Union in Va. to pass $10B of assets with Xenith deal
Union Bankshares in Richmond, Va., has agreed to buy Xenith Bankshares in Richmond.
The $8.7 billion-asset Union said in a press release Monday that it would pay $701.2 million in stock for the $3.2 billion-asset Xenith. The transaction, which is expected to close in early January, is the seventh-largest bank M&A deal announced this year.
The acquisition would push Union above the $10 billion-asset threshold, where it would face mandatory stress testing and caps on interchange fees, among other things.
“We expect that our combined statewide footprint will bring additional convenience to our customers and position us as a strong competitor against large regional institutions and smaller community banks alike,” John Asbury, Union’s president and CEO, said in the release. “The combination … delivers on our stated priorities for this year as well as our acquisition goals enabling Union to efficiently cross the $10 billion-asset threshold.”
Union said the acquisition will help it absorb a $11 million annual hit from surpassing $10 billion in assets, beginning in the third quarter of 2019.
Union said it expects to incur $33 million in merger-related expenses. It plans to cut $28 million in annual costs, or 40% of Xenith's noninterest expenses.
T. Gaylon Layfield III, Xenith’s CEO, is to serve for a transitional period as executive vice chairman of Union’s bank. Two Xenith directors would join Union’s board.
Keefe, Bruyette & Woods and Troutman Sanders advised Union. Sandler O’Neill and Hunton & Williams advised Xenith.