QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL SHAREHOLDER MEETINGS

The following are answers to certain questions that you may have regarding the merger and the special meetings of the shareholders of Grayson and Cardinal. You should carefully read this entire joint proxy statement/prospectus because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to this joint proxy statement/prospectus.

You are receiving this document because Grayson and Cardinal are each holding a special meeting of shareholders to vote on the proposals necessary to complete the merger. The merger cannot be completed unless, among other things:

Each of the Grayson Board and the Cardinal Board has unanimously determined that the merger is in the best interest of its shareholders, approved the merger and recommends that its shareholders vote “FOR” the merger proposal. If either Grayson or Cardinal does not receive shareholder approval, the merger would not be completed, and Grayson and Cardinal would not be able to realize the expected benefits of the transaction, including those described under “—Why do Grayson and Cardinal want to merge?” below. In addition, Grayson and Cardinal would have incurred substantial merger-related expenses and experienced potential disruptions in their relationships with customers, employees or vendors and the diversion of management attention, without realizing the expected benefits of the merger. Further, if the merger agreement is terminated because Grayson’s or Cardinal’s shareholders fail to approve the merger, then the applicable party would be required to reimburse the other party for up to $250,000 of out of pocket expenses.

In addition, both Grayson and Cardinal are soliciting proxies from their shareholders with respect to proposals to adjourn the Grayson and Cardinal special meetings, as applicable, if necessary or appropriate, to solicit additional proxies in favor of their respective proposals to approve the merger agreement, if there are insufficient votes at the time of such adjournment to approve such proposal.

Grayson and Cardinal will hold separate special meetings to obtain these approvals. This joint proxy statement/prospectus contains important information about the merger and the other proposals being voted on at the special meetings and you should read it carefully. It is a joint proxy statement because both the Grayson Board and the Cardinal Board are soliciting proxies from their respective shareholders. It is a prospectus because Parkway will issue shares of Parkway common stock to holders of Grayson and Cardinal common stock in connection with the merger. The enclosed materials allow you to have your shares voted by proxy without attending your respective special meeting. Your vote is important. We encourage you to submit your proxy as soon as possible.

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After the merger, Parkway will be significantly larger than either Cardinal or Grayson and will be better able to compete in the New River Valley of Virginia and contiguous markets. Larger banks with greater geographical reach can serve larger customers, and such customers may have larger credit needs. Banking organizations with more than $500 million of total assets, as Parkway would be following the merger, tend to be more efficient and, therefore, more profitable than smaller institutions like Grayson and Cardinal. Additionally, banking organizations with more than $500 million of total assets tend to trade at higher multiples of tangible book value and earnings per share than institutions the size of Grayson and Cardinal.

Grayson and Cardinal expect that the increase in asset size and a larger shareholder base of Parkway following the merger should result in more liquidity in the market for shares of Parkway common stock than in the markets for Grayson and Cardinal common stock.

Further, Parkway and the Surviving Bank would have a strong team of employees and directors. The Grayson Board and the Cardinal Board are compatible and share a commitment to the creation of shareholder value through a locally owned and managed community bank.

Each of the Grayson Board and the Cardinal Board has unanimously determined that the merger is fair and in the best interest of its respective shareholders and recommends that its shareholders vote for their respective proposals. You should review the reasons for the merger described in greater detail under the sections entitled, “The Merger – Grayson’s Reasons for the Merger; Recommendation of the Grayson Board” and “The Merger – Cardinal’s Reasons for the Merger; Recommendation of the Cardinal Board,” beginning on pages [•] and [•], respectively.

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Cardinal : The Cardinal special meeting is scheduled to take place on [•], [•], 2016 at [•] [a][p].m., local time, at the Bank of Floyd Conference Center, 101 Jacksonville Circle, Floyd, Virginia.

Cardinal : Holders of record of Cardinal common stock at the close of business on [•], 2016, which is the date that the Cardinal Board has fixed as the record date for the Cardinal special meeting, are entitled to vote at the Cardinal special meeting.

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Cardinal : The presence at the Cardinal special meeting, in person or by proxy, of holders of a majority of the outstanding shares of Cardinal common stock entitled to vote at the Cardinal special meeting will constitute a quorum for the transaction of business. Abstentions, if any, will be included in determining the number of shares present at the Cardinal special meeting for the purpose of determining the presence of a quorum.

Cardinal : Approval of the Cardinal merger proposal requires the affirmative vote of more than two-thirds of all of the outstanding shares of Cardinal common stock entitled to vote on the merger as of the close of business on [•], 2016, the record date for the Cardinal special meeting. If you (1) fail to submit a proxy or vote in person at the Cardinal special meeting, (2) mark “ABSTAIN” on your proxy or (3) fail to instruct your bank or broker how to vote with respect to the proposal to approve the merger agreement, it will have the same effect as a vote “AGAINST” the proposal. Assuming a quorum is present, approval of the Cardinal adjournment proposal requires the affirmative vote of a majority of the shares represented at the Cardinal special meeting.

Under the rules of applicable securities exchanges, brokers who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that the securities exchanges determine to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Grayson special meeting and the Cardinal special meeting are such “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.

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Grayson : If you are a Grayson shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares:

Cardinal : If you are a Cardinal shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares:

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Cardinal : With respect to the Cardinal merger proposal, if you (1) fail to submit a proxy or vote in person at the Cardinal special meeting, (2) mark “ABSTAIN” on your proxy or (3) fail to instruct your bank or broker how to vote, it will have the same effect as a vote “AGAINST” the proposal. With respect to the Cardinal adjournment proposal, if you (1) fail to submit a proxy or vote in person at the Cardinal special meeting or (2) fail to instruct your bank or broker how to vote, it will have no effect on the outcome of the vote on such proposal. If you mark “ABSTAIN” on your proxy, it will have the same effect as a vote “AGAINST” the proposal.

