First Community signs definitive merger pact with Highlands Bankshares
First Community Bankshares, parent company of First Community Bank and Highlands Bankshares, parent company of Highlands Union Bank, jointly announced their entry into an agreement and plan of merger pursuant to which First Community will acquire Highlands and its wholly-owned bank subsidiary, Highlands Union Bank. As of June 30, 2019, Highlands Union Bank had total assets of approximately $612M. Upon completion of the transaction, First Community is expected to have total consolidated assets in excess of $2.8B. The agreement and plan of merger provides for the merger of Highlands with and into First Community, with First Community as the surviving corporation. Under the terms of the agreement and plan of merger, each share of Highlands common and preferred stock outstanding immediately prior to the merger will be converted into the right to receive 0.2703 shares of First Community common stock, which equates to $8.80 per share of Highlands common stock and an aggregate transaction value of approximately $91M based on First Community's recent 20-day average closing price. First Community Bank and Highlands Union Bank have entered into a separate merger agreement providing for the merger of Highlands Union Bank with and into First Community Bank immediately following the merger of First Community and Highlands, with First Community Bank as the surviving bank. The transaction, which received unanimous approval by both First Community's and Highlands' Board of Directors, is subject to customary closing conditions, including the approval of Highlands' shareholders and the receipt of all required regulatory approvals. All members of the Highlands Board of Directors have entered into support agreements to vote their holdings in favor of the transaction. The transaction is expected to be consummated in the fourth quarter of 2019. At that time, a Highlands director will join the board of First Community Bank. First Community will also establish an Advisory Board to maintain a close connection with our customers in the Highlands Region. First Community expects the transaction to be neutral to tangible book value per share and to provide upper single digit accretion to earnings in the first year of the combination.