City Holding (CHCO) in Cross Lanes, W.Va., continues to bulk up in Virginia, announcing late Thursday that it is buying Community Financial (CFFC) in Staunton for $26.1 million in stock.
The $2.8 billion-asset parent of City National Bank entered Virginia in June when it bought Front Royal-based Virginia Savings Bank, which had five branches and $130 million of assets.
The deal for the $507 million-asset Community would give City Holding an additional nine branches along the Interstate 81 corridor in western Virginia, an area that President and Chief Executive Charles R. Hageboeck had previously identified as a potential growth area for his bank. Community also has branches in Virginia Beach.
City Holding currently has more than 70 branches throughout West Virginia, Kentucky, Virginia and Ohio.
In a news release, Hageboeck said his bank was drawn to Community because it has a "solid retail deposit franchise, operates in markets with higher growth rates than City's core markets, and has established itself as a significant commercial lender in both the Staunton and Virginia Beach markets."
Community, meanwhile, opted to sell itself due to increased regulatory requirements and expense and lack of significant economic growth since 2008, Norman C. Smiley 3rd, its president and CEO, said in a news release.
Under the agreement, Community shareholders would receive nearly 18 shares of City Holding common stock for each 100 Community shares owned. Based on the closing price of City Holding's stock on July 27, the deal values Community's shares at about $6 each.
Keefe, Bruyette & Woods served as financial advisor to City while Jackson Kelly was legal advisor. Scott & Stringfellow was financial advisor and Silver, Freedman & Taff was legal advisor to Community.
The deal is expected to be completed in the first quarter of 2013.