TowneBank to acquire Paragon Commercial Corp.,
Portsmouth-based TowneBank plans to acquire Raleigh, N.C.- based Paragon Commercial Corp., the parent company of Paragon Commercial Bank, in a stock deal valued at $323.7 million.
The combined bank is expected to have $9.7 billion in assets and total deposits of $7.5 billion.
TowneBank also announced its first-quarter earnings on Thursday. Its total profit for the quarter was $21.97 million, up 23.3 percent from the same period last year. Earnings per share were 35 cents, unchaged from the first quarter of 2016.
The Paragon acquisition would give TowneBank a presence in the Charlotte and Raleigh metro areas. The bank currently operates in Hampton Roads, the Richmond area and Northeastern North Carolina.
TowneBank said that, on a pro-forma basis, the combined bank will have the second-largest deposit market share among community banks in the Raleigh area.
Under the terms of the merger agreement, Paragon shareholders will receive 1.725 shares of TowneBank common stock for each outstanding share of Paragon common stock. That translates into a per-share value of $59.25 based on TowneBank’s closing stock price of $34.35 on April 26.
Pending customary regulatory and shareholder approvals, the merger is scheduled to close in the fourth quarter.
Towne plans to operate in the Raleigh, Charlotte, and Cary markets as Paragon Bank, a division of TowneBank.
Robert C. Hatley, the president and CEO of Paragon, will become president and CEO of the Paragon Division as well as president of TowneBank’s North Carolina operations.
Hatley and Paragon Board Chairman Howard Jung will join the TowneBank corporate board.