Virginia banks announce plans to merge
Virginia National Bankshares in Charlottesville has agreed to buy Fauquier Bankshares in Warrenton, Va.
The $796 million million-asset Virginia National said in a press release Thursday that it will pay $63.4 million in stock for the $829 million-asset Fauquier. The deal is expected to close in the first half of 2021.
Virginia National shareholders will own about 51.4% of the company.
The company, which would operate as Virginia National and remain based in Charlottesville, would have $1.4 billion in total deposits, $1.3 billion in loans and more than $1 billion in assets under management. The companies said the merger should accelerate expansion efforts in Richmond and northern Virginia.
“It is a rare opportunity to have two well-respected community banks of equal size in attractive markets put their individual missions aside to join forces in order to improve the experience of clients and employees and accelerate the returns of their shareholders,” Glenn Rust, Virginia National’s president and CEO, said in the release.
“There is a long-standing mutual respect between our two companies,” Marc Bogan, Fauquier’s president and CEO. “The enhanced scale and complementary business lines resulting from this transaction provides the best opportunity for both banks to better serve our major constituencies.”
The deal is expected to be 25% accretive to Virginia National’s earnings per share. It will likely take the company four years to earn back any dilution to its tangible book value.
Virginia National plans to cut about a third of Fauquier’s annual noninterest expenses, or $7 million a year. The company expects to incur $7 million in merger-related expenses.
The board will have seven Virginia National directors and six members from Fauquier, including Bogan. William Dittmar Jr. will remain chairman, while John Adams Jr., Fauquier’s chairman, will become vice chairman.
Rust will remain Virginia National’s president and CEO, while Bogan will have the same titles at the bank level.
Performance Trust Capital Partners and Williams Mullen advised Virginia National. Piper Sandler and Troutman Pepper advised Fauquier.