The management of American National Bankshares Inc. has long viewed Roanoke, Va., as an "attractive" banking market.

In September 2016, the Danville, Va.-based company hired six commercial loan officers in the Roanoke market. American National has also established a banking office in the market since the hiring of the officers.

Considering the company's increasing efforts to promote its brand in Roanoke, American National Chairman Charles Majors contacted director William Rakes of Roanoke-based HomeTown Bankshares Corp. by telephone in January 2018. Majors, who has known Rakes personally and professionally for many years, suggested that they meet informally to further understand each company's business, operations, culture and philosophy.

Majors, Rakes and a few others met Feb. 13, where it was mentioned that American National may be interested in pursuing a deal with HomeTown if HomeTown was interested. No specific terms were discussed at this meeting.

Discussions continued, and eventually, on July 9, American National delivered a preliminary nonbinding letter of intent to acquire HomeTown. The financial terms provided for an all-stock deal with a fixed exchange ratio between 0.4010 to 0.4070 share of American National common stock for each HomeTown common share.

On July 16, HomeTown requested changes to the exchange ratio, among other things. American National on July 24 delivered to HomeTown a revised preliminary nonbinding letter of intent, increasing the exchange ratio to 0.4150.

The companies executed the merger agreement Oct. 1. The agreement also provides that HomeTown must pay American National a $4.0 million termination fee if the deal is terminated under certain circumstances.