American National Bankshares Inc. and HomeTown Bankshares Corporation Announce Agreement to Merge
12/18/2018
DANVILLE, VA – American National Bankshares Inc. (NASDAQ: AMNB – “American National”), headquartered in Danville, Va., and HomeTown Bankshares Corporation (NASDAQ: HMTA – “HomeTown”), headquartered in Roanoke, Va., today announced the signing of an agreement that calls for HomeTown to merge with American National in a transaction valued at approximately $95.6 million. The combination deepens American National’s footprint in the Roanoke MSA and creates a presence in the New River Valley with an office in Christiansburg, Va. Upon completion of the merger and with two office consolidations, American National will have 8 offices in the combined Roanoke/New River Valley markets with total deposits of over $700 million. Based on financial results as of June 30, 2018, the combined company will have approximately $2.4 billion in assets, $1.8 billion in loans, and $2.0 billion in deposits across Virginia and North Carolina.
Under the terms of the agreement, HomeTown shareholders will receive 0.4150 shares of American National common stock for each share of HomeTown common stock. As of the close of business on October 1, 2018, the per share acquisition price equaled approximately $16.23, or approximately 182% of HomeTown’s June 30, 2018 book value per share. The exchange ratio is fixed and the per share acquisition price will fluctuate with the market value of American National common stock. Following the completion of the merger, American National will remain well-capitalized and the company expects the transaction will be accretive to earnings per share.
“Roanoke and Franklin County are already important markets for our company and the addition of the New River Valley market is an exciting growth opportunity” said Jeffrey V. Haley, President and Chief Executive Officer of American National. “The combination of HomeTown and American National will create a company that is better positioned to serve the needs of those communities. We believe in community banking and focus on accessible, responsive, and friendly community-based services. By combining our highly qualified and dedicated teams, we believe we will be the community bank of choice for businesses and individuals in this area. We feel so strongly that our combined organization will be able to offer a hometown banking platform for each of our ten regions in Virginia and North Carolina that we will change our tag line to ‘Welcome to Hometown Banking.’
Subject to customary closing conditions, including regulatory and shareholder approvals, the merger is expected to close in the first quarter of 2019. Following completion of the merger, HomeTown’s subsidiary bank, HomeTown Bank, will be merged into American National’s subsidiary bank, American National Bank and Trust Company (“American National Bank”).
After the merger, Roanoke will serve as the combined bank’s Virginia banking headquarters as well as the center for its Corporate Credit Function. As the geographic hub of the company’s North Carolina banking footprint, Greensboro will serve as the North Carolina banking headquarters, while Danville will serve as the corporate headquarters for American National and American National Bank.
Susan K. Still, President and CEO of HomeTown, said, “American National’s culture, corporate character and commitment to the community are a natural fit for HomeTown Bank’s employees, shareholders and customers. We are excited about this partnership and the opportunity it presents to leverage the strengths of each community bank for the customers and communities we serve.”
Nancy Agee and Kenneth Bowling, currently active members of the HomeTown Bank Board of Directors, will be added to the boards of American National and American National Bank upon completion of the merger. Ms. Agee has served HomeTown as a director on both the bank and holding company boards since 2011, and is the President and Chief Executive Officer of Roanoke-based Carilion Clinic, Inc. Mr. Bowling is a Vice President of H.T. Bowling Inc. of Radford, Va. Ms. Still will become President of Virginia Banking for American National Bank until her planned retirement at the end of 2019. She will also become a director of American National Bank upon completion of the merger and will be nominated for election to the holding company board of American National at the annual shareholders’ meeting in May 2019. Roanoke banker, Kevin Meade, will continue to serve as Executive Vice President of American National Bank and Regional President for the Roanoke and New River Valley markets.
The remaining directors of HomeTown and HomeTown Bank will be invited to join a Transition Board to advise management and to assist in the successful integration of the organizations. A new Virginia Banking Board will be established to provide representatives from the seven Virginia regions. Transition Board members will also be invited to join this new Virginia Banking Board or one of the market advisory councils, which will be created for new or emerging markets.
Keefe, Bruyette & Woods, Inc. acted as financial advisor to American National and Williams Mullen acted as its legal advisor in the transaction. Sandler O’Neill + Partners, L.P. acted as financial advisor to HomeTown and Gentry Locke acted as its legal advisor.