Suffolk-based TowneBank and Raleigh-based Paragon Commercial Corp., the parent company of Paragon Commercial Bank, have agreed to a merger that will create a $9.7-billion community bank, company officials announced on Thursday.

The acquisition of Paragon will expand Towne’s community banking franchise into Charlotte and Raleigh, N.C., adding to Towne’s current presence in Hampton Roads, Richmond and northeastern North Carolina.

Under the terms of the merger agreement, common shareholders of Paragon will receive a fixed exchange ratio of 1.7250 shares of TowneBank common stock for each outstanding share of Paragon common stock.

This implies a deal value per share of approximately $323.7 million, based on TowneBank’s closing stock price of $34.35 on April 26. Pending customary regulatory and shareholder approvals, the merger is scheduled to close in the fourth quarter of 2017.

Towne plans to operate in the Raleigh, Charlotte, and Cary markets as Paragon Bank, a division of TowneBank.

“We are really excited to welcome the extraordinarily talented Paragon team into our Towne family,” said G. Robert Aston, Jr., chairman and chief executive officer of TowneBank.

“From our humble beginnings in 1999, both Towne and Paragon have prospered through a caring culture of serving others and enriching lives while continuing to build a great community asset for the communities we serve.”

“We have had great admiration for the TowneBank team for many years and have been impressed by the way they’ve grown their franchise into one of the top community banks in Virginia and North Carolina,” stated Robert C. Hatley, president and chief executive officer of Paragon.

“We believe partnering with TowneBank will provide us with a strong foundation and additional capacity to deliver our unique private banking experience business model to businesses, professionals, executives and entrepreneurs in our target markets.”