US-based Pinnacle Bankshares Corporation and Virginia Bank have signed a definitive agreement for a strategic merger.
The merged entity is expected to have approximately $703m in total assets, $624m in total deposits, and $537m in loans according to the reported amount as of 30 September 2019.
The agreement was approved by the board of directors of the two firms.
As per the terms of the deal, Virginia Bank shareholders will have the opportunity to receive either $16.00 of cash or 0.5000 shares of Pinnacle common stock for each share of Virginia Bank common stock.
Subject to the limitation, 70% of the shares will be exchanged for the stock consideration and the remaining percentage will be exchanged for cash consideration.
Following the completion of the transaction, Pinnacle shareholders will own 71% of the merged entity, while the remaining will be owned by shareholders of Virginia Bank. Virginia Bank will merge into Pinnacle, which will become the surviving holding company.
Pinnacle president and CEO Aubrey H Todd Hall III said: “This is a tremendous opportunity to combine two neighbouring community banks with similar cultures and philosophies in a transformational merger. We have a strong team of experienced personnel throughout the organization and I am honoured and proud to lead us in this new endeavour. Together, we will leverage our resources for the benefit of all stakeholders and are committed more than ever to our community bank strategy.”
Virginia Bank chairman and CEO Donald W Merricks said: “We believe that Pinnacle is the ideal partner for our bank. Merging these financially sound institutions is a natural fit. Both banks are led by seasoned teams of community bankers who make local decisions to serve the communities in which we operate. This merger will allow us to better provide quality banking services to our customers, a rewarding workplace for our employees, and superior value to our shareholders.”
Subject to regulatory and shareholders approvals, the transaction is expected to be completed in the third quarter this year.