Old Point Financial Corporation (Nasdaq Global Market: OPOF) and Citizens National Bank (OTC Pink: CNBV) jointly announced today that they have entered into a definitive merger agreement pursuant to which Old Point will acquire Citizens National in a stock and cash transaction for total consideration valued at approximately $7.9 million. Upon the closing of the transaction, Citizens National will merge into The Old Point National Bank of Phoebus, a wholly-owned subsidiary of Old Point. The transaction has been unanimously approved by the boards of directors of both institutions. The transaction is expected to be completed in first quarter 2018, 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," said Robert F. Shuford, Jr., Old Point National Bank President and CEO. "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. Importantly, we expect the transaction to be immediately accretive to Old Point's earnings per share and tangible book value. Also, Old Point's regulatory capital levels will remain very strong, enabling Old Point to continue to evaluate all appropriate growth opportunities."
"Our board of directors is looking forward to joining forces with Old Point and considers this transaction to be an excellent opportunity for our shareholders as well as our customers," said Jeffrey H. Noblin, Citizens National President and CEO. "We believe our shareholders will benefit from ownership in a growing financial institution whose stock enjoys added liquidity, which comes from trading on a more accessible exchange. We also believe our customers will realize the advantages inherent with a larger bank, including enhanced product variety and financial strength, while at the same time maintaining a very customer-focused approach to business."
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, or approximately $7.9 million in aggregate deal value, based on a volume-weighted average price of $31.48 for Old Point common stock for the three trading days ended October 27, 2017. This deal value equates to approximately 100% of Citizen National's tangible book value as of June 30, 2017.
Citizens National Bank is headquartered in Windsor, Virginia and serves its customers and communities through one full-service location. Citizens National has assets of approximately $48 million, loans of approximately $41 million and deposits of approximately $40 million as of June 30, 2017. Following the merger, Old Point is expected to have approximately $1.0 billion in assets with 19 branches located in the Hampton Roads localities of Hampton, Newport News, Norfolk, Virginia Beach, Chesapeake, Williamsburg, York County and Isle of Wight County.
Following the closing of the merger, the Old Point Southside Regional Advisory Board will add two members from the current Board of Directors of Citizens National.
Keefe, Bruyette and Woods, Inc. is acting as the financial advisor to Old Point, and Troutman Sanders LLP is acting as its legal advisor in the transaction. Performance Trust Capital Partners, LLC is acting as financial advisor to Citizens National, and Williams Mullen is acting as its legal advisor in the transaction.
About Old Point
Old Point Financial Corporation is the parent company of The Old Point National Bank of Phoebus, a locally owned and managed community bank serving all of Hampton Roads and Old Point Trust & Financial Services, N.A., a Hampton Roads wealth management services provider. More information can be found at www.oldpoint.com.
About Citizens National
Citizens National Bank is a nationally chartered community bank headquartered in Windsor, Virginiaserving the County of Isle of Wight, the Cities of Franklin and Suffolk, and portions of Southampton, Surry and Sussex Counties with one full service branch. More information can be found at www.cnbva.com.
