First Bank to acquire The Bank of Fincastle

Transaction to create bank with $1.2B in assets

Published February 19, 2021 by Sydney Lake

Strasburg-based First National Corp. (the bank holding company of First Bank) announced Thursday it will acquire The Bank of Fincastle.

Financial terms of the transaction were not released, but the combined bank is expected to have approximately $1.2 billion in assets, $868 million in loans, $1 billion in deposits and 20 branch offices across Virginia.

“With this combination, First Bank will extend its reach from the top of Virginia south down the I-81 corridor to Roanoke, ensuring our small and mid-sized Virginia markets continue to be served by an independent Virginia community bank,” First National President and CEO Scott Harvard said in a statement.

Under the transaction, First National will acquire Fincastle for a combination of stock and cash valued at approximately $3.09 per share. 

Founded in 1875 and based in Botetourt County, The Bank of Fincastle currently operates six locations in the Roanoke region. As of Dec. 31, 2020, it reported $256 million in assets.

“I am enthusiastic about the opportunity we have to partner with First National in a transaction that we believe offers significant opportunities to our clients, communities, employees and shareholders,” Fincastle President and CEO Scott Steele said in a statement. “This partnership is an excellent opportunity to create value for both institutions.”

The transaction is expected to close during the third quarter of 2021 and has been approved by the boards of each company. First National and First Bank will appoint three Fincastle directors to join the board. Steele will join First Bank as regional president. 

Piper Sandler & Co. served as financial adviser and Nelson Mullins Riley & Scarborough LLP provided legal counsel to First National for the transaction. Janney Montgomery Scott LLC served as financial adviser, RP Financial LC served as fairness adviser and Godfrey & Kahn, S.C. served as legal counsel to Fincastle.

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