Hampton-based Old Point Financial Corp. plans to acquire Windsor-based Citizens National Bank in a cash and stock deal worth about $7.9 million.
Under an agreement between the two companies, Citizens National will merge into The Old Point National Bank of Phoebus, a subsidiary of Old Point.
The deal has been unanimously approved by the boards of directors of both companies. It is expected to be completed in first quarter of next year, subject to the approval of Citizens National shareholders as well as customary regulatory approvals and other closing conditions.
“We believe this to be a strategic transaction which expands our market position in Isle of Wight County, an area with compelling customer demographics and solid growth potential,” Robert F. Shuford Jr., Old Point National Bank’s president and CEO, said in a statement. “In addition, this transaction will further strengthen our balance sheet by diversifying our loan portfolio and accelerating our lending activity in the Southside region of our footprint.”
Under the terms of the merger agreement, Citizens National shareholders will receive 0.1041 shares of Old Point common stock and $2.19 in cash for each outstanding share of Citizens National common stock. The transaction’s implied value is $5.47 per share of Citizens National common stock.
Citizens National had assets of approximately $48 million, loans of approximately $41 million and deposits of approximately $40 million as of June 30.
After the merger, Old Point is expected to have about $1 billion in assets with 19 branches in Hampton, Newport News, Norfolk, Virginia Beach, Chesapeake, Williamsburg, York County and Isle of Wight.
Following the closing of the merger, the Old Point Southside Regional Advisory Board will add two members from the current Citizens National board of directors.