First Community Bankshares, the parent company of First Community Bank, and Highlands Bankshares, the parent company of Highlands Union Bank, have signed a definitive merger agreement under which First Community will acquire Highlands Bankshares and Highlands Union Bank.
The transaction combines two traditional community banks serving the Highlands region in Virginia, North Carolina and Tennessee. Upon closing of the acquisition, First Community is expected to have total consolidated assets worth more than $2.8bn (£2.2bn).
Highlands Union Bank had total assets of nearly $612m (£496m) as of 30 June 2019.
First Community Bank president and CEO Gary Mills said: “We are excited to join forces with the Highlands Union Bank team to continue to provide the highest level of service to our customers and the local communities we serve.
“We welcome Highlands’ customers, employees and shareholders. We believe this highly strategic affiliation will mutually benefit our shareholders, customers and employees.”
Highlands is merged into First Community and First Community will be the surviving firm
Under the agreement and plan of merger, each share of Highlands common and preferred stock outstanding immediately before the merger would be converted into the right to receive 0.2703 shares of First Community common stock.
The conversion equates to $8.80 (£7.13) per share of Highlands common stock and an average transaction value of approximately $91m (£73m), based the 20-day average closing price.
In addition, the agreement addresses the merger of Highlands Union Bank into First Community Bank immediately following the merger of First Community and Highlands, with First Community Bank as the surviving bank.
The transaction, which has been unanimously approved by the directors of both the firms, is subject to closing conditions including approval of Highlands’ shareholders and the receipt of all required regulatory approvals.
For the transaction, Banks Street Partners served as financial advisor to First Community and First Community Bank and represented by Pitman Law Firm Fox Rothchild and Bowles Rice. Stephens served as financial advisor to Highlands and represented by Nelson Mullins Riley & Scarborough.
Highlands interim CEO and president Bryan Booher said: “First Community will be an excellent partner when it comes to culture, commitment to customer satisfaction, and involvement in our local communities.
“Our customers will have access to a broader product offering and branch network while continuing to receive service that exceeds their expectations. Our employees will join a familiar culture and our shareholders will enjoy the benefits of being part of a high-performing $2.8 billion asset franchise.”
