Southern National Bancorp of Virginia in McLean has agreed to buy Eastern Virginia Bankshares in Glen Allen.
The $1.1 billion-asset Southern National said in a press release Tuesday that it will pay $178.3 million, or $9.72 a share, for the $1.3 billion-asset Eastern Virginia. The stock deal is expected to close in the second quarter.
Though the companies characterized the deal as a merger of equals, Southern National shareholders will own 51.4% of the company. Southern National and its Sonabank will be the surviving entities. The corporation will remain in McLean, though Richmond will serve as the bank's headquarters. Southern National will have six of the 11 board seats.
Joe Shearin, Eastern Virginia’s president and CEO, will take over those posts at Southern National. Georgia Derrico, Southern National's chairman and CEO, will become executive chairman.
Southern National will have 47 branches, $2 billion in deposits and $1.8 billion in loans when the deal closes. Southern National said it expects to cut 16% of the surviving company’s noninterest expenses, which will include some branch closings. The transaction is expected to be materially accretive to earnings per share with "minimal dilution to tangible book value," the release said.
Eastern Virginia and Southern National have a history together. The companies in 2014 bought minority stakes in Southern Trust Mortgage from Middleburg Financial. Southern National bought a 44%, while Eastern Virginia acquired 4.9%. (Southern Trust executives own 51.1% of the mortgage lender.)
"We believe this is a unique opportunity to combine two very different organizations in order to become an even stronger Virginia based organization with a diverse retail franchise and a dynamic lending based platform," Derrico said in the release. "Through our mutual investment in Southern Trust Mortgage, which has been a tremendous success, we have developed a strong confidence in one another's judgment and banking capabilities."
The agreement comes just a few months after Eastern Virginia moved its corporate headquarters from Tappahannock to Glen Allen, a Richmond suburb.
Southern National was advised by FIG Partners and Alston & Bird. Eastern Virginia was advised by Sandler O'Neill and Troutman Sanders.