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EX-2.1 - PLAN OF PURCHASE, SALE, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR SUCCESSION - Paragon Commercial CORP | pbnc_ex21.htm |
EX-99.2 - PRESS RELEASE - Paragon Commercial CORP | pbnc_ex992.htm |
8-K - CURRENT REPORT - Paragon Commercial CORP | pbnc_8k.htm |
Exhibit 99.1
News Release
For
more information contact:
G.
Robert Aston, Jr., TowneBank Chairman and CEO, (757)
638-6780
Robert
C. Hatley, Paragon Commercial Corporation, CEO, (919)
534-7400
William
B. Littreal, TowneBank Chief Investor Relations Officer and CSO,
(757) 638-6813
FOR IMMEDIATE RELEASE
TOWNEBANK
EXPANDS NORTH CAROLINA PRESENCE THROUGH THE ACQUISITION OF
PARAGON
COMMERCIAL
CORPORATION AND PARAGON COMMERCIAL BANK
Suffolk, VA And Raleigh, NC, April 27,
2017 – (GLOBE NEWSWIRE) -- Hampton Roads based
TowneBank (NASDAQ:TOWN) and Raleigh based Paragon Commercial
Corporation, the parent company of Paragon Commercial Bank
(“Paragon”) (NASDAQ:PBNC), today announced the signing
of a definitive merger agreement pursuant to which TowneBank will
acquire Paragon creating a $9.7 billion community bank. The
acquisition of Paragon will expand Towne’s community banking
franchise into two of the fastest growing metropolitan areas in the
United States, Charlotte and Raleigh, North Carolina adding to
Towne’s current presence in the Norfolk-Virginia Beach
Virginia MSA, the Richmond Virginia MSA and Northeastern North
Carolina.
Based
on financial data as of March 31, 2017, the combined company would
have total assets of $9.7 billion, total
loans of $7.1 billion and total deposits of $7.5 billion. On a pro
forma basis, TowneBank will possess the second largest deposit
market share among community banks operating in the demographically
attractive Raleigh, North Carolina MSA. In addition, the pro forma
entity will have an established and scalable loan and deposit
platform in the Charlotte, North Carolina marketplace.
Under
the terms of the merger agreement, common shareholders of Paragon
will receive a fixed exchange ratio of 1.7250 shares of TowneBank
common stock for each outstanding share of Paragon common stock.
This implies a deal value per share of $59.25 or approximately
$323.7 million based on TowneBank’s closing stock price of
$34.35 on April 26, 2017. Pending customary regulatory and
shareholder approvals, the merger is scheduled to close in the
fourth quarter of 2017.
Towne
plans to operate in the Raleigh, Charlotte, and Cary markets as
Paragon Bank, a division of TowneBank. Robert C. Hatley, President
and CEO of Paragon, will continue in his current role as the
President and CEO of the Paragon Division as well as the President
of Towne’s North Carolina
operations. Hatley and Paragon Board Chairman, Howard Jung, will
join the TowneBank corporate board.
The
Paragon Executive Management team consisting of Matthew C. Davis,
Executive Vice President and Chief Operating Officer, James F.
Fielding, Senior Vice President and Chief Credit Officer, Brian K.
Reid, Triangle Market President and Phillip R. Jurney, Charlotte
Market President, will continue in their current Paragon
roles.
“We are
really excited to welcome the extraordinarily talented Paragon team
into our Towne family,” said G. Robert Aston, Jr., Chairman
and CEO of TowneBank. “From our humble beginnings in 1999,
both Towne and Paragon have prospered through a caring culture of
serving others and enriching lives while continuing to build a
great community asset for the communities we
serve.”
“We have had
great admiration for the TowneBank team for many years and have
been impressed by the way they’ve grown their franchise into
one of the top community banks in Virginia and North
Carolina,” stated Robert C. Hatley, President and CEO of
Paragon. “We believe partnering with TowneBank will provide
us with a strong foundation and additional capacity to deliver our
unique private banking experience business model to businesses,
professionals, executives and entrepreneurs in our target markets.
We expect this merger will be a truly great outcome for our
shareholders and will position us for continued
success.”
Extensive due
diligence was performed over a multi-week period leading up to
the merger. Under the
proposed merger terms, and inclusive of estimated expenses
associated with crossing $10 billion in total assets, the
acquisition of Paragon is expected to be immediately accretive to
TowneBank’s earnings in 2018 and also thereafter. In
addition, the transaction is expected to be nominally dilutive,
less than 1%, to TowneBank’s tangible book value at closing.
TowneBank’s capital ratios are expected to continue to exceed
well-capitalized regulatory standards.
An
investor presentation outlining the transaction is provided on the
TowneBank website at www.townebank.com under
“Investor Relations”.
Sandler
O’Neill + Partners, LP acted as financial advisor to
TowneBank and Williams Mullen acted as its legal advisor in the
transaction. Raymond James & Associates, Inc. acted as
financial advisor to Paragon and Wyrick Robbins Yates & Ponton
LLP acted as its legal advisor.
About
TowneBank
As one
of the top community banks in Virginia and North Carolina,
TowneBank operates 37 banking offices serving Chesapeake,
Chesterfield County, Glen Allen, Hampton, James City County,
Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond,
Suffolk, Virginia Beach, Williamsburg, and York County in Virginia,
along with Moyock, Grandy, Camden County, Southern Shores, Corolla
and Nags Head in North Carolina. Towne also offers a full range of
financial services through its controlled divisions and
subsidiaries that include Towne Investment Group, Towne Insurance
Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial
Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031
Exchange, LLC, and Beach Properties of Hilton Head. Local
decision-making is a hallmark of its hometown
banking strategy that is delivered through the leadership of each
group’s President and Board of Directors. With total assets
of $8.2 billion as of March 31, 2017, TowneBank is one of the
largest banks headquartered in Virginia.
