FCBC closes Hometown Bancshares acquisition in $34.7M deal
Virginia regional bank expands footprint with eight West Virginia branches, expects high-single digit EPS accretion
First Community Bankshares, Inc. (NASDAQ: FCBC) completed its acquisition of Hometown Bancshares, Inc. on Monday, expanding the Virginia-based regional bank's presence into West Virginia through a stock-for-stock transaction valued at approximately $34.7 million.
The deal, originally announced with an aggregate value of $41.5 million based on First Community's closing price of $40.33 on July 18, 2025, was priced lower at completion due to the acquirer's share price decline. Under the agreement terms, each outstanding share of Hometown common stock converted into the right to receive 11.706 shares of First Community common stock, equating to $472.10 per Hometown share based on July 2025 pricing.
Hometown Bancshares' subsidiary, Union Bank, Inc. will merge into First Community Bank, bringing eight branch locations in West Virginia under the First Community brand. The merger received unanimous approval from both companies' boards, Hometown shareholders on December 2, 2025, and regulatory clearance from the Federal Reserve Bank of Richmond and the Virginia Bureau of Financial Institutions.
First Community Bankshares' shares were essentially flat in Monday afternoon trading, changing hands at $33.94, down 0.4 percent. The muted market reaction suggests the acquisition was well-anticipated by investors or viewed as modest in scale relative to the company's $624 million market capitalization.
The transaction is expected to be minimally dilutive to tangible book value per share and deliver high-single digit accretion to earnings per share for First Community, according to regulatory filings and company statements. The strategic move positions First Community to strengthen its community banking footprint across Virginia and West Virginia, building on its existing operations through its subsidiary First Community Bank.
Based in Bluefield, Virginia, First Community Bancshares operates as a financial holding company offering personal and commercial loans, deposit accounts, and wealth management solutions. The company's shares have traded within a 52-week range of $30.29 to $42.77, and it currently pays a dividend yielding 3.47 percent with a payout of $1.24 per share.
Analysts maintain a cautious outlook on the stock. According to market data, First Community carries a consensus price target of $38.00, representing approximately 12 percent upside from current levels. One analyst currently rates the shares a hold. The company trades at 12.7 times trailing earnings and 1.22 times book value, with a price-to-sales ratio of 3.80.
Regional bank mergers have accelerated across the United States as mid-sized institutions seek scale to compete with larger rivals and navigate rising operating costs. The Hometown acquisition represents First Community's strategic response to these industry dynamics, expanding its deposit base and geographic reach while maintaining its community-focused banking model.
For 2026, merger integration remains a key focus for First Community's management team. The company will need to successfully combine Union Bank's operations, retain customer relationships, and realize the expected cost synergies to deliver the projected earnings accretion. Integration success will be closely monitored by investors as a gauge of management's execution capabilities.
The banking sector faces continued pressure from net interest margin compression and economic uncertainty, making scale and operational efficiency increasingly critical for regional players. First Community's expanded footprint in West Virginia provides additional diversification and cross-selling opportunities, though the ultimate financial impact will depend on integration effectiveness and broader economic conditions in its markets.