Old Point Financial Faces Legal Challenges Amid Merger with TowneBank

Old Point Financial faces shareholder legal challenges over alleged disclosure deficiencies in merger documents with TowneBank. Despite this, the company believes the claims are without merit and has supplemented disclosures to avoid delays and litigation risks. Spark, TipRanks' AI Analyst, rates OPOF as Neutral due to robust financial performance and growth potential from the merger, but notes potential overbought and overvaluation concerns.

Two prominent stocks, TowneBank (TOWN) and Ralph Lauren (RL), have recently raised their dividends and are set to go ex-dividend this week. Despite the potential for short-term volatility, these stocks offer capital appreciation potential and robust fundamentals, according to analysts.

TowneBank, a regional bank operating in Hampton Roads, Central Virginia, and parts of North Carolina, increased its quarterly cash dividend by 8% to $0.27. The record date is June 27, 2025, meaning shareholders should buy the stock by June 26th to be eligible for the payout on July 11. TowneBank has consistently grown its dividends for 13 consecutive years, with a 5-year CAGR of 6.8%. The forward dividend yield is 3.3% at current stock prices. The bank expects cash flows of $760 million from its securities portfolio in the next two years [1].

TowneBank's recent acquisition of Old Point Financial is expected to add approximately $1.5 billion in assets and a low-cost deposit base with an average cost of 1.69% to the company. The deal is anticipated to result in 45% cost savings in its non-interest expense base and a 10% accretion to EPS in 2026. The significant branch overlap between the two banks is expected to lead to revenue synergies that will accelerate profitability [1].

Ralph Lauren (RL), a global luxury retailer, raised its quarterly cash dividend by 10% to $0.9125 per share, bringing the total annual dividend to $3.65 per share. The dividend is payable to shareholders on July 11 with a record date of June 27. Ralph Lauren has grown its dividend for three consecutive years, with a 3-year CAGR of 6.3%. The forward dividend yield is 1.35% at current stock price levels [1].

Ralph Lauren has shifted its business model to cater to a less price-sensitive customer base, resulting in a significant boost in gross margins. International business now represents 57% of the company's topline, up from 45% pre-pandemic. The company has also diversified its supply chain, with no single country accounting for more than 20% of its production. DTC (Direct-to-Consumer) now forms two-thirds of the business, with a record 5.9 million new consumers added to its DTC businesses in fiscal 2025 [1].

Both stocks have been rated as "Buy" by analysts, with TowneBank having the potential to revisit its 52-week high of around $38, representing nearly 12% upside from current price levels. Ralph Lauren's PEG ratio of 1.9 vs. its historical 5-year average of 3.6 suggests a potential 15% upside from current levels [1].

Despite these positive fundamentals, TowneBank is facing shareholder legal challenges over alleged disclosure deficiencies in its merger documents with Old Point Financial. The company believes the claims are without merit and has supplemented disclosures to avoid delays and litigation risks. Spark, TipRanks' AI Analyst, rates Old Point Financial (OPOF) as Neutral due to robust financial performance and growth potential from the merger, but notes potential overbought and overvaluation concerns [1].

References:

[1] https://www.forbes.com/sites/sasirekhasubramanian/2025/06/24/2-stocks-with-dividend-hikes-upcoming-ex-dividend-dates-upside-potential/