TowneBank to acquire Monarch Financial in deal worth $220.6 million
Portsmouth-based TowneBank plans to acquire Chesapeake-based Monarch Financial Holdings Inc., the parent company of Monarch Bank, in a deal worth $220.6 million.
The acquisition would create a $7.3 billion bank with 20.6 percent of bank deposits in the Hampton Roads market.
Under the terms of the deal, Monarch common stock shareholders will receive 0.8830 shares of TowneBank common stock for each their shares.
Based on TowneBank’s closing stock price of $21.03 on Wednesday, the value per share is $18.57.
The final value of the deal will be determined by the price of Towne Bank common stock at the closing date, which is expected to be in the second quarter of 2016. The merger is subject to shareholder and regulatory approvals.
“Since the founding of our two banks in 1998, our companies have been built around the values of ‘serving others and enriching lives’ while striving to build a great community asset that will help our communities grow and prosper,” G. Robert Aston, Jr., the chairman and CEO of TowneBank, said in a statement.
Based on financials reported on Sept. 30, the combined company would have total assets of $7.3 billion, deposits of $5.8 billion and loans of $5.4 billion.
Brad E. Schwartz, Monarch’s CEO, will join TowneBank as senior executive vice president and chief operating officer.
Neal Crawford, Monarch Bank’s president, will become president and CEO of Towne Financial Services Group.
William T. Morrison, CEO of Monarch Mortgage will become chairman and CEO of TowneBank Mortgage and Realty Group succeeding Jacqueline B. Amato, currently TowneBank Mortgage CEO, who is planning to retire at the end of 2016.
Monarch Chairman Jeffrey F. Benson will join the TowneBank corporate board.
Monarch directors, Virginia Sancilio Cross, Taylor B. Grissom, Lawton H. Baker and Joe P. Covington will be elected to the Towne Financial Services Group board of directors.