Constrained by the limited growth opportunities in its home state, United Bankshares in Parkersburg, W.Va., struck another deal Thursday in the faster-growing Washington market.
The $4.9 billion-asset company said it plans to buy Washingtons Century Bancshares for $62.5 million of stock and cash. Richard Adams, Uniteds chairman, said that $415 million-asset Century, which has offices in northern Virginia and suburban Maryland, was attractive because of its strong branch network and good location.
This acquisition will continue to strengthen our position in one of the best markets in the nation and further enhance our franchise value, Mr. Adams said.
The 11 branches of Century National Bank, the companys primary subsidiary, would take on the name and charter of Uniteds Virginia subsidiary, United Bank. The post-merger bank would have about $2 billion of assets and be the ninth-largest in both Virginia and metropolitan Washington. It would hold about 40% of the parent companys assets.
Joseph Bracewell, the chairman, president, and chief executive officer of Century, said his company had not been looking to be bought but that United had approached it with a tempting offer that he thought reflected the true value of the bank.
Mr. Bracewell, who would join Uniteds board of directors, added that Century had also considered an offer from another company.
In the transaction Century shareholders are to get 0.45 share of United stock, plus $3.43 in cash, for each of their shares. The deal price is equal to 2.5 times Centurys book value and 20 times its estimated 2001 earnings.
Centurys stock price skyrocketed on news of the deal. It was up more than 66%, to $13.35, in very heavy trading at midday Thursday, shattering its 52-week high of $8.50. Uniteds stock was down slightly, to $24.21.
Steve E. Wilson, Uniteds chief financial officer, said that it is interested in further growth through acquisitions in the Washington area, which has one of the highest per-capita income rates and very low unemployment.