Raleigh, North Carolina, USA skyline.
Virginia’s TowneBank has announced a significant move to enhance its presence in North Carolina by acquiring Dogwood State Bank for $476 million in stock. This decision comes as TowneBank nears completion of its acquisition of Old Point Financial Corp., valued at $203 million, further solidifying its growth strategy along the East Coast. The deal, revealed on Tuesday, will integrate Dogwood’s 17 branches in North Carolina and South Carolina into TowneBank’s existing 15 locations in North Carolina.
The acquisition aims to broaden TowneBank’s reach, particularly along the I-85 corridor, which has become a hub for major employers and economic growth. According to Peter Gwaltney, CEO of the North Carolina Bankers Association, “That’s a strong corridor. There’s some major employers relocating there and just tremendous growth.”
As part of this new venture, Dogwood State Bank’s CEO, Steve Jones, will join the combined institution as president of its Carolinas market. TowneBank Chairman Robert Aston expressed enthusiasm about the merger, highlighting Jones’s leadership and the strong foundation he and his team have established at Dogwood. “We are excited to have Steve and his talented teammates join hands and hearts with our Towne family,” Aston stated in a press release.
Jones noted that maintaining continuity is crucial for the success of the merger. He emphasized the importance of keeping his executive team, stating, “If all of a sudden myself, my executive team and our bankers all left, then what would they be buying?” His commitment to the merger underscores the potential for a seamless transition.
The acquisition of Dogwood introduces a significant new business line for TowneBank in Small Business Administration (SBA) lending. Throughout nearly 11 months of the SBA’s 2025 fiscal year, Dogwood has originated 140 SBA 7(a) loans worth $135 million. In contrast, TowneBank’s SBA production has been limited, with only three loans totaling $820,000 this year. Jones remarked on the added capability this acquisition brings to TowneBank, as establishing an SBA group from scratch is a substantial undertaking.
Dogwood was initially founded in 2021 as the Sound Banking Company in Moorhead City, North Carolina, and underwent significant changes, including its acquisition by Raleigh-based West Town Bancorp in 2017. The bank rebranded and has since expanded, notably acquiring Community First Bancorp in August 2024. Jones highlighted the successful integration of Community First, noting that the retention of deposits has exceeded expectations.
For the quarter ending March 31, Dogwood reported a net income of $7.4 million, a significant increase from $1.8 million during the same period in 2024. This positive performance reflects the bank’s strong operational management and growth potential.
The expansion into North Carolina aligns TowneBank with other regional and superregional banks, such as PNC Financial Services Group, FNB Financial, Fifth Third Bancorp, and Huntington Bancshares, all of which have announced branch expansions in the state. Gwaltney noted that North Carolina’s favorable business environment is attracting banks looking to capitalize on growth opportunities.
TowneBank anticipates finalizing the acquisition of Dogwood early in 2026. Once both Old Point and Dogwood are integrated, TowneBank projects total assets of $22 billion, with $16 billion in loans and $19 billion in deposits. The bank expects an 8% earnings-per-share accretion by 2027 from the Dogwood acquisition.
Jones sees numerous avenues for future growth, emphasizing the advantages of a larger balance sheet that enables TowneBank to pursue bigger loans and cater to a diverse client base. He also mentioned that the integration of TowneBank’s extensive property and casualty insurance business with Dogwood’s offerings will enhance overall service capabilities.
“This creates a really strong organization,” Gwaltney concluded. “Strong leadership with scale now. It will be interesting to see how and where they grow.” The strategic acquisition marks a pivotal moment for TowneBank as it seeks to strengthen its footprint in the competitive banking landscape of the Carolinas.
