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Investing.com - TowneBank (NASDAQ:TOWN), a $2.62 billion regional bank known for its 23-year streak of consistent dividend payments and current 3.05% yield, has announced the acquisition of Dogwood State Bank in an all-stock transaction valued at $476.2 million, as the company continues to expand its presence in the Carolinas and Tennessee.
Keefe, Bruyette & Woods reiterated an Outperform rating on TowneBank with a price target of $42.00 following the announcement of the acquisition.
The transaction is priced at 2.1 times tangible book value with an earnback period of less than four years, according to KBW’s analysis.
KBW noted that Dogwood State Bank will add "top-quartile operating metrics" to TowneBank’s portfolio, including a 1.4% return on assets and a 4.2% net interest margin.
The acquisition is expected to bring 8% fully-phased earnings per share accretion to TowneBank’s 2027 estimates, representing what KBW described as "a continuation of its historical tack-on M&A strategy."
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