Cardinal : Yes. If you are a holder of record of Cardinal common stock, you may revoke any proxy at any time before it is voted by (1) signing and returning a proxy card with a later date, (2) voting by telephone or the Internet at a later time, (3) delivering a written revocation letter to Cardinal’s corporate secretary or (4) attending the Cardinal special meeting in person, notifying the corporate secretary and voting by ballot at the Cardinal special meeting. Attendance at the Cardinal special meeting will not automatically revoke your proxy. A revocation or later-dated proxy received by Cardinal after the Cardinal special meeting will be ineffective. Cardinal’s corporate secretary’s mailing address is: 101 Jacksonville Circle, Floyd, Virginia 24091, Attention: Corporate Secretary. If you hold your shares in “street name” through a bank or broker, you should contact your bank or broker if you want to revoke your proxy.

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Furthermore, the holders of Grayson or Cardinal common stock will have basis in Parkway common stock received equal to the net of: (1) the basis of Grayson or Cardinal common shares for which it was exchanged, minus (2) the amount of any cash received in the exchange, plus (3) the amount of any gain recognized on the exchange. The holding period of Parkway common stock received in exchange for shares of Grayson or Cardinal common stock will include the holding period of the Grayson or Cardinal common stock for which it is exchanged.

For further information, see the section entitled, “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page [•].

The U.S. federal income tax consequences described above may not apply to all holders of Grayson or Cardinal common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your own tax advisor to determine the particular tax consequences of the merger to you.

Cardinal : If you are unable to locate your original Cardinal stock certificate(s), you should contact Cardinal’s transfer agent, Broadridge Corporate Issuer Solutions, Inc., at P.O. Box 1342, Brentwood, New York 11717, or at (877) 830-4936.

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Following the merger, Computershare will act as Parkway’s transfer agent, and any inquiries should be directed to Computershare, at 250 Royall Street, Canton, MA 02021, or at (800) 368-5948.

Cardinal : In addition to solicitation of proxies by Cardinal by mail, proxies may also be solicited by Cardinal’s directors and employees personally, and by telephone, facsimile or other means. Cardinal has also retained Regan & Associates to assist in soliciting proxies for a fee of approximately $8,000.00. For more information on solicitation of proxies in connection with the Cardinal special meeting, see the section entitled, “Cardinal Special Meeting of Shareholders—Solicitation of Proxies,” beginning on page [•].

Cardinal : If you have any questions concerning the merger or this joint proxy statement/prospectus, would like additional copies of this joint proxy statement/prospectus or need help voting your shares of Cardinal common stock, please contact: Mark A. Smith, Interim President and Chief Executive Officer, 101 Jacksonville Circle, Floyd, Virginia 24091, at (540) 745-4191.

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VOTE “FOR” THE MERGER.

Proposal No. 2 – Adjournment of the Special Meeting

If Grayson does not receive a sufficient number of votes to constitute a quorum of the common stock or approve the merger agreement, it may propose to adjourn the special meeting for the purpose of soliciting additional proxies to establish such quorum or approve the merger agreement. Grayson does not currently intend to propose adjournment of the special meeting if there are sufficient votes to approve the merger agreement. If approval of the proposal to adjourn the special meeting for the purpose of soliciting additional proxies is submitted to the Grayson shareholders for approval, the approval requires that the votes cast for the proposal exceed the votes cast against the proposal, whether or not a quorum is present.

THE GRAYSON BOARD UNANIMOUSLY RECOMMENDS THAT GRAYSON SHAREHOLDERS

VOTE “FOR” THE ADJOURNMENT PROPOSAL.

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CARDINAL SPECIAL MEETING OF SHAREHOLDERS

General

This section contains information about the Cardinal special meeting that has been called to vote upon the matters described below.

Cardinal is mailing this joint proxy statement/prospectus on or about [•], 2016, to holders of shares of Cardinal common stock at the close of business on [•], 2016, which is the record date for the Cardinal special meeting. Together with this joint proxy statement/prospectus, Cardinal is also sending a notice of the Cardinal special meeting and a form of proxy that is solicited by the Cardinal Board for use at the Cardinal special meeting to be held on [•], 2016 at [•] [a][p].m., local time, at the Bank of Floyd Conference Center, 101 Jacksonville Circle, Floyd, Virginia 24091, and at any adjournment or postponement of that meeting.

Matters to be Considered

At the special meeting, Cardinal shareholders will be asked to:

Recommendations of the Cardinal Board

The Cardinal Board unanimously (1) determined that the merger agreement is in the best interests of Cardinal and its shareholders, (2) approved and adopted the merger agreement and (3) recommends that Cardinal shareholders vote “ FOR ” the Cardinal merger proposal. The Cardinal Board also unanimously recommends that Cardinal shareholders vote “ FOR ” the Cardinal adjournment proposal.

Record Date and Voting Rights

The Cardinal Board has fixed the close of business on [•], 2016 as the record date for determining the shareholders entitled to notice of and to vote at the Cardinal special meeting or any postponement or adjournment thereof. Accordingly, Cardinal shareholders are only entitled to notice of and to vote at the Cardinal special meeting if they were a record holder of Cardinal common stock at the close of business on the record date. On the record date, there were [1,535,733] shares of Cardinal common stock outstanding, held by approximately [630] holders of record.

To have a quorum that permits Cardinal to conduct business at the Cardinal special meeting, it needs the presence, whether in person or by proxy, of the holders of Cardinal common stock representing a majority of the shares outstanding on the record date and entitled to vote. A Cardinal shareholder is entitled to one vote for each outstanding share of Cardinal common stock held as of the close of business on the record date.

Holders of shares of Cardinal common stock present in person at the Cardinal special meeting but not voting, and shares of Cardinal common stock for which Cardinal has received proxies indicating that its holders have abstained, will be counted as present at the Cardinal special meeting for purposes of determining whether there is a quorum for transacting business. Shares held in “street name” that have been designated by brokers on proxies as not voted will not be counted as votes cast for or against any proposal. Broker shares that are voted on any matter at the Cardinal special meeting will be counted as present at the Cardinal special meeting for purposes of determining whether there is a quorum for transacting business.

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Votes Required

Vote Required for the Merger Proposal (Proposal No. 1)

Approval of the merger proposal requires the affirmative vote of more than two-thirds of the shares of Cardinal common stock outstanding on the record date and entitled to vote.

