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Shareholder vote set on City Holding acquisition of Va. bank

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Shareholders of Community Financial Corp., based in Staunton, Va., will vote Jan. 8 on whether to accept an offer to be acquired by City Holding Co. of Charleston.

On Aug. 2, City Holding announced that it had executed an agreement to acquire Community Financial Corp. of Staunton, Va., in a $25.3 million transaction. The two companies expect the deal to close in the first quarter of 2013, pending regulatory approvals, the approval of Community shareholders, and the completion of other customary closing conditions.  The directors of Community have agreed to vote their shares in favor of the merger.

Community operates nine branches along the I-81 corridor in western Virginia and two branches in Virginia Beach, Va.

City Holding is a $2.9 billion diversified financial holding company. Through City National Bank, it operates 73 branch locations serving communities across West Virginia, Ohio, Kentucky and Virginia. Based upon profitability, asset quality and capital position, it was chosen by Bank Director magazine as the third best performing bank in the U.S. in 2011.

As of Sept. 30, City Holding had total assets of $2.9 billion, total deposits of $2.4 billion, and shareholders' equity of $328 million.

Community Financial has assets of about $486.1 million. The acquisition provides City Holding Co. with an entry into markets in the growing areas of northern Virginia.

City Holding Co. went seven years without an acquisition before it acquired Virginia Savings Bank last year.

In a conference call on Aug. 3, Charles R. (Skip) Hageboeck, president and CEO of City, noted that the unemployment rates in Community's service areas are below the national average and the average household income is higher than the national average.

"Demographically, we think, it makes very good sense," he said of the acquisition.

Community's presence in Virginia Beach has the potential for strong loan growth for City, Hageboeck said at the time.