American National Bankshares in Danville, Va., has agreed to buy HomeTown Bankshares in Roanoke, Va.
The $1.8 billion-asset American National said in a press release Monday that it will pay $95.6 million in stock for the $558 million-asset HomeTown. The acquisition, which is expected to close in the first quarter, priced HomeTown at 182% of its tangible book value.
The acquisition "will create a company that is better positioned to serve the needs of those communities,” Jeffrey Haley, American National's president and CEO, said in the release. “By combining our highly qualified and dedicated teams, we believe we will be the community bank of choice for businesses and individuals in this area.”
American National said Roanoke will serve as its Virginia banking headquarters and the center for its corporate credit functions. The company will keep its North Carolina banking headquarters in Greensboro. Danville will remain its corporate headquarters.
Susan Still, HomeTown's president and CEO, will serve as American National's president of Virginia banking until she retires at the end of 2019. Three HomeTown directors, including Still, will join American National's board.
American National said it expects to incur $12.1 million in merger-related expenses. The company plans to cut about 40% of HomeTown's annual noninterest expenses.
The deal should be 11% accretive to American National's earning per year in the first full year of combined operations. It should take about three years for American National to earn back any dilution to its tangible book value.
Keefe, Bruyette & Woods and Williams Mullen advised American National. Sandler O’Neill and Gentry Locke advised HomeTown.