About
Paragon
Paragon
Commercial Corporation is the parent company of Paragon Bank, which
provides a private banking experience to businesses, professionals,
executives, entrepreneurs and other individuals. Founded in
Raleigh, North Carolina in 1999, Paragon Bank provides banking
services through highly responsive professionals, an extensive
courier service, online and mobile technologies, free worldwide ATM
access and a select number of strategically placed offices in
Raleigh, Cary and Charlotte, North Carolina.
Additional
Information and Where to Find It
This
communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the merger, Paragon will
file with the Securities and Exchange Commission
(“SEC”) a preliminary proxy statement.
Paragon
will deliver a definitive proxy statement/prospectus to its
stockholders seeking approval of the merger and related matters. In
addition, each of TowneBank and Paragon may file other relevant
documents concerning the proposed merger with the Federal Deposit
Insurance Corporation (“FDIC”) and SEC.
Paragon stockholders are strongly urged to read
the definitive proxy statement/prospectus regarding the proposed
merger when it becomes available and other relevant documents filed
with the FDIC and SEC, as well as any amendments or supplements to
those documents, because they will contain important information
about TowneBank, Paragon and the proposed merger. Free
copies of the definitive proxy statement/prospectus, as well as
other filings containing information about Paragon, may be obtained
after their filing at the SEC’s website (http://www.sec.gov).
In addition, free copies of the definitive proxy
statement/prospectus, when available, also may be obtained by
directing a request by telephone or mail to Paragon Commercial
Corporation, 3535 Glenwood Avenue, Raleigh, North Carolina 27612,
Attention: Investor Relations (telephone: (919) 788-7770), or by
accessing the Paragon’s website at https://www.paragonbank.com under
“About Us—Investor Relations.”
Paragon, TowneBank
and their respective directors and executive officers may be deemed
to be participants in the solicitation of proxies from
Paragon’s stockholders in connection with the proposed
merger. Information about the directors and executive officers of
Paragon and TowneBank and other persons who may be deemed
participants in the solicitation, including their interests in the
merger, will be included in the definitive proxy
statement/prospectus when it becomes available. Additional
information about Paragon’s executive officers and directors
can be found in Paragon’s final prospectus filed with the SEC
on June 17, 2016. Additional information regarding
TowneBank’s executive officers and directors can be found in
TowneBank’s definitive proxy statement in connection with its
2017 Annual Meeting of Stockholders filed with the FDIC on April
21, 2017. You may obtain free copies of each document from Paragon
as described in the preceding paragraph and from TowneBank
by directing a request
by telephone or mail to TowneBank, 6001 Harbour View Boulevard,
Suffolk, Virginia 23425, Attention: Investor Relations (telephone:
(757) 638-6794), or by accessing TowneBank’s website at
https://townebank.com under “Investor Relations.” The
information on TowneBank’s and Paragon’s websites is
not, and shall not be deemed to be, a part of this release or
incorporated into other filings either company makes with the FDIC
or SEC.
Forward-Looking
Statements
Statements made in
this release, other than those concerning reported historical
financial information, may be considered forward-looking
statements, which speak only as of the date of this release and are
based on current expectations and involve a number of assumptions.
These include statements as to the anticipated benefits of the
merger, including future financial and operating results, cost
savings and enhanced revenues that may be realized from the merger
as well as other statements of expectations regarding the merger
and any other statements regarding future results or expectations.
Each of TowneBank and Paragon intends such forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 and is including this statement for
purposes of these safe harbor provisions. The companies’
respective abilities to predict results, or the actual effect of
future plans or strategies, is inherently uncertain. Factors which
could have a material effect on the operations and future prospects
of each of TowneBank and Paragon, and the resulting company,
include but are not limited to: the businesses of TowneBank and
Paragon may not be integrated successfully or such integration may
be more difficult, time-consuming or costly than expected; expected
revenue synergies and cost savings from the merger may not be fully
realized or realized within the expected timeframe; revenues
following the merger may be lower than expected; customer and
employee relationships and business operations may be disrupted by
the merger; the ability to obtain required regulatory and
stockholder approvals, and the ability to complete the merger on
the expected timeframe may be more difficult, time- consuming or
costly than expected; changes in interest rates, general economic
and business conditions; legislative/regulatory changes; the
monetary and fiscal policies of the U.S. government, including
policies of the U.S. Treasury and the Board of Governors of the
Federal Reserve; the quality and composition of the loan and
securities portfolios; demand for loan products; deposit flows;
competition; demand for financial services in the companies’
respective market areas; the companies’ respective
implementation of new technologies and their ability to develop and
maintain secure and reliable electronic systems; changes in the
securities markets; and changes in accounting principles, policies
and guidelines; and other risk factors detailed from time to time
in filings made by TowneBank with the FDIC or Paragon with the SEC.
TowneBank and Paragon undertake no obligation to update or clarify
these forward-looking statements, whether as a result of new
information, future events or otherwise. ###
For
more information contact:
G.
Robert Aston, Jr., TowneBank Chairman and CEO, (757)
638-6780
Robert
C. Hatley, Paragon Commercial Corporation President and CEO, (919)
534-7400
William
B. Littreal, TowneBank Chief Investor Relations Officer and CSO,
(757) 638-6813
Source:
TowneBank and Paragon Commercial Corporation