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.

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“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.

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