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TowneBank (TOWN) to Acquire Farmers Bankshares for $56 Million
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TowneBank (TOWN - Free Report) has signed a deal worth $56 million or $17.82 per share to acquire Farmers Bankshares, Inc. and its subsidiary Farmers Bank. The closing of the deal, subject to customary conditions, including regulatory approval and the approval of Farmers Bankshares’ shareholders, is expected in the first quarter of 2023.
The transaction is expected to solidify TowneBank’s number one market share in the Virginia Beach-Norfolk-Newport News, MSA. Moreover, with the acquisition, TOWN will be able to expand Towne Insurance revenues.
Per the terms of the deal, shareholders of Farmers Bankshares will receive 0.6050 shares of TowneBank common stock for each of their shares owned.
Based on financials as of Jun 30, 2022, the combined company will have total assets worth $17.5 billion, loans worth $10.9 billion and deposits worth $14.5 billion.
TowneBank anticipates the merger to be 5% accretive to earnings per share, with fully phased-in cost savings on a GAAP basis.
A tangible book value dilution per common share impact of less than 3% on a GAAP basis is expected.
G. Robert Aston, Jr., executive chairman of TowneBank, stated, “Our TowneBank family is humbled and excited to join hands with our long-time friends at Farmers. We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper.”
Vernon Towler, CEO of Farmers Bankshares, said, “We feel privileged to partner with our neighbors at TowneBank. They share with Farmers Bank a commitment to philanthropy and community engagement. TowneBank is an incredibly strong organization.”
Over the past year, shares of TOWN have lost 0.9% against the industry’s growth of 7.7%.
Image Source: Zacks Investment Research
Inorganic Growth Efforts by Other Finance Companies
TFC, through its subsidiary, Truist Insurance Holdings, entered an agreement to buy the nation’s largest benefits wholesale general agency, BenefitMall, from funds managed by The Carlyle Group Inc. While the financial terms of the deal have not been disclosed yet, the transaction is expected to close in the third quarter of 2022.
The acquisition is expected to add $150 million in annual revenues to Truist Insurance Holdings’ wholesale division.
Likewise, Citizens Financial is on a buyout spree. This July, the company announced plans to acquire Paladin Advisors, an independent, registered investment advisor, to strengthen its private wealth management business.
Earlier, CFG closed the acquisitions of DH Capital LLC and Investors Bancorp. In February, it closed the buyout of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. These and other buyouts enable the company to expand its product capabilities and geographic reach.
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TowneBank (TOWN) to Acquire Farmers Bankshares for $56 Million
TowneBank (TOWN - Free Report) has signed a deal worth $56 million or $17.82 per share to acquire Farmers Bankshares, Inc. and its subsidiary Farmers Bank. The closing of the deal, subject to customary conditions, including regulatory approval and the approval of Farmers Bankshares’ shareholders, is expected in the first quarter of 2023.
The transaction is expected to solidify TowneBank’s number one market share in the Virginia Beach-Norfolk-Newport News, MSA. Moreover, with the acquisition, TOWN will be able to expand Towne Insurance revenues.
Per the terms of the deal, shareholders of Farmers Bankshares will receive 0.6050 shares of TowneBank common stock for each of their shares owned.
Based on financials as of Jun 30, 2022, the combined company will have total assets worth $17.5 billion, loans worth $10.9 billion and deposits worth $14.5 billion.
TowneBank anticipates the merger to be 5% accretive to earnings per share, with fully phased-in cost savings on a GAAP basis.
A tangible book value dilution per common share impact of less than 3% on a GAAP basis is expected.
G. Robert Aston, Jr., executive chairman of TowneBank, stated, “Our TowneBank family is humbled and excited to join hands with our long-time friends at Farmers. We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper.”
Vernon Towler, CEO of Farmers Bankshares, said, “We feel privileged to partner with our neighbors at TowneBank. They share with Farmers Bank a commitment to philanthropy and community engagement. TowneBank is an incredibly strong organization.”
Over the past year, shares of TOWN have lost 0.9% against the industry’s growth of 7.7%.
Image Source: Zacks Investment Research
Inorganic Growth Efforts by Other Finance Companies
Truist Financial (TFC - Free Report) and Citizens Financial Group, Inc. (CFG - Free Report) have been undertaking opportunistic acquisitions to diversify revenues and improve market share. Both companies currently have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TFC, through its subsidiary, Truist Insurance Holdings, entered an agreement to buy the nation’s largest benefits wholesale general agency, BenefitMall, from funds managed by The Carlyle Group Inc. While the financial terms of the deal have not been disclosed yet, the transaction is expected to close in the third quarter of 2022.
The acquisition is expected to add $150 million in annual revenues to Truist Insurance Holdings’ wholesale division.
Likewise, Citizens Financial is on a buyout spree. This July, the company announced plans to acquire Paladin Advisors, an independent, registered investment advisor, to strengthen its private wealth management business.
Earlier, CFG closed the acquisitions of DH Capital LLC and Investors Bancorp. In February, it closed the buyout of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. These and other buyouts enable the company to expand its product capabilities and geographic reach.