TowneBank announced today that it has signed a merger agreement to acquire Monarch Financial Holdings, Inc., the parent company of Monarch Bank, creating a $7.3 billion bank serving Hampton Roads, Richmond and northeastern North Carolina.
“Our Towne family is humbled and excited to join hands with our long-time friends at Monarch,” said G. Robert Aston, Jr., Chairman and CEO of TowneBank, in a release from TowneBank. “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.”
The combined companies will rank No. 1 in deposit market share with nearly 21 percent of the Hampton Roads market and will be the only community bank in the top 50 largest U.S. metropolitan areas with a No. 1 market share ranking.
“We have known and respected the senior leadership team and employees at Towne Bank for many years and have been impressed by the way they have grown their company into one of the largest and most successful financial institutions in Virginia”, stated Brad E. Schwartz, CEO of Monarch, in the release. “This combination of the top two performing community banks in the market gives us a dynamic foundation to serve our commercial, mortgage and consumer customers with even greater convenience, expanded product and service offerings, and additional lending capacity. This merger is a great outcome for our company’s shareholders and positions us well for sustainable success over the long term.”
Based on financials reported Sept. 30, the companies have combined assets of $7.3 billion, deposits of $5.8 billion and loans of $5.4 billion , according to the announcement.
The agreement calls for common shareholders of Monarch to receive 0.883 shares of TowneBank common stock for each share of Monarch, according to the announcement. That implies a deal value per share of $18.57, or about $220 million, based on TowneBank’s closing stock price Wednesday of $21.03.
TowneBank’s announcement included the following personnel moves:
Brad E. Schwartz will join Aston on the Towne Corporate Management Group as Senior Executive Vice President and Chief Operating Officer along with TowneBank President and Chief Banking Officer, J. Morgan Davis; William B. Littreal, Senior Executive Vice President and Chief Strategy Officer; and Clyde E. McFarland, Senior Executive Vice President and Chief Financial Officer.
Neal Crawford, Monarch Bank President, will join Towne as President and Chief Executive Officer of Towne Financial Services Group. William T. Morrison, Chief Executive Officer of Monarch Mortgage will become Chairman and Chief Executive Officer of TowneBank Mortgage and Realty Group succeeding Jacqueline B. Amato, currently TowneBank Mortgage CEO, who is planning to retire at the end of the 2016 calendar year.
Monarch Chairman, Jeffrey F. Benson, will join the TowneBank Corporate Board along with Monarch Directors, Elizabeth T. Patterson, Dwight E. Schaubach and Robert M. Oman. Schwartz, Crawford and Morrison will also join the 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.