Form 4: Old Point Director Reports Merger-Related Stock Conversion

Old Point Financial Director Robert F. Shuford reported a change in beneficial ownership following the merger with TowneBank, converting his shares into cash or TowneBank stock.

Summary

• Director Robert F. Shuford reported beneficial ownership of 302,401 shares of Old Point Financial Corp. common stock as of September 1, 2025.
• This total includes 140,931 shares that were inadvertently omitted from Section 16 filings since February 14, 2020.
• The transaction is a result of the merger between Old Point Financial Corp. and TowneBank, effective September 1, 2025, as per an agreement dated April 2, 2025.
• Old Point shareholders had the option to receive $41.00 per share in cash or 1.14 shares of TowneBank common stock for each Old Point share.
• On August 29, 2025, the last trading day before the merger's effective time, Old Point's common stock closed at $42.10 per share, and TowneBank's common stock closed at $36.69 per share.
• All fractional share holdings were paid in cash.

Sentiment

Score: 6

Explanation: The filing reports the expected outcome of a merger, providing shareholders with a choice of cash or stock. The cash offer was slightly below the market price, but the stock offer was competitive. A minor negative is the historical reporting oversight by the director.

Positives

• The merger provided Old Point shareholders with a choice of cash or TowneBank stock, offering flexibility in their investment outcome.
• The stock consideration of 1.14 shares of TowneBank common stock per Old Point share implied a value of approximately $41.82 (1.14 * $36.69) based on TowneBank's closing price on August 29, 2025, which was competitive with the cash offer and close to Old Point's market price.

Negatives

• The cash consideration of $41.00 per share was lower than Old Point's closing price of $42.10 on the last trading day before the merger's effective time.
• The inadvertent omission of 140,931 shares from previous Section 16 filings by the director since February 14, 2020, indicates a past reporting oversight.

Risks

• Shareholders who elected to receive TowneBank stock are now subject to the future performance and market fluctuations of TowneBank shares.
• The allocation and proration procedures set forth in the Merger Agreement could result in shareholders not receiving their preferred mix of cash and stock consideration.

Future Outlook

The filing primarily reports a completed transaction and a resulting change in beneficial ownership. As Old Point Financial Corp. has been acquired, its independent future outlook is no longer applicable. The future outlook for former Old Point shareholders who elected stock consideration now depends on the performance of TowneBank.

Industry Context

The banking sector frequently experiences consolidation through mergers and acquisitions, driven by factors such as economies of scale, market expansion, and competitive pressures. This merger between Old Point Financial Corp. and TowneBank is consistent with this trend, aiming to create a larger, potentially more competitive regional banking entity.

Comparison to Industry Standards

• The merger consideration, offering $41.00 cash or 1.14 shares of TowneBank stock per Old Point share, aligns with the typical structures seen in regional bank mergers, which often include a mix of cash and stock to provide flexibility and allow target shareholders to participate in the combined entity's future.
• Based on TowneBank's closing price of $36.69 on August 29, 2025, the stock component implies a value of approximately $41.82 per Old Point share (1.14 * $36.69). This is competitive with the cash offer of $41.00 and close to Old Point's last trading price of $42.10, suggesting a fair valuation within the context of recent banking sector M&A.
• While specific comparable company valuations are not provided in this Form 4, regional bank acquisitions in the current market environment typically trade at price-to-tangible book value multiples ranging from 1.2x to 1.8x and price-to-earnings multiples from 10x to 15x, depending on the target's profitability, growth prospects, and market conditions. The specific valuation multiples for this transaction would require Old Point's financial statements, which are not part of this Form 4.

Corporate Governance

Related Party Transactions

• The conversion of Director Robert F. Shuford's Old Point common stock into cash or TowneBank common stock as part of the merger, which is a transaction involving an insider.

Stakeholder Impact

• Shareholders of Old Point Financial Corp. received consideration for their shares, either cash or TowneBank stock, concluding their investment in Old Point.
• Shareholders of TowneBank potentially benefit from an expanded operational footprint and market presence due to the acquisition.
• Employees and customers of Old Point will transition to TowneBank, which may involve changes in operations, branding, and service offerings.

Next Steps

• Former Old Point shareholders who elected TowneBank stock will now monitor TowneBank's performance.
• The combined entity will proceed with integrating operations and realizing merger synergies.

Key Dates

Keywords

Old Point Financial, OPOF, TowneBank, Merger, Acquisition, Form 4, Insider Transaction, Beneficial Ownership, Bank Merger, Financial Services