United Bankshares (UBSI) has made a deal that will dramatically increase its market share around the nation's capital.
The Charleston, W.Va., company announced Wednesday that it will buy the $2.8 billion-asset Virginia Commerce Bancorp (VCBI) in Arlington, which had announced plans to explore a sale earlier this month. Virginia Commerce has 28 branches, a mortgage origination office and a wealth management office, all in northern Virginia.
United will pay about $490.6 million in stock for all of Virginia Commerce's outstanding shares. The price is based on United's 10-day average closing price of $25.73. United closed at $25.83 a share on Tuesday.
The deal values Virginia Commerce at $14 per share, or a 14.6% premium over its closing price Tuesday. The price is 1.82 times Virginia Commerce's tangible book value as of Dec. 31.
The companies expect it to close the deal in the third quarter.
The acquisition will push United to roughly $11.2 billion in assets, and will make it the eighth-biggest bank around Washington, based on deposit market share, the company said in its press news release said. United has 115 branches, including including 49 in Virginia and the nation's capital.
Virginia Commerce said this month that its board was exploring various ways, including a sale, to increase shareholder value, though it did not set a timetable. In December, the company repaid $71.3 million owed to the Treasury Department as part of the Troubled Asset Relief Program. Its fourth-quarter earnings fell 22% from a year earlier because of higher foreclosure costs and taxes.
On Tuesday, United said its fourth-quarter earnings rose 5% from a year earlier, to $21.2 million, or 42 cents a share.
"We are very excited about our merger with VCBI, which creates the leading independent community bank operating throughout the most attractive markets in Northern Virginia and Washington, D.C. VCBI is a well-run banking franchise and will be a great partner for United," Richard Adams, United's chairman and chief executive, said in the release.
Keefe, Bruyette & Woods was United Bankshares' financial advisor; Bowles Rice was the legal counsel.