Abstentions and broker non-votes will not count as votes cast. Because, however, approval of the merger proposal requires the affirmative vote of more than two-thirds of the shares of Cardinal common stock outstanding on the record date, abstentions and broker non-votes will have the same effect as votes against the merger proposal. In addition, a failure to vote Cardinal shares by proxy or in person will have the same effect as a vote against the merger proposal.

Vote Required for the Adjournment Proposal (Proposal No. 2)

The approval of the adjournment proposal requires the affirmative vote of a majority of shares represented at the Cardinal special meeting.

Broker non-votes will not count as votes cast for the adjournment proposal and will have no effect for purposes of determining whether the adjournment proposal has been approved.

Stock Ownership of Cardinal Directors and Executive Officers

As of the record date, directors and executive officers of Cardinal and their affiliates beneficially owned [136,806] shares of Cardinal common stock. All of Cardinal’s directors have entered into support agreements pursuant to which, subject to certain exceptions, they have agreed to vote the shares of Cardinal common stock that they own in favor of the merger proposal. As of the record date, [117,593] shares, representing approximately [7.66]% of the aggregate voting power of Cardinal shares entitled to vote at the Cardinal special meeting, were subject to a support agreement.

Voting of Proxies

By Mail

A proxy card is enclosed for the use of Cardinal shareholders. To submit a proxy by mail, complete, sign, and date the enclosed proxy card and, if the Cardinal shareholder is a shareholder of record, return it as soon as possible in the enclosed postage-paid envelope. Street name shareholders should refer to the information card provided by his or her bank, broker, or other nominee. When the enclosed proxy card is returned properly executed, the shares of Cardinal common stock represented by it will be voted at the Cardinal special meeting in accordance with the instructions contained therein.

If the accompanying proxy card is returned properly executed without indication as to how to vote, the Cardinal common stock represented by each such proxy will be voted in favor of all matters for consideration at the Cardinal special meeting as follows: (1)  “FOR”  the Cardinal merger proposal (Proposal No. 1) and (2)  “FOR”  the Cardinal adjournment proposal (Proposal No. 2).

If the Cardinal special meeting is postponed or adjourned, all proxies will be voted at the postponed or adjourned Cardinal special meeting in the same manner as they would have been voted at the originally scheduled Cardinal special meeting except for any proxies that have been properly withdrawn or revoked.

Your vote is important! Please complete, sign, date, and return promptly the proxy card in the enclosed postage-paid envelope whether or not you plan to attend the Cardinal special meeting in person.

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By Internet or Telephone

You may vote your shares via the Internet, by accessing the site listed on the enclosed proxy card and following the instructions, or by telephone, by calling the toll-free number listed on the enclosed proxy card on a touch-tone phone and following the recorded instructions.

Street name shareholders may also be eligible to vote their shares over the Internet or by telephone, by following the voting instructions provided by the bank, broker or other nominee that holds the shares, using the Internet address or telephone number provided on the voting instruction card (if the bank, broker or other nominee provides this voting method.

Voting in Person

If a Cardinal shareholder wishes to vote in person at the Cardinal special meeting, a ballot will be provided at the meeting. However, street name shareholders must obtain a legal proxy, executed in such shareholder’s favor, from the holder of record to be able to vote those shares at the meeting.

Revocation of Proxies

Any Cardinal shareholder giving a proxy may change or revoke it at any time before the polls are closed for voting at the Cardinal special meeting. If a Cardinal shareholder grants a proxy with respect to the shareholder’s Cardinal shares and then attends the Cardinal special meeting in person, such attendance at the Cardinal special meeting or at any adjournment or postponement of the Cardinal special meeting will not automatically revoke the proxy. A Cardinal shareholder of record may change or revoke a proxy by:

If a Cardinal shareholder chooses the first method, he or she must submit the new proxy or notice of revocation to Cardinal’s Secretary at 101 Jacksonville Circle, Floyd, Virginia 24091, no later than the beginning of the Cardinal special meeting or, if the Cardinal special meeting is adjourned or postponed, before the adjourned or postponed meeting is actually held.

If a Cardinal shareholder is a street name shareholder, he or she must follow the instructions found on the voting instruction card provided by his or her bank, broker, or other nominee, or contact his or her bank, broker, or other nominee, in order to change or revoke a previously given voting instructions.

If assistance is needed in changing or revoking a proxy, please contact Suzanne S. Yearout, Corporate Secretary, by calling (540)  745-4191 or by writing to the Bank of Floyd at 101 Jacksonville Circle, Floyd, Virginia 24091, Attn: Corporate Secretary.

Solicitation of Proxies

This solicitation is made on behalf of the Cardinal Board, and Cardinal will pay the costs of soliciting and obtaining proxies, including the cost of reimbursing brokers and other custodians, nominees, and fiduciaries for their expenses incurred in forwarding these proxy materials to Cardinal shareholders. Proxies may be solicited, without extra compensation, by Cardinal’s directors, officers, and employees in person or by mail, telephone or other electronic means. Cardinal has also engaged Regan & Associates, a proxy soliciting firm, to assist in the solicitation of proxies for a fee of approximately $8,000.00.

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Appraisal Rights

Each Cardinal shareholder has the right to assert appraisal rights with respect to the merger and demand in writing that he or she be paid the fair value of the shares of his or her Cardinal common stock under applicable provisions of Virginia law following consummation of the merger. In order to exercise and perfect appraisal rights, a Cardinal shareholder generally must:

A copy of the applicable Virginia statutory provisions is included in this joint proxy statement/prospectus as Appendix D. For more information on the assertion of appraisal rights by a Cardinal shareholder, see the section entitled, “The Merger – Appraisal Rights,” beginning on page [•].

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CARDINAL PROPOSALS

Proposal No. 1 – Approval of the Merger

At the Cardinal special meeting, Cardinal shareholders will be asked to approve the merger agreement proposal providing for the merger of Cardinal and Grayson with and into Parkway. Cardinal shareholders should read this joint proxy statement/prospectus carefully and in its entirety, including the appendices, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Appendix A.

