Two banks with a presence in Isle of Wight County have declared their intent to merge.

Suffolk-based TowneBank, which operates branches in Smithfield and Windsor, announced the signing on April 3 of a merger agreement to acquire Hampton-based Old Point National Bank. Old Point operates branches in Carrollton and Windsor.

According to the two banks’ joint news release the combined company would have $19.5 billion in total assets, $13.1 billion in loans and $16.3 billion in deposits. TowneBank had assets totaling $17.25 billion as of Dec. 31 across more than 50 banking offices throughout Virginia and North Carolina and its affiliated companies: Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, berkshire Hathaway HOme Services RW Towne Realty, Towne 1031 Exchange LLC and Towne Vacations.

Old Point’s fourth-quarter and year-end 2024 report lists $1.5 billion in total assets as of Dec. 31. Old Point operates 13 branch offices, Old Point Mortgage and Old Point Insurance LLC in partnership with Morgan Marrow Co.

It’s TowneBank’s third merger in two years.

TowneBank previously announced on March 11 that the Federal Deposit Insurance Corporation and the Virginia State Corporation Commission had approved the regulatory applications filed in connection with TowneBank’s acquisition of Midlothian-headquartered Village Bank and Trust Financial Corp. In early 2023, TowneBank merged with the former Windsor-based Farmers Bank, expanding its footprint into Isle of Wight County.

Old Point was founded in 1923, according to its website.

“We are excited to partner with Old Point and welcome its talented team into our TowneBank family,” said TowneBank Executive Chairman G. Robert Aston Jr. “Old Point has legendary status here in our community and most especially, in Hampton, Virginia where it was founded over 100 years ago. I have the deepest respect for the Shuford family that has guided Old Point throughout the years with the highest of character and unwavering integrity. Joining our two banking families together will create a combined franchise with a strong core deposit base, outstanding credit quality, and substantial synergies that will generate top tier financial performance for our shareholders while helping our communities grow and prosper.”

“Great competition builds better companies and TowneBank has raised the bar high – to the benefit of Old Point,” said Old Point Chairman, President and CEO Robert Shuford Jr. “Under Bob Aston’s leadership, they have built an incredible franchise. Together, we will bring expanded relationships and services to our communities, enhanced opportunities for our employees, and significant value for our shareholders. We are excited about this partnership and the opportunity to bring together the Old Point and TowneBank families.”

Under the terms of the agreement, shareholders of Old Point will elect to receive either $41 in cash or 1.14 shares of TowneBank common stock for each share of Old Point outstanding common stock.

According to the news release, this corresponds to an aggregate transaction value of approximately $203 million, based on Old Point common stock currently outstanding. Old Point shareholders will have the right to elect cash or stock consideration so long as the total stock consideration issued represents between 50% and 60% of the total consideration paid.

TowneBank’s stock, which trades on Nasdaq under the ticker symbol “TOWN,” was trading at $30.87 by the 4 p.m. close of the market on April 3, down 8.9% from $33.90 as of 4 p.m. on April 2 and a year-to-date high of $37.51 on Feb. 18. Old Point, which trades on Nasdaq under the ticker symbol “OPOF,” was trading at $36.82 per share as of 4 p.m. on April 2, up 23% from $29.91 as of 4 p.m. on April 2. It’s a year-to-date high from the $25.89 per share recorded on Jan. 2.

TowneBank expects the merger to be approximately 10% accretive to earnings per share. 

According to Investopedia, a financial literacy website, a merger is said to be accretive if the acquiring firm’s earnings per share increase after the deal goes through. If the deal causes the acquiring firm’s earnings per share to decline, the merger is said to be dilutive.

The merger was recently approved by the boards of directors of Old Point and TowneBank. The transaction is expected to close in the second half of 2025 and is subject to regulatory approval, as well as the approval of Old Point’s shareholders.

Piper Sandler & Co. served as the financial adviser and Wachtell, Lipton, Rosen & Katz served as lead legal counsel with Williams Mullen as local counsel to TowneBank in the transaction. Keefe, Bruyette & Woods and Stifel served as the financial advisor and Troutman Pepper Locke LLP served as legal counsel to Old Point in the transaction.