With over 200 years of combined history as independent community banks, Bank of Floyd and Grayson National Bank recognize the unique opportunity of joining together to enhance their shared mission of providing outstanding banking services in the communities where they do business.
Cardinal Bankshares Corporation, parent company of Bank of Floyd, and Grayson Bankshares, parent company of Grayson National Bank, announced today that they have entered into a definitive agreement to combine their companies. With over 200 years of combined history as independent community banks, Bank of Floyd and Grayson National Bank recognize the unique opportunity of joining together to enhance their shared mission of providing outstanding banking services in the communities where they do business.
Under the terms of the agreement, both companies will merge with and into Parkway Acquisition Corp., a new bank holding company formed for the purpose of effecting the combination. Both Cardinal and Grayson shareholders will receive shares of stock in the newly formed company.
Based upon the approximate equity contributions of Cardinal and Grayson to the newly formed company, Cardinalshareholders will receive approximately 40% of the newly issued shares and Grayson shareholders will receive approximately 60% of the newly issued shares. Cardinal shareholders will receive 1.30 shares of Parkway common stock for each share of Cardinal common stock. Grayson shareholders will receive 1.76 shares of Parkway common stock for each share of Grayson common stock. The companies expect to apply for quotation of the new holding company shares on the OTCQX as the transaction is completed.
The subsidiary banks of Bank of Floyd and Grayson National Bank will combine to form one national bank regulated by the Office of the Comptroller of the Currency. The newly formed bank holding company and its subsidiary bank will select a new name following the closing of the transaction. The combination is subject to approval by Cardinal’s and Grayson’s shareholders, banking regulators and other customary closing conditions. The transaction is expected to be completed during the second quarter of 2016.
The combined organization will have 17 full-service banking offices, assets of over $600 million, deposits of over $500 million and shareholders’ equity of over $50 million.
The combined company will be governed by a board of directors comprised of each of the current directors of Cardinal and Grayson. Current Grayson Chairman of the Board, Thomas M. Jackson, Jr., will serve as chairman of the board of the company and its subsidiary bank, and current Cardinal Chairman, John Paul Houston, will serve as vice chairman of the company and subsidiary bank. Allan Funk, currently President & CEO of Grayson, and Blake Edwards, currently CFO of Grayson, will serve in the same capacities with the new company. Both Bank of Floyd and Grayson executives will make up the balance of the management team.
"This combination will create a new dynamic community bank dedicated to serving our very important hometown communities inGrayson and Floyd Counties. Working together we can offer enhanced products and services to an extended market area in a more efficient manner. As neighboring banks our footprints fit together very nicely. Our combined market area will extend from Alleghany County, North Carolina, north to Wythe County, Virginia and east to the counties of Montgomery and Roanoke, Virginia. Together our product and service capabilities will be competitive with the very largest banks. Individuals and businesses in our area prefer to do business locally when they can, and we intend to be the local bank of choice," said Allan Funk.
In connection with the transaction, Raymond James & Associates, Inc. is acting as financial advisor and has provided a fairness opinion to Grayson, and Williams Mullen provided legal advice to Grayson. Gentry Locke served as legal advisor to Cardinal, and Banks Street Partners, LLC rendered a fairness opinion to Cardinal. In addition, CCG Consulting Group acted as a strategic advisor toCardinal.
