TowneBank, Farmers Bank expected to complete merger in early January
Published 8:53 pm Friday, December 16, 2022
Hampton Roads-based TowneBank and Farmers Bankshares Inc., the Windsor-based parent company of Farmers Bank, announced Friday, Dec. 16, that they expect to complete their merger in early January 2023 as originally scheduled.
In August, Townebank reported that the merger was expected to close in the first quarter of 2023, subject to regulatory approval and the approval of Farmers’ shareholders.
The Dec. 16 joint news release stated that the parties have received all required regulatory approvals, and the merger received the approval of Farmers Bankshares’ shareholders, with more than 85% of the outstanding shares voting for the merger at a special meeting of shareholders held on Dec. 14.
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The merger, according to the news release, will solidify TowneBank’s No. 1 market share in the Virginia Beach-Norfolk-Newport News Metropolitan Statistical Area, adding Isle of Wight and Southampton counties to the bank’s service area while expanding Towne Insurance Agency’s market base.
The closing of the merger remains subject to the terms and conditions of the definitive merger agreement that the parties signed in August, including customary closing conditions in addition to the regulatory and shareholder approvals, the release stated.
The merger marks the end of an era for the last remaining Isle of Wight County-based bank, founded 103 years ago in Windsor.
“Our TowneBank family is humbled and excited to join hands with our long-time friends at Farmers,” TowneBank Executive Chairman G. Robert Aston Jr. said via the August news release. “We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper.”
Aston told the Suffolk News-Herald on Aug. 19 that Farmers Bank offices in Virginia Beach, Chesapeake and the Harbour View area of Suffolk will close and consolidate with nearby TowneBank offices. The remaining Farmers offices, including in Windsor and Smithfield, will eventually be rebranded as TowneBank but remain open. Aston doesn’t anticipate any reduction in personnel.
TowneBank, which operates the fifth-largest bank-owned insurance agency in the nation according to Aston, will gain 72% ownership in Manry-Rawls, a Franklin-based insurance company, via the merger.
“That should take our insurance revenue up to somewhere in the neighborhood of $85 to $86 million,” Aston said.
Based on financials reported on June 30, the combined companies would have total assets of $17.5 billion, loans of $10.9 billion and deposits of $14.5 billion, the press release states. According to Farmers Bankshares’ annual report, as of Dec. 31, 2021, Farmers had $623 million in total assets, $255 million in total loans and $531 million in total deposits.
“We feel privileged to partner with our neighbors at TowneBank,” Farmers CEO Vernon Towler said in the press release announcing the sale. “They share with Farmers Bank a commitment to philanthropy and community engagement. TowneBank is an incredibly strong organization.”
The August merger announcement came in the wake of a months-long power struggle between Farmers’ management and the bank’s former board chairman, Richard “Dick” Holland Jr.
Holland, whose family founded Farmers, was ousted as chairman of Farmers Bankshares’ board in February over a disagreement as to how aggressively to pursue a sale or merger of the company.
Farmers Bankshares’ board had elected William A. Gwaltney Jr. in Holland’s place as chairman in February. Holland had contended in a March 8 letter to shareholders that he’d “lost all confidence” in the current board and believed his investment as one of the bank’s largest shareholders “would be best protected by a sale or merger of the company.”
Towler’s Aug. 18 remarks on the TowneBank merger are a sharp departure from a Feb. 28 shareholders letter he’d signed arguing in favor of the bank “staying independent.” Aston told the News-Herald in August that the merger had come about at Farmers’ request, with negotiations beginning six to eight weeks prior.
“We were fortunate to be the one that they chose,” Aston said.