TowneBank strikes $56 million deal to buy Virginia rival

TowneBank in Suffolk, Virginia, agreed to acquire Farmers Bankshares in Windsor, Virginia.

The $16.9 billion-asset TowneBank said it will pay $56 million in stock for Farmers. The deal is expected to close in the first quarter of 2023.

The $609 million-asset Farmers operates eight branches and serves areas throughout the Tidewater region of Virginia.

The combined company is expected to have total assets of $17.5 billion, loans of $10.9 billion and deposits of $14.5 billion.

"We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper," Robert Aston Jr., executive chairman of TowneBank, said in a press release Thursday.

TowneBank said it expects the deal to be about 5% accretive to earnings per share after all cost savings are realized in 2024. It projected savings of 35% of the banks' noninterest expense base.

The buyer expects tangible book value dilution per common share impact to be less than 3% and expects to earn back the dilution within three years.