First Community Bankshares, Inc., headquartered in Bluefield, Va., and Hometown Bancshares Inc., headquartered in Middlebourne, WV, jointly announced their entry into an Agreement and Plan of Merger.

Pursuant to this agreement, First Community will acquire Hometown, and First Community’s banking subsidiary, First Community Bank, will acquire Hometown’s banking subsidiary, Union Bank, Inc.

As of June 30, Union Bank had total assets of about $402 million. Upon completion of the transaction, First Community is expected to have total consolidated assets of about $3.6 billion with 60 branch locations in four states.

This merger aligns with First Community’s strategic focus on growing low-cost core deposits and positions the combined entity to expand its presence in the Parkersburg-Marietta-Vienna MSA.

“First Community has a 150-year history of community banking excellence in West Virginia. Our partnership with Hometown and Union Bank is a natural expansion into West Virginia markets that are similar in size and makeup to the locations where we’ve had great success across our broader banking footprint. We look forward to bringing the two franchises together to better serve our customers and local communities” said Gary Mills, president and CEO of First Community Bank.

Tim Aiken, president, CEO and director of Hometown and Union Bank, commented, “When considering a long-term partner, we sought a community-minded bank that shares our commitment to providing top-tier banking services with that personal touch. Also, First Community Bank will bring services to our communities that Union Bank currently does not provide, such as Trust and Wealth Management services. We are confident that our combined franchise will serve our communities well and continue to create value for our customers, shareholders, and employees.”

“We are pleased to announce our partnership with Union Bank. This collaboration will further strengthen our robust banking franchise in West Virginia. We believe First Community will benefit from Union’s strong deposit base, while Union’s customers will enjoy the advantages of increased scale, higher lending limits, and enhanced product and technology offerings from First Community,” said William Stafford II, chairman and CEO of First Community.

The agreement provides for the merger of Hometown with and into First Community, with First Community as the surviving corporation. Under the terms of the agreement, each outstanding share of Hometown common stock will be converted into the right to receive 11.706 shares of First Community common stock, which equates to $472.10 per share of Hometown common stock and an aggregate transaction value of about $41.5 million based on a closing price for First Community common stock of $40.33 as of July 18, 2025. First Community expects the transaction to be minimally dilutive to tangible book value per share and to provide high-single digit accretion to earnings per share.

The transaction, which received unanimous approval from both First Community’s and Hometown’s Boards of Directors, is subject to customary closing conditions, including the approval of Hometown’s shareholders and the receipt of all required regulatory approvals. The transaction is expected to be consummated in the first quarter of 2026. At that time, First Community anticipates welcoming Union Bank’s Chief Executive Officer, Tim Aiken, to the First Community team.

D.A. Davidson & Co. served as financial advisor to First Community, and Bowles Rice LLP served as legal counsel. Hovde Group, LLC served as financial advisor to Hometown, and Hunton Andrews Kurth LLP served as legal counsel.

About First Community Bankshares, Inc.

First Community is a financial holding company headquartered in Bluefield, Virginia that provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operates 52 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee. The company reported consolidated assets of $3.2 billion as of March 31. The company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol “FCBC.” Additional investor information is available on the company’s website at www.firstcommunitybank.com.

About Hometown Bancshares, Inc.

Hometown, located in Middlebourne, WV, offers banking products and services through its wholly owned subsidiary Union Bank. Union Bank operates eight locations in Northern West Virginia and has assets totaling $402 million as of June 30. Union Bank is committed to providing exceptional service to its customers while being an exemplary corporate citizen in the communities it serves.