National Bankshares, Inc. (“National Bankshares” or the “Company”)
(Nasdaq: NKSH) and Frontier Community Bank (“Frontier”) jointly
announced today that they have entered into a definitive merger
agreement for National Bankshares to acquire Frontier. As of
September 30, 2023, Frontier had total assets of approximately $154
million. Upon completion of the transaction, National Bankshares is
expected to have total consolidated assets of approximately $1.7
billion based on September 30, 2023 financial data.
“We are pleased to announce our partnership with Frontier
Community Bank, and we believe that our compatible cultures and
shared values will enhance our position as a true Virginia
community bank,” said Brad Denardo, Chairman, President and CEO of
National Bankshares. “This acquisition will also help us achieve a
higher level of financial performance for our shareholders by
gaining meaningful entry into markets with attractive growth
opportunities. We look forward to continuing Frontier’s commitment
to its customers and the communities it serves.”
Alan Sweet, President and CEO of Frontier, added, “We are
excited to combine Frontier Community Bank into the National
Bankshares team. This transaction allows Frontier to improve the
products and services we offer our customers while continuing to
operate with the culture and values of a community bank. National
Bankshares’ trading on the Nasdaq stock market provides Frontier’s
shareholders with the opportunity to benefit from enhanced stock
trading liquidity.”
Under the terms of the merger agreement, shareholders of
Frontier will have the right to receive either 0.4250 shares of
National Bankshares common stock or $14.48 in cash for each share
of Frontier common stock they hold. Shareholder elections are
subject to adjustment so that the overall mix of consideration to
be paid to Frontier shareholders consists of at least 90% National
Bankshares common stock. The aggregate value of the transaction is
approximately $17.1 million. Upon completion of the acquisition,
Frontier will merge into The National Bank of Blacksburg, the
wholly owned bank subsidiary of National Bankshares.
The transaction, which received unanimous approval by both
National Bankshares’ and Frontier’s Board of Directors, is subject
to customary closing conditions, including the approval of the
merger agreement by Frontier’s shareholders and the receipt of all
required regulatory approvals. All executive officers and directors
of Frontier have entered into support agreements to vote the shares
of Frontier they own in favor of the transaction. The transaction
is expected to close in the second quarter of 2024.
Piper Sandler & Co. served as financial advisor to National
Bankshares, and Williams Mullen served as its legal counsel.
Performance Trust Capital Partners, LLC served as financial advisor
to Frontier, and Woods Rogers Vandeventer Black served as its legal
counsel.
About National Bankshares, Inc.
National Bankshares, Inc., headquartered in Blacksburg,
Virginia, is the parent company of The National Bank of Blacksburg,
which does business as National Bank, and of National Bankshares
Financial Services, Inc. National Bank is a community bank
operating from 24 full-service offices, primarily in southwest
Virginia, and three loan production offices in Roanoke,
Charlottesville, and Staunton. National Bankshares Financial
Services, Inc. is an investment and insurance subsidiary in the
same trade area. The Company’s common stock is traded on the Nasdaq
Capital Market under the symbol “NKSH.” Additional information is
available at https://www.nationalbankshares.com/.
About Frontier Community Bank
Frontier Community Bank, headquartered in Waynesboro, Virginia,
was founded in 2008 through a grassroots effort by residents of
Augusta County to create a locally owned and managed financial
institution, with the goal of finding “a new way to bank the
old-fashioned way.” Today, Frontier Community Bank operates 3
full-service branch locations in Virginia, servicing local retail
consumers and businesses. Additional information is available at
https://frontiercommunitybank.com/.
Additional Information and Where to Find It
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities of the Company or a
solicitation of any vote or approval. The Company will file a
Registration Statement on Form S-4 and other documents regarding
its proposed acquisition of Frontier (the “Merger”) with the
Securities and Exchange Commission (the “SEC”) to register the
shares of the Company’s common stock to be issued to the
shareholders of Frontier. The registration statement will include a
proxy statement of Frontier and a prospectus of the Company. A
definitive proxy statement/prospectus will be sent to the
shareholders of Frontier in advance of its special meeting of
shareholders that will be held to consider the proposed
Merger. Before making any voting or investment
decision, investors and shareholders are urged to read carefully
the proxy statement/prospectus and any other relevant documents to
be filed with the SEC in connection with the proposed transaction
because they contain important information about the Company,
Frontier and the proposed transaction. Investors and
shareholders of both companies are also urged to carefully review
and consider the Company’s public filings with the SEC, including,
but not limited to, its Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and proxy
statements. Investors and shareholders may obtain a free copy of
these documents (when available) through the website maintained by
the SEC at www.sec.gov. These documents may also be obtained,
without charge, from the Company at www.nationalbankshares.com
under the tab “Financial Reports – SEC Filings” or by directing a
request to National Bankshares, Inc., 101 Hubbard Street,
Blacksburg, Virginia 24060, Attention: Investor Relations. The
information on the Company’s website is not, and shall not be
deemed to be, a part of this press release or incorporated into
filings the Company makes with the SEC.
The Company, Frontier and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Frontier in
connection with the proposed Merger. Information about the
directors and executive officers of the Company and their ownership
of the Company’s common stock is set forth in the Company’s proxy
statement in connection with its annual meeting of shareholders, as
previously filed with the SEC on March 24, 2023. Information about
the directors and executive officers of Frontier and their
ownership of Frontier’s common stock may be obtained by reading the
proxy statement/prospectus regarding the proposed transaction when
it becomes available. Additional information regarding the
interests of these participants and other persons who may be deemed
participants in the proposed Merger may be obtained by reading the
proxy statement/prospectus regarding the Merger transaction when it
becomes available.
Forward-Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements about (i)
the benefits of the proposed Merger, (ii) the Company’s and
Frontier’s plans, obligations, expectations and intentions and
(iii) other statements presented herein that are not historical
facts. Words such as “anticipates,” “believes,” “intends,”
“should,” “expects,” “will,” and variations of similar expressions
are intended to identify forward-looking statements. These
statements are based on the beliefs of the respective managements
of the Company and Frontier as to the expected outcome of future
events and are not guarantees of future performance. These
statements involve certain risks, uncertainties and assumptions
that are difficult to predict with regard to timing, extent, and
degree of occurrence. Results and outcomes may differ materially
from what may be expressed or forecasted in forward-looking
statements. Factors that could cause results and outcomes to differ
materially include, among others, the ability to obtain required
regulatory and shareholder approvals and meet other closing
conditions to the transaction; the ability to complete the Merger
as expected and within the expected timeframe; disruptions to
customer and employee relationships and business operations caused
by the Merger; the ability to implement integration plans
associated with the Merger, which integration may be more
difficult, time-consuming or costly than expected; the ability to
achieve the cost savings and synergies contemplated by the Merger
within the expected timeframe, or at all; changes in local and
national economies, or market conditions; changes in interest
rates; regulations and accounting principles; changes in policies
or guidelines; loan demand and asset quality, including real estate
and other collateral values; deposit flow; the impact of
competition from traditional or new sources; and the other factors
detailed in the Company’s publicly filed documents, including its
Annual Report on Form 10-K for the year ended December 31, 2022.
The Company and Frontier assume no obligation to revise, update, or
clarify forward-looking statements to reflect events or conditions
after the date of this press release.
Contacts:
National Bankshares, Inc.
F. Brad Denardo, (540) 951-6213
Chairman, President and CEO
Lara E. Ramsey, (540) 951-6250
Executive VP and COO
Frontier Community Bank
Alan J. Sweet, (540) 932-9100
President and CEO
National Bankshares (NASDAQ:NKSH)
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