TowneBank is acquiring the Chesapeake-based Monarch Financial Holdings and Monarch Bank, creating a $7.3 billion community bank that will serve Hampton Roads, Richmond and Northeastern North Carolina.

The two banks, in a joint press conference Thursday at TowneBank’s headquarters in North Suffolk, announced that they have signed a merger agreement.

The deal is pending approval by shareholders of both companies, TowneBank President Robert Aston said. The merger is expected to go to shareholders for a vote during the second quarter of 2016; if approved, the deal would be finalized soon after the vote.

If the merger is approved, TowneBank would have assets of $7.3 billion, deposits of $5.8 billion and loans of $5.4 billion, according to a press release. The company would hold the top ranking in deposit market share, with 20.64 percent of the Hampton Roads’ market, according to the release.

“This combination of the top two performing community banks in the market gives us a dynamic foundation to serve our commercial, mortgage and consumer customers with even greater convenience, expanded product and service offerings and additional lending capacity,” Monarch Chief Executive Officer Brad Schwartz said. “This merger is a great outcome for our company’s shareholders and positions us well for sustainable success over the long term.”

TowneBank is already the region’s largest community bank, with 63,000 clients and 1,700 employees, according to Aston. Monarch employs 650 and has 20,000 account holders, Schwartz said.

According to the agreement, Monarch common shareholders will receive .88 shares of TowneBank common stock for each share of Monarch.

The Chesapeake-based Monarch Bank has 10 branches in Hampton Roads and one on North Carolina’s Outer Banks, according to the press release.

With $6 million in assets, TowneBank currently has 37 branches in Hampton Roads, Richmond and northeastern North Carolina. The company also has real estate and vacation property management divisions.

Some bank branches in close proximity to one another may be consolidated once the merger is complete, Aston said. The bank expects to develop a business plan within 60 to 90 days that will address branch locations and the number of employees needed to run them.

Aston will remain as chairman and chief executive officer of TowneBank. Schwartz will take over as chief operating officer of TowneBank when the merger is complete.

TowneBank has agreed to hire Monarch’s executive team.