TowneBank (NASDAQ: TOWN) and Raleigh based Dogwood State Bank (OTCQX: DSBX) (“Dogwood”), announced the signing of a definitive merger agreement pursuant to which TowneBank will acquire Dogwood State Bank.
The proposed transaction substantially enhances TowneBank’s strategic journey down the fast-growing Interstate 85 corridor from Richmond, Virginia to Greenville and the upstate region of South Carolina. The bank’s current market position will be expanded in Raleigh, Greensboro-Winston Salem, Greenville, and Charlotte, North Carolina. Additionally, the merger will increase the bank’s footprint along the Eastern North Carolina coast from the Outer Banks to also include Morehead City, Greenville, Fayetteville and Wilmington along with a new location in Charleston, South Carolina.
Pro forma for TowneBank’s pending acquisition of Old Point Financial Corporation (expected to close Sept. 1, 2025) and the proposed acquisition of Dogwood, the combined company would have total assets of approximately $22 billion, loans of approximately $16 billion and deposits of approximately $19 billion at close of the transactions. TowneBank expects the acquisition of Dogwood to be approximately 8.0% accretive to 2027E earnings per share with fully phased-in cost savings on a GAAP basis.
Under the terms of the merger agreement, common shareholders of Dogwood will receive a fixed exchange ratio of 0.700 shares of TowneBank common stock for each outstanding share of Dogwood common stock. This implies a deal value per share of $25.04 or approximately $476.2 million based on TowneBank’s 15-day average closing stock price of $35.77 on Aug. 18, 2025.
Steve Jones, CEO of Dogwood, will continue in a key leadership role within the combined company. He will join TowneBank as president of its North Carolina and South Carolina banking operations and be a member of the TowneBank Corporate Management team.
“It has been my pleasure to know Steve for a number of years and we have always admired the great job he and his team have done building Dogwood State Bank. We are excited to have Steve and his talented teammates join hands and hearts with our Towne family to take our Main Street Bank forward in the fast-growing North Carolina and South Carolina markets,” said Executive Chairman of TowneBank G. Robert Aston, Jr. in a press release.
Extensive due diligence was performed by the management teams of TowneBank and Dogwood in regard to the transaction. The definitive agreement was approved by the boards of directors of TowneBank and Dogwood. The transaction is expected to close in early 2026 and is subject to customary conditions, including regulatory approval, as well as the approval of Dogwood’s shareholders.
“I just felt like we got to a size that it’d be a good opportunity to partner with somebody that had, like cultures, like products and services. And this is a perfect fit, in my opinion, for Dogwood. It gives us a bit of a bigger balance sheet. And they do offer more products than Dogwood did. They have a property casualty insurance business, [a] mortgage business, so it gives our bankers more tools in their toolkit as they try to serve our clients,” remarked Jones.
Raymond James & Associates, Inc. served as the financial advisor and Wachtell, Lipton, Rosen & Katz served as legal counsel to TowneBank in the transaction. Piper Sandler & Co. served as the financial advisor and Williams Mullen served as legal counsel to Dogwood in the transaction.
Dogwood State Bank opened its first branch in Fayetteville in February of 2023 at 225 Green St. Dogwood State Bank’s Regional President for Eastern North Carolina Greg Reames and the rest of the local team will stay intact and continue to serve the Fayetteville area throughout the transition and as part of the TowneBank company come 2026. This will be TowneBank’s first time operating in Fayetteville, N.C.
“This is going to be a win-win for shareholders, our employees and our customers. So it's a very exciting day, no doubt about it, for Dogwood. It'll be a great way to start our new chapter together with TowneBank,” concluded Jones.
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