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TowneBank to Buy Dogwood for $476.2M, Expand Presence in Carolinas
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Key Takeaways
TowneBank is buying Dogwood for $476.2M in a stock deal valued at $25.04 per share.
The deal is expected to bring 35% cost savings, with most realized in 2026.
TowneBank projects an 8% EPS accretion by 2027, with book value dilution earn-back in under 4 years.
In an effort to expand its presence throughout the high-growth markets in the Carolinas, TowneBank (TOWN - Free Report) has entered an agreement to acquire Dogwood State Bank. The closing of the transaction, expected in early 2026, is subject to customary conditions, including regulatory approval, as well as the approval of Dogwood’s shareholders.
Steve Jones, the CEO of Dogwood, will continue in a key leadership role within the combined company and will join TowneBank as the president of its North Carolina and South Carolina banking operations.
G. Robert Aston, Jr., the executive chairman of TowneBank, stated, “It has been my pleasure to know Steve for a number of years and we have always admired the great job he and his team have done building Dogwood State Bank. We are excited to have Steve and his talented teammates join hands and hearts with our Towne family to take our Main Street Bank forward in the fast-growing North Carolina and South Carolina markets.”
Terms & Financial Impact of the TOWN- Dogwood Deal
Per the deal, shareholders of Dogwood will receive a fixed exchange ratio of 0.700 shares of TowneBank common stock for each of their outstanding shares. This translates into a deal value of $25.04 per share or $476.2 million.
The transaction is expected to result in one-time merger and integration costs (pre-tax) of $45 million. Cost savings worth 35% of non-interest expenses are expected. Of this, 75% is expected to be realized in 2026 and 100% thereafter.
TowneBank expects the acquisition to be 8% accretive to its earnings per share in 2027. Tangible book value per share dilution of 6% is expected at closing, with an earn-back period of less than 4 years.
TOWN’s acquisition of Dogwood is expected to enhance the former’s position as one of the premier regional banking companies in the Southeast.
TowneBank’s Price Performance & Zacks Rank
So far this year, shares of TOWN have gained 3.9%, outperforming the industry’s 1.8% growth.
Inorganic Expansion Efforts by Other Finance Firms
A few days ago, First Financial Bancorp (FFBC - Free Report) entered an agreement to acquire BankFinancial Corporation (BFIN - Free Report) , a Chicago-based financial institution, in an all-stock transaction valued at $142 million. The move aligns with FFBC’s strategic focus on strengthening its footprint in the Chicagoland market and enhancing its service offerings.
Under the terms of the agreement, BankFinancial shareholders will receive 0.48 shares of First Financial for each share they hold. The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and shareholder consent.
Upon completion, BankFinancial’s consumer and wealth management services, along with selected commercial credit lines, will be integrated into the existing operations of First Financial. All BankFinancial employees will transition to First Financial, ensuring continuity in client relationships and community engagement.
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TowneBank to Buy Dogwood for $476.2M, Expand Presence in Carolinas
Key Takeaways
In an effort to expand its presence throughout the high-growth markets in the Carolinas, TowneBank (TOWN - Free Report) has entered an agreement to acquire Dogwood State Bank. The closing of the transaction, expected in early 2026, is subject to customary conditions, including regulatory approval, as well as the approval of Dogwood’s shareholders.
Steve Jones, the CEO of Dogwood, will continue in a key leadership role within the combined company and will join TowneBank as the president of its North Carolina and South Carolina banking operations.
G. Robert Aston, Jr., the executive chairman of TowneBank, stated, “It has been my pleasure to know Steve for a number of years and we have always admired the great job he and his team have done building Dogwood State Bank. We are excited to have Steve and his talented teammates join hands and hearts with our Towne family to take our Main Street Bank forward in the fast-growing North Carolina and South Carolina markets.”
Terms & Financial Impact of the TOWN- Dogwood Deal
Per the deal, shareholders of Dogwood will receive a fixed exchange ratio of 0.700 shares of TowneBank common stock for each of their outstanding shares. This translates into a deal value of $25.04 per share or $476.2 million.
The transaction is expected to result in one-time merger and integration costs (pre-tax) of $45 million. Cost savings worth 35% of non-interest expenses are expected. Of this, 75% is expected to be realized in 2026 and 100% thereafter.
TowneBank expects the acquisition to be 8% accretive to its earnings per share in 2027. Tangible book value per share dilution of 6% is expected at closing, with an earn-back period of less than 4 years.
TOWN’s acquisition of Dogwood is expected to enhance the former’s position as one of the premier regional banking companies in the Southeast.
TowneBank’s Price Performance & Zacks Rank
So far this year, shares of TOWN have gained 3.9%, outperforming the industry’s 1.8% growth.
Image Source: Zacks Investment Research
Currently, TOWN carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Finance Firms
A few days ago, First Financial Bancorp (FFBC - Free Report) entered an agreement to acquire BankFinancial Corporation (BFIN - Free Report) , a Chicago-based financial institution, in an all-stock transaction valued at $142 million. The move aligns with FFBC’s strategic focus on strengthening its footprint in the Chicagoland market and enhancing its service offerings.
Under the terms of the agreement, BankFinancial shareholders will receive 0.48 shares of First Financial for each share they hold. The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and shareholder consent.
Upon completion, BankFinancial’s consumer and wealth management services, along with selected commercial credit lines, will be integrated into the existing operations of First Financial. All BankFinancial employees will transition to First Financial, ensuring continuity in client relationships and community engagement.