After careful consideration, the Cardinal Board, by a unanimous vote of all directors, approved the merger agreement and the merger, to be advisable and in the best interests of Cardinal and its shareholders. See the section entitled, “The Merger —Cardinal’s Reasons for the Merger; Recommendation of the Cardinal Board” for a more detailed discussion of the recommendation of the Cardinal Board.

THE CARDINAL BOARD UNANIMOUSLY RECOMMENDS THAT CARDINAL SHAREHOLDERS

VOTE “FOR” THE MERGER.

Proposal No. 2 – Adjournment of the Special Meeting

If Cardinal does not receive a sufficient number of votes to constitute a quorum of the common stock or approve the merger agreement, it may propose to adjourn the special meeting for the purpose of soliciting additional proxies to establish such quorum or approve the merger agreement. Cardinal does not currently intend to propose adjournment of the special meeting if there are sufficient votes to approve the merger agreement. If approval of the proposal to adjourn the special meeting for the purpose of soliciting additional proxies is submitted to the Cardinal shareholders for approval, the approval requires the affirmative vote of a majority of shares represented at the Cardinal special meeting.

THE CARDINAL BOARD UNANIMOUSLY RECOMMENDS THAT CARDINAL SHAREHOLDERS

VOTE “FOR” THE ADJOURNMENT PROPOSAL.

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THE MERGER

The following is a discussion of the merger. This summary may not contain all of the information about the merger that is important to you. Holders of Grayson common stock and Cardinal common stock should read carefully this joint proxy statement/prospectus in its entirety, including the appendices, for more detailed information concerning the merger and the merger agreement. In particular, you are directed to the merger agreement, including the related plan of merger and the bank merger agreement, copies of which are attached as Appendix A and are incorporated in this joint proxy statement/prospectus by reference.

Background of the Merger

Each of the Grayson Board and the Cardinal Board and their respective senior management have from time to time separately engaged in long-term strategic reviews and have considered ways to enhance shareholder value and their respective companies’ performance and prospects in light of competitive and other relevant developments. For each company, these reviews have included periodic discussions concerning potential mergers that could further its strategic objectives and the potential benefits and risks of any such transactions.

In both 2012 and 2013, the Grayson Board engaged in a routine strategic review process in which it considered various ways to enhance shareholder value. As part of this process, the Grayson Board emphasized its desire to remain a locally focused and locally managed community bank which is largely reflective of its shareholder base. The Grayson Board expressed its ongoing commitment to making a broad range of banking services available to smaller communities, which would otherwise be underserved by larger financial institutions, as well as their continued belief that these services can be offered in a manner that will create value for the company’s shareholders. In October 2014, the Grayson Board and its financial advisor, Raymond James, modeled a select number of potential business combinations, including a merger of equals with Cardinal. In November 2014, following the announcement of the resignation of Cardinal’s and the Bank of Floyd’s former Chief Executive Officer, Michael Larrowe, J. Allan Funk, President and Chief Executive Officer of Grayson, contacted John Paul Houston, the former Chairman of the Cardinal Board, to introduce himself. At Mr. Funk’s suggestion, Mr. Houston and Thomas M. Jackson, Jr., Chairman of the Grayson Board, also met to introduce themselves and discuss their respective banks.

In 2012, at the 2012 annual meeting of shareholders, Cardinal’s shareholders appointed three new directors to the Cardinal Board causing a 50% shift in the composition of the Cardinal Board. The newly elected Cardinal Board then appointed Michael Larrowe as the Chief Executive Officer. Following these events, the Cardinal Board and Cardinal’s management engaged in various strategic initiatives in 2013 and 2014 to rebuild the Bank of Floyd’s infrastructure, attract new customers and grow the Bank of Floyd. Following Mr. Larrowe’s departure in November 2014, the Cardinal Board reviewed various strategic priorities, including the need for capital. In December 2014, and in the face of regulatory pressure to develop a capital plan, the Cardinal Board discussed various capital raising alternatives with its financial advisor, Banks Street Partners, but ultimately determined that an equity capital raise would not be in the best interests of its shareholders at that time due to a number of factors, including the dilution that shareholders likely would experience as a result of such a capital raise. In April 2015, the Cardinal Board engaged CCG Catalyst Consulting Group (“CCG”) to assist the Cardinal Board and Cardinal’s management with strategic planning. In July 2015, the Cardinal Board vastly expanded CCG’s role by contracting with CCG to provide the services of a special advisor and consultant, Mr. Litz Van Dyke, to take an active role in the strategic planning process. At the conclusion of the planning process, the Cardinal Board concluded that the best course of action, and the highest priority for Cardinal, was to engage in a merger of equals transaction. In addition to providing the best outcome for Cardinal shareholders, the Cardinal Board believed that preserving the community banking model in the communities served by the Bank of Floyd was a high priority because of, among other things, the possible strategic advantages to offering customers the option to use a locally-owned bank in the face of the influx of “super-regional” banks into the Roanoke Valley and surrounding areas.

In May 2015, the Cardinal Board met with Mr. Van Dyke and representatives from Gentry Locke and engaged in a robust strategic planning session. During this meeting, the Cardinal Board considered the strategic direction of Cardinal and the Bank of Floyd and discussed a number of options, including a merger of equals, for Cardinal and the Bank of Floyd with a view towards increasing value for shareholders.

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In June 2015, Mr. Funk again contacted Mr. Houston to discuss their respective banks and request an in-person meeting. Mr. Funk and Blake M. Edwards, Jr., Chief Financial Officer of Grayson, then prepared a presentation that described a potential combination of Grayson and Cardinal and, on July 3, 2015, they met with Mr. Houston, Dr. J. Howard Conduff, Jr., a member of the Cardinal Board, and Mr. Van Dyke to share that presentation.

In June 2015, Mr. Funk and Mr. Edwards also met with representatives of Williams Mullen, Grayson’s legal advisor, and Elliott Davis Decosimo, PLLC, Grayson’s independent registered public accounting firm, to discuss a potential combination with Cardinal.

