TowneBank to Acquire Old Point Financial Corp. in Significant Deal
Merger of Virginia Banks Valued at $203 Million Announced
TowneBank, a regional bank serving Hampton Roads and central Virginia, as well as northeastern and central North Carolina, has agreed to a $203 million deal to acquire Old Point Financial Corp. The deal, subject to regulatory and shareholder approvals, is expected to close in the second half of 2025.
Old Point Financial Corp. is the holding company of The Old Point National Bank of Phoebus and Old Point Trust & Financial Services. The acquisition will add 13 Old Point Financial branches to TowneBank's existing 62 branches, expanding its footprint in the region.
The deal is expected to be approximately 10% accretive to TowneBank's earnings per share once cost savings are fully implemented. It will add $1.5 billion in Old Point's assets to TowneBank's portfolio, resulting in total assets of $19.5 billion, loans of $13.1 billion, and total deposits of $16.3 billion for the combined entity.
G. Robert Aston Jr., executive chairman of TowneBank, stated that the merger will generate top-tier financial performance. The deal provides a low-cost deposit base for TowneBank, which is a strategic advantage in the current financial landscape.
Old Point shareholders can choose between receiving $41 in cash or 1.1400 shares of TowneBank common stock per share of Old Point outstanding common stock. Approximately 75% of the cost savings are expected to be realized by 2026, with TowneBank estimating around 10% fully phased-in earnings per share accretion by 2026.
The regulatory environment for bank mergers and acquisitions has been influenced by the Biden administration's policies, which have been more restrictive towards consolidation. However, recent commentary from the FDIC suggests less scrutiny on in-market deals, as shown by the approval of Renasant Corp.'s bid to acquire smaller Mississippi rival The First Bancshares for about $1.2 billion.
This week, Equity Bancshares inked a $86.9 million deal with NBC Corp., and HomeStreet agreed to merge with Mechanics Bank in a transaction that values the Seattle-based lender at around $300 million. The deal between TowneBank and Old Point Financial has a significant branch overlap, with estimated 45% cost savings.
Robert F. Shuford Jr., chairman and CEO of Old Point, stated that TowneBank has raised the bar high, to the benefit of Old Point. The acquisition is expected to result in 6% tangible book value dilution.
TowneBank recently completed the acquisition of Village Bank and Trust Financial Corp. The current trend in bank mergers and acquisitions indicates a slowdown in consolidation activity, but the industry is poised for increased consolidation as regulatory dynamics normalize and institutions seek strategic growth through in-market deals. However, recent economic uncertainty and indirect effects of tariff volatility might dampen some M&A activity.
The acquisition of Old Point Financial Corp. by TowneBank will add $1.5 billion in assets to TowneBank's portfolio, demonstrating a strategic growth in the business and finance industry. This deal, which includes 13 branches from Old Point Financial, is expected to generate top-tier financial performance and provide a low-cost deposit base for TowneBank, giving them a competitive edge in the current financial landscape.
