TowneBank Announces Agreement to Acquire Farmers Bankshares, Inc. and Farmers Bank

8/18/2022 | Suffolk, VA
Hampton Roads based TowneBank (NASDAQ: TOWN) and Farmers Bankshares, Inc. (OTCPK: FBVA), the parent company of Farmers Bank, Windsor, Virginia, today announced the signing of a definitive merger agreement pursuant to which Farmers Bankshares, Inc. and Farmers Bank, will merge with and into TowneBank. The proposed transaction will solidify TowneBank’s number one market share in the Virginia Beach-Norfolk-Newport News MSA adding Isle of Wight and Southampton counties to the company’s service area while expanding Towne Insurance revenues.

“Our TowneBank family is humbled and excited to join hands with our long-time friends at Farmers,” said G. Robert Aston, Jr., Executive Chairman of TowneBank. “We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper.”

“We feel privileged to partner with our neighbors at TowneBank,” stated Vernon Towler, CEO of Farmers. “They share with Farmers Bank a commitment to philanthropy and community engagement. TowneBank is an incredibly strong organization.”

Based on financials reported on June 30, 2022 the combined companies would have total assets of $17.5 billion, loans of $10.9 billion and deposits of $14.5 billion. 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 $56.0 million, based on TowneBank’s 20-day average stock price of $29.46 ending Wednesday, August 17, 2022.

TowneBank expects the merger to be approximately 5% accretive to earnings per share with fully phased-in cost savings on a GAAP basis. TowneBank anticipates the tangible book value dilution per common share impact to be less than 3% on a GAAP basis and accretive excluding accumulated other comprehensive income and interest rate marks impact.

In consideration of the merger, extensive due diligence was performed by the management teams of TowneBank and Farmers. The merger agreement was approved by the boards of directors of Farmers and TowneBank. The merger is expected to close in the first quarter of 2023 and is subject to customary conditions, including regulatory approval as well as the approval of Farmers’s shareholders.

Raymond James & Associates, Inc. served as the financial advisor and Troutman Pepper Hamilton

Sanders LLP served as legal counsel to TowneBank in the transaction. Piper Sandler & Co. served as the financial advisor and Williams Mullen served as legal counsel to Farmers Bankshares in the transaction.

About TowneBank:
Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.

Today, the bank operates over 40 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. Towne has grown its capabilities beyond banking to provide expertise through its controlled divisions and subsidiaries that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $16.9 billion as of June 30, 2022, TowneBank is one of the largest banks headquartered in Virginia.

About Farmers Bankshares, Inc.
Headquartered in Windsor, Virginia, Farmers Bankshares, Inc. is the holding company for Farmers Bank, Windsor, Virginia. Farmers Bank was founded in 1919 and is a community bank which operates eight branches and services areas throughout Tidewater Virginia. Farmers Bankshares, Inc had total assets of $608.6 million as of June 30, 2022. Additional information is available at the company's website,

Media contact:
G. Robert Aston, Jr., Executive Chairman, TowneBank, 757-638-6780
J. Morgan Davis, Chief Executive Officer, TowneBank, 757-673-1673
Vernon M. Towler, Chief Executive Officer, Farmers Bankshares, Inc., 757-242-9312
Investor contact:
William B. Littreal, Chief Financial Officer, TowneBank, 757-638-6813

Important Information and Where to Find It:
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of TowneBank or a solicitation of any vote or approval. Farmers will deliver a definitive proxy statement/offering circular to its shareholders seeking approval of the Merger and related matters. In addition, TowneBank may file other relevant documents concerning the proposed Merger with the Federal Deposit Insurance Corporation (“FDIC”). Before making any voting or investment decision, investors and security holders are urged to read the proxy statement/offering circular and any other relevant documents to be filed with the FDIC in connection with the proposed transaction because they contain important information about TowneBank, Farmers, and the proposed Merger.

Shareholders are also urged to carefully review TowneBank’s public filings with the FDIC, including, but not limited to, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and proxy statements. Free copies of TowneBank’s public filings (when available) may be obtained through the website maintained by the FDIC here. These documents may also be obtained, without charge, from TowneBank here or by directing a request to Investor Relations – TowneBank, 6001 Harbour View Blvd., Suffolk, Virginia 23435. In addition, free copies of the definitive proxy statement/offering circular, when available, may be obtained by directing a request by telephone or mail to Farmers Bankshares, Inc., 50 East Windsor Boulevard, Windsor, Virginia 23487, Attention: Investor Relations (telephone: (757) 242-6111) or by accessing Farmers’ website at The information on TowneBank’s website and Farmers’ website is not, and shall not be deemed to be, a part of this report or incorporated into other filings TowneBank makes with the FDIC.

TowneBank, Farmers, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Farmers in connection with the proposed Merger. Information about the directors and executive officers of Farmers and TowneBank and other persons who may be deemed participants in the solicitation, including their interests in the Merger, will be included in the proxy statement/offering circular when it becomes available. Additional information about the directors and executive officers of TowneBank can be found in TowneBank’s proxy statement in connection with its annual meeting of shareholders, filed with the FDIC on April 18, 2022. Additional information about the directors and executive officers of Farmers can be found in Farmer’s proxy statement in connection with its annual meeting of shareholders, as sent previously to Farmers’ shareholders on or about April 7, 2022.

Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and Farmers and their respective management teams regarding future events, many of which, by their nature, are inherently uncertain and beyond the control of TowneBank and Farmers. Forward-looking statements may be identified by the use of such words as: “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional terms, such as “will,” “would,” “should,” “could,” “may,” “likely,” “probably,” or “possibly.” These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management, including statements about (i) the benefits of the Merger, including future financial and operating results, cost savings, enhancements to revenue and accretion to reported earnings that may be realized from the Merger and (ii) TowneBank’s and Farmers’ plans, objectives, expectations and intentions and other statements contained in the presentation that are not historical facts. In addition, these forward-looking statements are subject to various risks, uncertainties and assumptions with respect to future business strategies and decisions that are subject to change and difficult to predict with regard to timing, extent, likelihood and degree of occurrence. As a result, actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the business of Farmers and Farmers Bank may not be successfully integrated into TowneBank, or such integration may take longer, be more difficult, time-consuming or costly to accomplish than expected; (2) the expected growth opportunities or cost savings from the Merger may not be fully realized or may take longer to realize than expected; (3) deposit attrition, operating costs, customer losses and business disruption following the Merger, including adverse effects on relationships with employees and customers, may be greater than expected; (4) the regulatory approvals required for the Merger may not be obtained on the proposed terms or on the anticipated schedule; (5) the shareholders of Farmers may fail to approve the Merger; (6) economic, legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which TowneBank and Farmers are engaged; (7) the impacts of the ongoing the impact of the COVID-19 pandemic and the associated efforts to limit its spread; (8) competitive pressures in the banking industry that may increase significantly; (9) changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; (10) changes in the credit worthiness of customers and the possible impairment of the collectability of loans; (11) general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; (12) cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; (13) competitors may have greater financial resources and develop products that enable them to compete more successfully; (14) changes in business conditions; (15) changes in the securities market; and (16) changes in the local economies with regard to TowneBank’s and Farmers’ respective market areas.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in TowneBank’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the FDIC and available on the Securities Exchange Act Filing website maintained by the FDIC here. BACK TO NEWS
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