On July 7, 2015, a special meeting of the Grayson Board was held to review preliminary information about a proposed merger of equals between Cardinal and Grayson, and on July 10, 2015 the Cardinal Board held a meeting to discuss the proposed merger. Following these meetings, Grayson and Cardinal entered into a mutual confidentiality agreement and formal due diligence between the parties began, including a simultaneous credit review.

On July 30, 2015, a special meeting of the Grayson Board was held with representatives of its financial advisor, Raymond James, to review preliminary financial models and economic contribution analyses.

On July 31, 2015, a special meeting of the Cardinal Board was held to review preliminary financial models and economic contribution analyses related to the prospective business combination.

On August 18, 2015, a meeting was held between Cardinal’s management, Grayson’s management, and Mr. Van Dyke to outline business models and discuss potential synergies.

On September 3, 2015, a joint meeting of the Grayson Board and the Cardinal Board was held at Selu Conference Center at Radford University to discuss the merits of a combination and the process and timetable for a possible combination. During September, various discussions regarding the terms of a non-binding letter of intent were held between Mr. Funk, Mr. Houston and Mr. Van Dyke.

On October 6, 2015, the parties executed a non-binding letter of intent providing for the merger of Grayson and Cardinal with and into Parkway with an exchange ratio of 1.76 shares of Parkway common stock for each share of Grayson common stock and 1.30 shares of Parkway common stock for each share of Cardinal common stock and other terms set forth in the letter of intent.

On October 13, 2015, representatives of Raymond James reviewed its financial analysis of the proposed merger with members of the Grayson Board. Representatives of Williams Mullen also reviewed the structure and terms of the merger during that same meeting.

On October 26 and 27, 2015, Grayson and Cardinal, with the assistance of their respective financial and legal advisors and representatives, gathered and reviewed business, financial and other information regarding the other company and attended meetings at Grayson’s offices in Independence, Virginia and Cardinal’s offices in Floyd, Virginia. During these meetings, members of management of each of the companies, with the assistance of their advisors and representatives, engaged in a series of discussions about each company’s respective businesses.

On October 29, 2015, the Cardinal Board held a special meeting to meet with its legal advisors, Gentry Locke, to discuss the structure of the potential business combination. Gentry Locke discussed the drafts of the merger documents, including a draft merger agreement, at length with the Cardinal Board.

On November 6, 2015, the Cardinal Board held a special meeting to consider the proposed merger and the merger agreement. At the meeting, the Cardinal Board received an update from Cardinal’s management on the status of the negotiations with Grayson. Also at the meeting, representatives of Banks Street Partners reviewed its financial analysis of the terms of the merger, including the Cardinal Exchange Ratio, and delivered to the Cardinal Board an oral opinion (which was subsequently confirmed in writing) to the effect that, as of November 6, 2015, and based on and subject to various assumptions and limitations described in the opinion, the exchange ratio in the merger was fair, from a financial point of view, to Cardinal shareholders. Representatives of Gentry Locke reviewed with the Cardinal Board the legal standards applicable to its decisions and actions with respect to the proposed transaction and reviewed in detail the definitive merger agreement and all related documents, copies of which were delivered to each director before the date of the meeting. Following these discussions, the Cardinal Board unanimously voted to approve the merger, the merger agreement and the related plan of merger.

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Also on November 6, 2015, the Grayson Board held a special meeting to consider the proposed merger and the merger agreement. At the meeting, the Grayson Board received an update from Grayson’s management on the status of the negotiations with Cardinal. Also at the meeting, representatives of Raymond James reviewed its financial analysis of the terms of the merger, including the Grayson Exchange Ratio in the merger agreement, and delivered to the Grayson Board its written opinion to the effect that, as of November 6, 2015, and based on and subject to various assumptions and limitations described in the opinion, the Grayson Exchange Ratio in the merger was fair, from a financial point of view, to Grayson shareholders. Representatives of Williams Mullen discussed with the Grayson Board the legal standards applicable to its decisions and actions with respect to the proposed transaction and reviewed in detail the proposed merger agreement and related agreements, copies of which were delivered to each director before the date of the meeting. Following these discussions, the Grayson Board unanimously voted to approve the merger, the merger agreement and the related plan of merger.

Grayson and Cardinal executed the merger agreement after the financial markets closed on November 6, 2015, and, on the afternoon of Sunday, November  8, 2015, issued a joint press release announcing the execution of the merger agreement and the terms of the merger.

Grayson’s Reasons for the Merger; Recommendation of the Grayson Board

In reaching its determination to approve and adopt the merger agreement, and to recommend the merger agreement to Grayson shareholders, the Grayson Board consulted with Grayson’s management and its financial and legal advisors, and considered a number of factors, including the following:

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The Grayson Board also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the proposed transaction, including, without limitation, the following:

In the judgment of the Grayson Board, the potential benefits of the merger outweigh these considerations.

The preceding discussion of the information and factors considered by the Grayson Board is not intended to be exhaustive, but, rather, includes all of the material factors considered by it in connection with its evaluation of the merger. In reaching its determination to approve and adopt the merger agreement and recommend that Grayson shareholders approve the merger agreement, the Grayson Board did not quantify, rank or otherwise assign any relative or specific weights to the factors considered in reaching that determination. In addition, the Grayson Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. Moreover, in considering the information and factors described above, individual directors may have given differing weights to different factors. The Grayson Board based its determination on the totality of the information presented.

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The Grayson Board unanimously determined that the merger agreement is in the best interests of Grayson and its shareholders. Accordingly, the Grayson Board unanimously approved and adopted the merger agreement and unanimously recommends that shareholders vote “FOR” the merger proposal.

Grayson’s Directors and Officers Have Financial Interests in the Merger

In considering the recommendation of the Grayson Board that you approve the merger, you should be aware that Grayson’s directors and executive officers have arrangements that are different from, or are in addition to, those of Grayson shareholders generally. The Grayson Board was aware of these interests and considered them, among other matters, in reaching its decision to approve the merger agreement and to recommend that you vote in favor of approving the merger agreement.

