First national company to acquire the Bank of
STRASBURG, Va. And FINCASTLE, Va., February 18, 2021 (GLOBE NEWSWIRE) – First National Corporation (the “Company” or “First National”) (NASDAQ: FXNC), the banking holding company of First Bank (“First Bank”) and The Bank of Fincastle (“Fincastle”) (OTCPK: BFTL) jointly announced today that they have entered into a definitive merger agreement.
Upon completion of the acquisition, the combined company is expected to have approximately $ 1.2 billion in assets, $ 868 million in loans, $ 1.0 billion in deposits and 20 branches across Virginia. First National expects the transaction to generate around 10% of earnings per share.
Commenting on the announcement, Scott Harvard, President and CEO of First National Corporation, said, “We are delighted to partner with another deeply rooted bank in its community, which began operating in the town of Fincastle in 1875. Together, our team of bankers will provide unparalleled service to our clients and communities and continue to make these communities better places to live and work. With this combination, First Bank will extend its reach from the top of Virginia in the south to the I-81 corridor to Roanoke, ensuring that our small and mid-sized Virginia markets continue to be served by an independent community bank of Virginia. “
First National will acquire Fincastle for a combination of stock and cash valued at approximately $ 3.09 per share for each outstanding common share of Fincastle. Under the terms of the agreement, Fincastle shareholders could elect, for each common share of Fincastle, to receive 0.1649 First National shares, or $ 3.30 in cash, or a combination of shares and cash, under the terms of the agreement. reserve a choice and proration such that the aggregate consideration will consist of 80 percent First National shares and 20 percent cash. Based on the closing First National share price of $ 18.40 as of February 17, 2021, this equates to a total transaction value of approximately $ 31.6 million.
Founded in 1875, the Bank of Fincastle currently operates six bank branches in and around the Metropolitan Statistical Area of Roanoke. As of December 31, 2020, Fincastle was reporting assets of $ 256 million, gross loans of $ 202 million, and deposits of $ 224 million.
Scott Steele, President and CEO of Fincastle, said: “I am excited about the opportunity we have to partner with First National in a transaction that we believe offers significant opportunities to our customers, communities, employees and shareholders. This partnership is an excellent opportunity to create value for both institutions.
The merger treaty was unanimously approved by the boards of directors of each company. The transaction is expected to close in the third quarter of 2021, subject to approval by shareholders of both companies, regulatory approvals and other customary closing conditions.
First National and First Bank will appoint three directors of Fincastle to join the eight existing directors on each respective board of directors. Scott Steele, President and CEO of Fincastle, will join First Bank as Regional President of First Bank.
Piper Sandler & Co. acted as financial advisor and Nelson Mullins Riley & Scarborough, LLP provided legal advice to First National. Janney Montgomery Scott LLC acted as financial advisor, RP Financial, LC as equity advisor and Godfrey & Kahn, SC as legal advisor to Fincastle.
ABOUT FIRST NATIONAL CORPORATION
First National Corporation (NASDAQ: FXNC) is the parent company and banking holding company of First Bank, a community bank that opened in 1907 in Strasbourg, Virginia. First Bank offers loan and deposit products and services through its website, www.fbvirginia.com, its mobile banking platform, a network of ATMs located throughout its market area, a loan production office, a customer service center in a retirement community and 14 bank branches located in the Shenandoah Valley, the central areas of Virginia and in the city of Richmond. In addition to providing traditional banking services, First Bank operates a wealth management division under the name First Bank Wealth Management. First Bank also owns First Bank Financial Services, Inc., which invests in entities that provide investment services and title insurance.
ABOUT FINCASTLE BANK
The Bank of Fincastle has been a leading provider of financial services in the Roanoke area since 1875 and offers a full range of banking, lending and investing products. Based in Fincastle, Va., The bank has six full-service branches, 13 ATMs, 7 a.m. to 7 p.m. in-car service, and offers online deposit accounts, loan applications. real estate and consumer online, online banking, mobile banking and 24/7 telephone banking. The Bank of Fincastle is a member of the FDIC, Equal Housing Lender and Equal Opportunity Employer.
ADDITIONAL INFORMATION ON THE ACQUISITION AND WHERE TO FIND IT
In connection with the proposed merger, First National will file with the United States Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4, which will include a joint power of attorney from First National and Fincastle. and a prospectus from First National National, as well as other relevant documents relating to the proposed transaction.
