The $748 million-asset Village's franchise is focused in the Richmond Metropolitan Statistical Area, home to eight of its nine branches. Towne entered the Richmond market in 2015, when it acquired the $1.1 billion-asset Franklin Financial Corp. The deal for Village, announced Tuesday, would give Towne 17 branches and $2.1 billion in deposits in Richmond. The combined company would have $17.8 billion in assets and deposits totaling $14.9 billion. 

The $17 billion-asset Towne "is humbled and excited to partner with Village Bank and its team members," Executive Chairman Robert Aston said Tuesday in a press release. "We believe our partnership can bring additional products and expanded services to the clients of Village Bank while meaningfully enhancing our Richmond presence, which is core to our franchise and future growth." 

The Richmond MSA's population, currently 1.36 million, is expected to grow 4.8%, twice the national average, over the next five years. The region's $82,000 median household income, also tops the national average, according to the Greater Richmond Partnership and the U.S. Census Bureau. Median Household income in Midlothian, a western suburb, tops $100,000, according to the partnership.  

Richmond's demographics are attracting other banks. In March, The $1.5 billion-asset First National Corp. in Strasburg, Virginia, announced plans to acquire Touchstone Bank in nearby Prince George for $47 million in stock in large part to add scale in the Richmond market.

Astin founded Towne, serving as CEO from its opening in April 1999 until March 2018. The company has completed six mergers in its 25-year-history.  The most recent, with the $603 million-asset Farmer's Bank in Hampton Roads, Virginia, closed in January 2023.

Village, which also opened in 1999, reported net income totaling $3.9 million through the first six months of 2024, up about 22% from the same six-month period in 2023. President and CEO Jay Hendricks characterized the merger with Towne as a "strategic move."

"This partnership will give us the ability to continue to meet our customers' banking needs with greater resources and products while providing increased opportunities for our employees," Hendricks said in the press release.

The $120 million deal price amounts to 171% of Village's tangible book value per share. Towne called it a "strategically compelling" use of its capital, noting the acquisition would produce about twice as much earnings-per-share accretion — about 6% once cost-saves are complete — as share buybacks.

While the price-to-tangible-book-value ratio Towne is paying is higher than the average for 2024 transactions, according to Seaport Research Partners Senior Analyst Laurie Havener Hunsicker, it follows a trend of richer payouts in recent weeks. Tupelo, Mississippi-based Renasant Financial's $1.2 billion acquisition of The First Bancshares in Hattiesburg, Mississippi, in July worked out to 184% of the seller's price-to-tangible-book-value-per-share. Meanwhile, the ratio for Jasper, Indiana-based German American Bancorp's $330 million deal for Heartland BancCorp in Whitehall, Ohio, also announced in July, topped 200%.

Towne and Village are targeting a closing date in the first half of 2025. Neither Astin nor Hendricks had returned a reporter's call at deadline.