Virginia National Bankshares Corporation and Fauquier Bankshares, Inc announced the signing of a definitive agreement to combine in a strategic merger of equals. The combined company would have approximately $1.6 billion in total assets, $1.4 billion in total deposits, $1.3 billion in loans and more than $1 billion in assets under management based upon reported amounts as of June 30, 2020.
This strategic combination of like-minded community banks will create a premier Virginia financial institution with greater scale, operating leverage and complementary business lines. After the merger, the combined company will operate under the Virginia National brand and will be able to serve larger clients in its core Virginia markets of Charlottesville, Warrenton, Winchester and the counties of Albemarle, Fauquier, Frederick and Prince William. It will also accelerate current market expansions in Richmond and Northern Virginia.
“It is a rare opportunity to have two well-respected community banks of equal size in attractive markets put their individual missions aside to join forces in order to improve the experience of clients and employees and accelerate the returns of their shareholders,” said Glenn W. Rust, President and Chief Executive Officer of Virginia National. “Our entire team is honored to be entering this partnership with The Fauquier Bank, and I look forward to the leadership of The Fauquier Bank joining our team and bringing their expertise and experience to our organization.”
“There is a long-standing mutual respect between our two companies,” said Marc J. Bogan, President and Chief Executive Officer of The Fauquier Bank. “The enhanced scale and complementary business lines resulting from this transaction provides the best opportunity for both banks to better serve our major constituencies: our clients, our employees, our shareholders and our communities. We are committed to using the best practices of both companies to increase our market share across Virginia.”
The merger agreement was unanimously approved by the boards of directors of both companies and has unanimous support from all directors. Under the terms of the agreement, Fauquier shareholders will receive 0.6750 shares of Virginia National common stock for each share of Fauquier common stock held. After the merger of Fauquier into Virginia National, Virginia National shareholders will own approximately 51.4% of the combined company, and Fauquier shareholders will own approximately 48.6%.
Upon consummation of the transaction, Fauquier will merge into Virginia National and Virginia National will be the surviving holding company. Following the holding company merger, The Fauquier Bank will merge into Virginia National Bank (“VNB”) and VNB will be the surviving bank. Offices of The Fauquier Bank will be rebranded as VNB offices after systems are integrated. Virginia National’s headquarters will remain in Charlottesville.
Following the merger, the boards of directors of Virginia National and VNB will include seven members from the current Virginia National and VNB boards and six members from the current Fauquier and The Fauquier Bank boards. Current Virginia National Chairman, William D. Dittmar, Jr., will continue to serve as Chairman of the combined company and current Fauquier Chairman, John B. Adams, Jr., will be appointed Vice Chairman. At the effective time of the merger, Mr. Rust will continue to serve as President and Chief Executive Officer of Virginia National, while Mr. Bogan will be appointed President and Chief Executive Officer of VNB. Mr. Rust and Mr. Bogan will both serve on the boards of Virginia National and VNB.
The combination is expected to be completed in the first half of 2021, subject to approval of both companies’ shareholders, regulatory approvals and other customary closing conditions.
Performance Trust Capital Partners is acting as financial advisor to Virginia National and Williams Mullen is acting as its legal advisor. Piper Sandler & Co. is acting as financial advisor to Fauquier and Troutman Pepper is acting as its legal advisor.
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