SUFFOLK, Va., July 16, 2010 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank (Nasdaq:TOWN) announced today that it has signed a purchase and assumption agreement to acquire all the deposit accounts of The Bank of Currituck and its six banking offices in northeastern North Carolina, including three banking offices on the Outer Banks. The transaction also involves the purchase of a substantial portion of the Moyock-headquartered bank's loan portfolio and all its other banking assets. The transaction is expected to provide TowneBank with approximately $173 million in assets, including approximately $96 million in performing loans, and approximately $173 million in deposit accounts. In addition to its assumption of the deposit accounts and certain other liabilities, TowneBank has agreed to pay The Bank of Currituck $10 million in cash, subject to certain adjustments.
The transaction is expected to close this fall and is expected to be accretive to TowneBank's earnings in the first full year following the transaction. The agreement is subject to various closing conditions and regulatory approvals, as well as the approval of The Bank of Currituck's shareholders. Following the closing of the transaction, The Bank of Currituck will cease operation as a commercial bank and will manage the assets it retains in this transaction, including certain performing and non-performing loans as well as all other real estate owned. The Board of The Bank of Currituck anticipates the winding up of the Bank's business over the 36 months following the closing of the transaction and making distributions to its shareholders at that time. "Subject to the receipt of regulatory approval, The Bank of Currituck anticipates that it will make an initial distribution to shareholders of approximately $100 per share as soon as practicable after the closing of the transaction."
"Having The Bank of Currituck join our TowneBank family is a unique opportunity for our bank to expand our special style of hometown banking into Northeastern North Carolina and the Outer Banks," stated G. Robert Aston, Jr., Chairman and Chief Executive Officer. "It fits perfectly into our strategic goal of serving those communities within the reach of the Hampton Roads media market stretching from Williamsburg to the Outer Banks. The Bank of Currituck has a great legacy as a hometown bank having served its community since 1920. We look forward to welcoming the directors, employees and customers to our Towne family."
Upon closing of the proposed transaction, TowneBank of Currituck will be created as a new member of TowneBank's Hometown Banking Group. The current directors of The Bank of Currituck will join its regional board.
Tommy Moore, former President and CEO and a current director of The Bank of Currituck, stated, "The management and directors of the Bank believe that we have found the best solution to allow the Bank to continue to provide its high level of community banking services in these difficult times. TowneBank has the same core principles we do and will serve our customers and our communities in a manner that will make us all proud."
Matthew A. R. Converse, president and CEO since 2008, believes the success of the merger lies in the strengths the two banks share. "We have great tradition and a passion for our North Carolina communities," he said. "TowneBank is no different in their commitment to Hampton Roads. It is an extraordinary organization that will make us a stronger, more viable force in the markets we serve."
As one of Virginia's top community banks, TowneBank now operates 18 banking offices in Chesapeake, Hampton, Portsmouth, Newport News, Virginia Beach, Norfolk, Williamsburg and York County. Towne also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Insurance Agency, TFA Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Prudential Towne Realty, Towne 1031 Exchange, LLC, and Corolla Classic Vacations. Through its strategic partnership with William E. Wood and Associates, the bank also offers mortgage services in all of their offices in Hampton Roads and Northeastern North Carolina. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group's President and Board of Directors. With total assets of $3.69 billion as of March 31, 2010, TowneBank is one of the largest banks headquartered in Virginia.
Cautionary Statement:
This release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include competitive pressures in the banking industry that may increase significantly, changes in the interest rate environment may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held, general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services, changes in the legislative or regulatory environment, including changes in accounting standards, may adversely affect our businesses, costs or difficulties related to the integration of the business and the businesses we have acquired may be greater than expected, expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame, our competitors may have greater financial resources and develop products that enable them to compete more successfully, changes in business conditions, changes in the securities market and changes in our local economy with regards to our market area and its heavy concentration of U.S. military bases and related personnel. We assume no obligation to update information contained in this release.