Appointment of Individuals to the Boards of Directors of Parkway and the Surviving Bank

Currently, all eight members of the Grayson Board are members of the Parkway Board. These directors will continue as Parkway directors following the completion of the merger. The eight individuals who are currently members of both the Grayson Board and the Parkway Board and who will continue as directors of Parkway following completion of the merger are: Thomas M. Jackson, Jr., Jack E. Guynn, Jr., Jacky K. Anderson, Bryan L. Edwards, J. David Vaughan, Theresa S. Lazo, Carl J. Richardson, and J. Allan Funk. For more information, including biographical information for the directors and executive officers of Parkway, see the section entitled “Management of Parkway Following the Merger,” beginning on page [•].

Employment with Parkway Following the Merger

The following Grayson executives are expected to continue their employment as executives of Parkway following the completion of the merger in the capacities identified below: Thomas M. Jackson, Jr. (Chairman of the Board of Parkway), J. Allan Funk (President and Chief Executive Officer of Parkway), Blake M. Edwards, Jr. (Executive Vice President and Chief Financial Officer of Parkway), Becky Melton (Chief Risk Officer of Parkway), Rodney Halsey (Chief Operations Officer of Parkway) and Linda B. Eller (Secretary of Parkway). These individuals may enter into employment agreements with Parkway following completion of the merger. For more information, including biographical information for the directors and executive officers of Parkway, see the section entitled, “Management of Parkway Following the Merger,” beginning on page [•].

Merger Consideration to Be Received by Grayson Directors and Executive Officers in Exchange for Their Shares of Grayson Common Stock

As noted in the section entitled, “Security Ownership of Certain Beneficial Owners and Management of Grayson,” beginning on page [•], the directors and officers of Grayson beneficially own shares of Grayson common stock. As a result, like all other Grayson shareholders, these directors and officers will be entitled to receive merger consideration upon the consummation of the merger. As a result of the merger, each share of Grayson common stock will be converted into the right to receive 1.76 shares of Parkway common stock.

Opinion of Grayson’s Financial Advisor

Grayson retained Raymond James as financial advisor on October 13, 2015. Pursuant to that engagement, the Grayson Board requested that Raymond James opine as to the fairness of the Grayson Exchange Ratio, from a financial point of view, to holders of Grayson’s common stock.

At the November 6, 2015 meeting of the Grayson Board, representatives of Raymond James rendered its opinion as to the fairness of the Grayson Exchange Ratio, from a financial point of view, to the holders of Grayson’s common stock, based upon and subject to the qualifications, assumptions and other matters considered in connection with the preparation of its opinion.

The full text of the written opinion of Raymond James is attached as Appendix B to this joint proxy statement/prospectus. The summary of the opinion of Raymond James set forth in this document is qualified in its entirety by reference to the full text of such written opinion. Holders of Grayson’s common stock are urged to read the opinion in its entirety.

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Raymond James provided its opinion for the information of the Grayson Board (solely in each director’s capacity as such) in connection with, and for purposes of, its consideration of the merger and its opinion only addresses whether the Grayson Exchange Ratio in the merger was fair, from a financial point of view, to the holders of Grayson’s common stock. The opinion of Raymond James does not address any other term or aspect of the merger agreement or the merger contemplated thereby. The Raymond James opinion does not constitute a recommendation to the Grayson Board or to any holder of Grayson’s common stock as to how the Grayson Board, such stockholder or any other person should vote or otherwise act with respect to the merger or any other matter. Raymond James does not express any opinion as to the likely trading range of Parkway common stock following the merger, which may vary depending on numerous factors that generally impact the price of securities or on the financial condition of Parkway at that time.

In connection with its review of the proposed merger and the preparation of its opinion, Raymond James, among other things:

With Grayson’s consent, Raymond James assumed and relied upon the accuracy and completeness of all information supplied by or on behalf of Grayson or otherwise reviewed by or discussed with Raymond James, and Raymond James has undertaken no duty or responsibility to, nor did it, independently verify any of such information. Raymond James has not made or obtained an independent appraisal of the assets or liabilities (contingent or otherwise) of Grayson or Cardinal. Raymond James is not an expert in the evaluation of loan and lease portfolios for purposes of assessing the adequacy of the allowances for losses with respect thereto and, accordingly, Raymond James has assumed that such allowances for losses are in the aggregate adequate to cover such losses. With respect to the Projections and any other information and data provided to or otherwise reviewed by

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or discussed with Raymond James, Raymond James has, with Grayson’s consent, assumed that the Projections and such other information and data have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of Grayson’s management, and Raymond James has relied upon Grayson to advise it promptly if any information previously provided became inaccurate or was required to be updated during the period of Raymond James’ review. Raymond James expresses no opinion with respect to the Projections or the assumptions on which they are based. Raymond James has assumed that the final form of the merger agreement was substantially similar to the draft reviewed by it, and that the merger will be consummated in accordance with the terms of the merger agreement without waiver or amendment of any conditions thereto, including that the exchange ratio for each share of Cardinal common stock remains 1.30 shares of Parkway common stock. Furthermore, Raymond James has assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement are true and correct and that each such party will perform all of the covenants and agreements required to be performed by it under the merger agreement without being waived. Raymond James has relied upon and assumed, without independent verification, that (i) the merger will be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the merger will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the merger or Grayson that would be material to Raymond James’ analyses or the opinion.

Raymond James relied upon, without independent verification, the assessment by Grayson’s management and Cardinal’s management and Grayson’s legal, tax, accounting and regulatory advisors with respect to all legal, tax, accounting and regulatory matters, including without limitation that the merger will qualify as a “reorganization” within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended.

Raymond James’ opinion is based upon market, economic, financial and other circumstances and conditions existing and disclosed to it as of November 5, 2015, and any material change in such circumstances and conditions would require a reevaluation of the opinion, which Raymond James is under no obligation to undertake. Raymond James relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Grayson since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Raymond James that would be material to Raymond James’ analyses or the opinion, and that there is no information or any facts that would make any of the information reviewed by Raymond James incomplete or misleading in any material respect.

