TowneBank (NasdaqGS:TOWN) signed a definitive agreement to acquire Farmers Bankshares, Inc. (OTCPK:FBVA) for $59.4 million on August 18, 2022. Under the terms of the agreement, shareholders of Farmers will receive 0.6050 shares of TowneBank common stock for each share of Farmers owned. This implies a deal value per share of $17.82, or approximately $56 million. Farmers Bankshares, Inc. and Farmers Bank, will merge with and into TowneBank post deal completion. Farmers shall pay a termination fee of $2.95 million to TowneBank. Following completion of the deal, Thomas Woodward will serve as President, TowneBank – Suffolk, Chad Rountree will serve as Senior Vice President, Western Tidewater Market Leader, and Kelley Healey will serve as Senior Vice President, Smithfield Market Leader.

The deal is subject to customary conditions, including regulatory approval, the shares of the Towne Common Stock to be issued to the holders of Farmers Bankshares Common Stock upon consummation of the Merger shall have been authorized for listing on the Nasdaq Global Select Market, not more than 10% of the outstanding shares of Farmers Bankshares Common Stock shall constitute Dissenting Shares as well as the approval of Farmers's shareholders. The agreement was unanimously approved by the boards of directors of Farmers and TowneBank. As of December 14, 2022, the transaction has been approved by Farmers Bankshares shareholders. The deal is expected to close in the first quarter of 2023. As of December 16, 2022, Farmers Bank expect to complete their merger in early January 2023. TowneBank expects the merger to be approximately 5% accretive to earnings per share with fully phased-in cost savings on a GAAP basis.

Raymond James & Associates, Inc. served as the financial advisor and John M. Ramirez and Gregory F. Parisi of Troutman Pepper Hamilton Sanders LLP served as legal counsel to TowneBank in the transaction. Piper Sandler & Co. served as the financial advisor and fairness opinion provider and Lee G. Lester and Scott H. Richter of Williams Mullen served as legal counsel to Farmers Bankshares in the transaction.