM: VBFC) (“Village”), the parent company of Village Bank, today announced the signing of a definitive agreement and plan of reorganization pursuant to which TowneBank will acquire Village and Village Bank. The proposed transaction will enhance TowneBank’s continued and growing presence in the Richmond MSA while providing opportunity for diverse revenue synergies with Towne Financial Services Group and strategic capital deployment.
“Our TowneBank family is humbled and excited to partner with Village Bank and its team members,” said G. Robert Aston, Jr., Executive Chairman of TowneBank. “We believe our partnership can bring additional products and expanded services to the clients of Village Bank while meaningfully enhancing our Richmond presence, which is core to our franchise and future growth.”
“We’re excited to partner with TowneBank,” said Jay Hendricks, President and Chief Executive Officer of Village. “This merger is not just a business decision but a strategic move to enhance the value we deliver to our customers. This partnership will give us the ability to continue to meet our customers’ banking needs with greater resources and products while providing increased opportunities for our employees.”
Based on financials reported as of June 30, 2024, the combined companies would have total assets of $17.8 billion, loans of $12.1 billion and deposits of $14.9 billion. Under the terms of the agreement, shareholders of Village will receive $80.25 per share in cash for each share of Village outstanding common stock. This corresponds to an aggregate transaction value of approximately $120.0 million, based on Village common stock currently outstanding.
TowneBank expects the transaction to be approximately 6% accretive to earnings per share with fully phased-in cost savings on a GAAP basis.
In consideration of the transaction, extensive due diligence was performed by the management teams of TowneBank and Village. The definitive agreement was approved by the boards of directors of TowneBank and Village. The transaction is expected to close in the first half of 2025 and is subject to customary conditions, including regulatory approval, as well as the approval of Village’s shareholders.
Piper Sandler & Co. served as the financial advisor and Troutman Pepper Hamilton Sanders LLP served as legal counsel to TowneBank in the transaction. Janney Montgomery Scott served as the financial advisor and Williams Mullen served as legal counsel to Village in the transaction.