FIRST NATIONAL AND FINCASTLE SHAREHOLDERS ARE ADVISED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY / PROSPECTUS STATEMENT WHEN THEY BECOME AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC, AS WELL AS SUCH OR ANY AMENDED DOCUMENTS. , DUE TO IMPORTANT INFORMATION CONCERNING FIRST NATIONAL, FINCASTLE AND THE PROPOSED MERGER TRANSACTION.
Shareholders can obtain free copies of these documents, once they are filed, and other documents filed with the SEC on the SEC website at http://www.sec.gov. Shareholders will also be able to obtain these documents, once they have been filed, free of charge, by requesting them in writing from Scott C. Harvard, First National Corporation, 112 West King Street, Strasburg, Virginia 22657, or by telephone at (540 ) 465-9121, or from C. Scott Steele, The Bank of Fincastle, 17 South Roanoke Street, Fincastle, Virginia 24090, or by phone at (540) 473-2761.
First National, Fincastle and their respective directors and officers may be considered participants in the solicitation of proxies from the shareholders of First National and Fincastle in connection with the proposed merger. Information about the directors and officers of First National and Fincastle will be included in the Management Proxy Circular / Joint Prospectus when available. Additional information regarding the interests of such persons and other persons who may be considered to be participants in the transaction can be obtained by reading the proxy circular / joint prospectus relating to the proposed merger when it becomes available. You can get free copies of each document as described in the previous paragraph.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities or a solicitation of a vote or proxy in favor of the merger, the merger agreement or the transactions contemplated by it, and there will also be no sale of securities in any jurisdiction in which such offering, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
Certain information in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to our plans, objectives, expectations and intentions, are not historical facts and are identified by words such as “believes”, “expects”, “anticipate”, “estimate”, “have intention ”,”, “targets” and “projects”, as well as a similar expression. Although the Company believes that its expectations with respect to forward-looking statements are based on reliable assumptions within the limits of its knowledge of its business and operations, there can be no assurance that the actual results, performance or achievements of the Company will not will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including the rapidly evolving uncertainties associated with the COVID-19 pandemic and its potential negative effects on the economy, our employees and customers, and our financial performance. . For more details on other factors that could affect expectations, see the risk factors and other caveats included in the company’s annual report on Form 10-K for the fiscal year ended December 31, 2019 and other documents filed with the SEC.
In addition to factors previously disclosed in reports filed by the Company with the SEC, additional risks and uncertainties may include, but are not limited to: (1) the risk that cost savings and revenue synergies resulting from the proposed merger are not completed or take longer than expected to be completed, (2) the disruption of the proposed merger of customer, supplier, employee or other business partner relationships, (3) the occurrence of any event, change or other circumstance which could result in termination of the merger agreement, (4) failure to obtain the necessary approval from the shareholders of Fincastle and the Company, (5) the possibility that the costs, fees, expenses and charges relating to the proposed merger are higher than expected, (6) the Company’s ability to obtain the required government approvals for the proposed merger, (7) the reputational risk and the reaction of customers, suppliers, e employees or other business partners of each of the parties. partners in the proposed merger, (8) non-compliance with the closing conditions of the merger agreement, or any unexpected delay in the closing of the proposed merger, (9) risks related to the integration of Fincastle’s activities in the company’s activities, including the risk that such integration will be significantly delayed or be more costly or difficult than expected, (10) the risk of potential litigation or regulatory actions related to the proposed merger, (11 ) the risk of expansion into new geographies or product markets, (12) the dilution caused by the issuance by the Company of additional shares of its ordinary shares as part of the proposed merger, and (13) the general competitive, economic, political and market conditions. Additional factors which could cause results to differ materially from those described in forward-looking statements may be found in Company reports (such as annual report on Form 10-K, quarterly reports on Form 10- Q and current reports on Form 8 -K) filed with the SEC and available on the SEC’s website (http://www.sec.gov). All subsequent written and oral forward-looking statements regarding the Company, Fincastle or any person acting on their behalf are expressly qualified in their entirety by the above cautionary statements. Neither the Company nor Fincastle undertakes to update any forward-looking statements to reflect circumstances or events that occur after the date on which the forward-looking statements are made.