Raymond James expresses no opinion as to the underlying business decision to effect the merger, the structure or tax consequences of the merger or the availability or advisability of any alternatives to the merger. Raymond James did not solicit indications of interest with respect to a transaction involving Grayson nor did Raymond James advise Grayson with respect to its strategic alternatives. This letter does not express any opinion as to the likely trading range of Parkway stock following the merger, which may vary depending on numerous factors that generally impact the price of securities or on the financial condition of Parkway at that time. Raymond James’ opinion is limited to the fairness, from a financial point of view of the Grayson Exchange Ratio, to the holders of Grayson’s common stock.

Raymond James expresses no opinion with respect to any other reasons, legal, business, or otherwise, that may support the decision of the Grayson Board to approve or consummate the merger. Furthermore, no opinion, counsel or interpretation is intended by Raymond James on matters that require legal, accounting or tax advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Raymond James relied, with the consent of the Grayson Board, on the fact that Grayson has been assisted by legal, accounting and tax advisors and Raymond James has, with the consent of the Grayson Board, relied upon and assumed the accuracy and completeness of the assessments by Grayson and its advisors as to all legal, accounting and tax matters with respect to Grayson and the merger.

In formulating the opinion, Raymond James considered only the Grayson Exchange Ratio as is previously described and Raymond James did not consider and it expresses no opinion on the fairness of the amount or nature of any compensation to be paid or payable to any of the Grayson’s or Grayson National Bank’s officers, directors or

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employees, or class of such persons. Raymond James has not been requested to opine as to, and the opinion does not express an opinion as to or otherwise address, among other things: (1) the fairness of the merger to the holders of any class of securities, creditors, or other constituencies of Grayson, or to any other party, except and only to the extent expressly set forth in the last sentence of the opinion or (2) the fairness of the merger to any one class or group of Grayson’s or any other party’s security holders or other constituencies vis-à-vis any other class or group of Grayson’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration to be received in the merger amongst or within such classes or groups of security holders or other constituents). Raymond James is not expressing any opinion as to the impact of the merger on the solvency or viability of Grayson, Cardinal or Parkway or the ability of Grayson, Cardinal or Parkway to pay its respective obligations when they come due.

Material Financial Analyses

The following summarizes the material financial analyses reviewed by Raymond James with the Grayson Board at its meeting on November 6, 2015, which material was considered by Raymond James in rendering its opinion. No company or transaction used in the analyses described below is identical or directly comparable to Grayson, Cardinal or the contemplated merger.

Contribution Analysis

Raymond James analyzed the relative contribution of Grayson and Cardinal to the combined company’s results using financial data as of and for the twelve months ending September 30, 2015 and by using data for the fiscal years ending December 31, 2015 and December 31, 2016, respectively, based on the Projections. Such information included, for each of Grayson and Cardinal, a) market capitalization, b) total assets, c) gross loans held for investment, d) deposits, e) tangible common equity, f) last twelve months net interest income plus noninterest income, g) last twelve months core net income (Cardinal’s negative LTM core net income contribution and the implied exchange ratio are considered not meaningful), h) fiscal year ending 2015 estimated net income, and i) fiscal year ending 2016 estimated net income. The relative contribution analysis did not give effect to the impact of any synergies as a result of the proposed merger. The implied exchange ratio values assume a fixed 1.30x exchange ratio for Cardinal. The results of this analysis are summarized below:

Discounted Cash Flow Analyses

Raymond James performed two discounted cash flow analyses of Grayson and Cardinal by calculating the estimated present value of the estimated free cash flows that Grayson and Cardinal were forecasted to generate through December 31, 2020 based upon the Projections. Raymond James applied a range of terminal value multiples of 12.0x to 16.0x estimated 2020 earnings for each of Grayson and Cardinal. Raymond James also applied a range of terminal value multiples of 110% to 150% of estimated 2020 tangible book value for each of Grayson and Cardinal. The present values of such estimated free cash flows and terminal values were then calculated using discount rates ranging from 16.1% to 18.1%. In performing these analyses, Raymond James used the Projections.

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Raymond James assumed Cardinal had 1,996,453 shares of Parkway common stock to reflect a fixed exchange ratio of 1.30x. Raymond James reviewed the ranges of implied per share prices indicated by the discounted cash flow analyses for each of Grayson and Cardinal and calculated a range of implied exchange ratios by dividing the maximum implied per share price of Grayson common stock by the minimum implied per share price of Cardinal common stock to calculate the maximum implied exchange ratio, and by dividing the minimum implied per share price of Grayson by the maximum implied per share price of Cardinal to calculate the minimum implied exchange ratio. The results of the discounted cash flow analyses are summarized in the table below:

Selected Companies Analysis

Raymond James analyzed the relative valuation multiples of ten publicly-traded banks and thrifts that it deemed relevant. Raymond James selected certain companies a) based in North Carolina or Virginia, b) with total assets between $200 million and $500 million, c) with nonperforming assets and loans 90 days or more past due divided by total assets less than 5.00%, and d) core return on average assets less than 0.75%. Raymond James excluded targets of announced mergers, grey market-traded companies, and mutual holding companies. Raymond James reviewed, among other financial metrics, the price to tangible book values associated with the selected companies. The selected companies and resulting data are below:

Taking into account the above results of the selected companies analysis, Raymond James applied the 25 ^th and 75 ^th price to tangible book value percentiles to both Grayson’s and Cardinal’s tangible book values per share to derive implied per share equity values. Raymond James assumed Cardinal will receive 1.30 shares of Parkway common stock for each of Cardinal’s outstanding shares, per the merger agreement. Raymond James used the implied equity values per share to establish a range of implied exchange ratios for Grayson.

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Additional Considerations

The preparation of a fairness opinion is a complex process and is not susceptible to a partial analysis or summary description. Raymond James believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering the analyses taken as a whole, would create an incomplete view of the process underlying its opinion. In addition, Raymond James considered the results of all such analyses and did not assign relative weights to any of the analyses, but rather made qualitative judgments as to significance and relevance of each analysis and factor, so the ranges of exchange ratios resulting from any particular analysis described above should not be taken to be the view of Raymond James as to the actual range of exchange ratios for Grayson.

