Virginia’s TowneBank has announced a significant expansion into North Carolina with the acquisition of Dogwood State Bank for approximately $476 million in stock. This deal comes as TowneBank nears completion of its $203 million acquisition of Old Point Financial Corp., based in Hampton, Virginia. TowneBank’s latest move will enhance its presence in the region by adding Dogwood’s 17 branches across North Carolina and South Carolina to its existing network of 15 locations in North Carolina.
The transaction is expected to bolster TowneBank’s footprint along the East Coast, particularly in the area between Richmond, Virginia, and Greenville, South Carolina, which has been identified as a rapidly growing corridor. Peter Gwaltney, CEO of the North Carolina Bankers Association, remarked on the area’s potential, noting, “There are some major employers relocating there and just tremendous growth.”
TowneBank’s acquisition of Old Point Financial is set to close on September 1, 2023. As part of the new arrangement with Dogwood, CEO Steve Jones has agreed to join the merged entity as president of the Carolinas market. “It has been my pleasure to know Steve for a number of years, and we have always admired the great job he and his team have done building Dogwood State Bank,” said TowneBank Chairman Robert Aston in a press release.
Alongside Jones, Natasha Austin, Dogwood’s chief operating officer, will take on the role of Carolinas director of retail banking, while Christopher Kwiatkowski will oversee government-guaranteed lending. Jones expressed his commitment to the merger, stating, “I thought it was very critical for the success of the merger for our team to stay around, and I’m honored to play a big role in TowneBank’s future growth.”
The acquisition of Dogwood will introduce a vital new line of business for TowneBank in Small Business Administration (SBA) lending. Dogwood has generated $135 million through 140 SBA 7(a) loans during the nearly completed fiscal year 2025, while TowneBank’s SBA production has been minimal, with only $820,000 originating from three loans this year. “I think TowneBank was very excited to have that added capability,” Jones noted.
Founded in 2021 as the Sound Banking Company in Moorhead City, North Carolina, Dogwood was acquired by Raleigh-based West Town Bancorp in 2017. Following a reorganization, the bank was rebranded as Dogwood State Bank. In a display of its growth strategy, Dogwood recently expanded its operations by acquiring Community First Bancorp, worth $683 million, in August 2024.
With Dogwood’s strong financial performance, reporting a net income of $7.4 million for the quarter ending March 31, 2025, the acquisition positions TowneBank among the latest regional banks to enhance their operations in North Carolina. Other financial institutions, such as PNC Financial Services Group and Fifth Third Bancorp, have also been expanding their branch networks in the state, attracted by its positive business environment.
Gwaltney highlighted the ongoing efforts of economic development partnerships in North Carolina, contributing to the state’s appeal for banking institutions. “That’s where banks want to be. They want to be where the growth is,” he stated.
TowneBank anticipates completing the acquisition of Dogwood by early 2026. Following the integration of both Old Point and Dogwood, the bank expects to manage assets totaling $22 billion, with loans amounting to $16 billion and deposits of $19 billion. The company projects an 8% earnings-per-share accretion in 2027 as a result of the Dogwood acquisition.
Jones sees multiple growth opportunities stemming from this merger. “What it does for our bankers is give us a bigger balance sheet, so we’re able to do bigger loans and handle a different type of client,” he explained. Additionally, the integration of TowneBank’s extensive property-and-casualty insurance business and its mortgage services is expected to enhance the offerings available to their clients.
“This creates a really strong organization,” Gwaltney concluded. “Strong leadership with scale now. It will be interesting to see how and where they grow.”