In performing its analyses, Raymond James made numerous assumptions with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond the control of Grayson. The analyses performed by Raymond James are not necessarily indicative of actual values, trading values or actual future results which might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. Such analyses were provided to the Grayson Board (solely in each director’s capacity as such) and were prepared solely as part of the analysis of Raymond James of the fairness of the Grayson Exchange Ratio, from a financial point of view, to the holders of Grayson’s common stock. The analyses do not purport to be appraisals or to reflect the prices at which companies may actually be sold, and such estimates are inherently subject to uncertainty. The opinion of Raymond James was one of many factors taken into account by the Grayson Board in making its determination to approve the merger. Neither Raymond James’ opinion nor the analyses described above should be viewed as determinative of the Grayson Board’s or Grayson’s management’s views with respect to Grayson, Cardinal or the merger. Raymond James provided advice to Grayson with respect to the proposed merger. Raymond James did not, however, recommend any specific amount of consideration to the Grayson Board or that any specific exchange ratio constituted the only appropriate consideration for the merger. Grayson placed no limits on the scope of the analysis performed, or opinion expressed, by Raymond James.

The Raymond James opinion was necessarily based upon market, economic, financial and other circumstances and conditions existing and disclosed to it on November 5, 2015, and any material change in such circumstances and conditions may affect the opinion of Raymond James, but Raymond James does not have any obligation to update, revise or reaffirm that opinion. Raymond James relied upon and assumed, without independent verification, that there had been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Grayson since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Raymond James that would be material to its analyses or its opinion, and that there was no information or any facts that would make any of the information reviewed by Raymond James incomplete or misleading in any material respect.

During the two years preceding the date of Raymond James’ written opinion, Raymond James has not been engaged by, performed services for or received any compensation from Grayson (other than any amounts that were paid to Raymond James under the engagement letter described in this joint proxy statement/prospectus pursuant to which Raymond James was retained as a financial advisor to Grayson to assist in reviewing strategic alternatives).

For services rendered in connection with the delivery of its opinion, Grayson paid Raymond James a customary investment banking fee upon delivery of its opinion. Grayson will also pay Raymond James a customary fee for advisory services in connection with the merger, a substantial portion of which is contingent upon the closing of the merger. Grayson has also paid Raymond James a retainer and has agreed to reimburse Raymond James for its expenses incurred in connection with its services, including the fees and expenses of its counsel, and will indemnify Raymond James against certain liabilities arising out of its engagement.

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Raymond James is actively involved in the investment banking business and regularly undertakes the valuation of investment securities in connection with public offerings, private placements, business combinations and similar transactions. In the ordinary course of business, Raymond James may trade in the securities of Grayson and Cardinal for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. Raymond James may provide investment banking, financial advisory and other financial services to Grayson, Parkway, and/or Cardinal or other participants in the merger in the future, for which Raymond James may receive compensation.

Certain Grayson Unaudited Prospective Financial Information

Grayson does not as a matter of course make public projections as to future performance, revenues, earnings or other financial results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, Grayson is including in this joint proxy statement/prospectus certain unaudited prospective financial information that was made available to Raymond James, Grayson’s financial advisor in connection with the merger. The inclusion of this information should not be regarded as an indication that any of Grayson, Raymond James, their respective representatives or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results, or that it should be construed as financial guidance, and it should not be relied on as such.

Grayson’s management approved the use of the following unaudited prospective financial information. This information was prepared solely for internal use and is subjective in many respects. While presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to Grayson’s business, all of which are difficult to predict and many of which are beyond Grayson’s control. The unaudited prospective financial information reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Grayson can give no assurance that the unaudited prospective financial information and the underlying estimates and assumptions will be realized. In addition, since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the unaudited prospective financial information to be inaccurate include, but are not limited to, risks and uncertainties relating to Grayson’s business, industry performance, general business and economic conditions, competition and adverse changes in applicable laws, regulations or rules, and the certain other market and operations risks similar to those set forth in the section entitled, “Risk Factors,” beginning on page [•].

The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In addition, the unaudited prospective financial information requires significant estimates and assumptions that make it inherently less comparable to the similarly titled GAAP measures in Grayson’s historical GAAP financial statements. Neither Grayson’s independent public accountants, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability.

Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared. Grayson can give no assurance that, had the unaudited prospective financial information been prepared either as of the date of the merger agreement or as of the date of this joint proxy statement/prospectus, similar estimates and assumptions would be used. Grayson does not intend to, and disclaims any obligation to, make publicly available any update or other revision to the unaudited prospective financial information to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes

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in general economic or industry conditions. The unaudited prospective financial information does not take into account the possible financial and other effects on either Grayson or Cardinal, as applicable, of the merger and does not attempt to predict or suggest future results of Parkway. The unaudited prospective financial information does not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with completing the merger, the potential synergies that may be achieved by Parkway as a result of the merger, the effect on either Grayson or Cardinal, as applicable, of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the unaudited prospective financial information does not take into account the effect on either Grayson or Cardinal, as applicable, of any possible failure of the merger to occur. None of Grayson, Cardinal, Raymond James or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any Grayson shareholder or other person regarding Grayson’s ultimate performance compared to the information contained in the unaudited prospective financial information or that the projected results will be achieved. The inclusion of the unaudited prospective financial information in this joint proxy statement/prospectus should not be deemed an admission or representation by Grayson or Cardinal that it is viewed as material information of Grayson, particularly in light of the inherent risks and uncertainties associated with such forecasts. The summary of the unaudited prospective financial information included below is not being included to influence your decision whether to vote for the merger proposal, but is being provided solely because it was made available to Grayson’s financial advisor in connection with the merger.

In light of the foregoing, and considering that the Grayson special meeting will be held many months after the unaudited prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, Grayson shareholders are cautioned not to place unwarranted reliance on such information, and Grayson urges all Grayson shareholders to review Grayson’s financial statements and other information contained elsewhere in this joint proxy statement/prospectus for a description of Grayson’s business and financial results.

The following table presents a summary of selected Grayson unaudited prospective financial data for the years 2015 through 2020 (dollars in millions, except per share data):