United Bankshares in Charleston, West Virginia, has agreed to pay $267 million in stock for the Peachtree Corners, Georgia-based Piedmont Bancorp, in a deal United CEO Rick Adams described as a "low-risk, down-the-fairway transaction."
Announced Friday, the acquisition serves as an entry point into the sprawling $237 billion Metropolitan Atlanta deposit market, which Adams called a "natural extension" of the $29.9 billion-asset United's franchise. The company launched an expansion in the Carolinas in 2017. Two years later, United
Now, United is poised to expand further south to Atlanta, a market with "phenomenal demographics" that is home to 6.3 million people and more than 150,000 businesses, Adams said in an interview. Metro Atlanta's population is projected to grow another 4.5% over the next five years, according to the Census Bureau.
While Adams did not provide details about the negotiations leading up to Friday's announcement, he said he has known Piedmont CEO Monty Watson for two years, adding the two have talked often. Watson has agreed to serve as a regional president, something Adams said would be crucial for the merged company going forward.
"Monty has been there forever," Adams said.
The merged company will have $32 billion of assets, $25 billion in deposits and 243 branches, including Piedmont's 16 Atlanta-area locations. United is projecting earnings-per-share accretion of 7.6% in 2025 and 8.3% in 2026. The $267 million deal price works out to a 3.5% dilution of tangible book value per share with an earn-back forecast of 3.5 years. Piedmont "has some wonderful relationships" it can deepen backed by the resources of a much larger regional bank, Adams said.
Piedmont reported net income totaling $29.2 million in 2023, up 2% year over year. Its net charge-offs have been minimal and nonperforming assets were zero at March 31, 2024.
"Overall, we like the transaction," Daniel Cardenas, who covers United for Janney Montgomery Scott, wrote Friday in a research note. "United is buying a well-run company at a reasonable price and is entering into a good growth market with additional potential for market share grabs."
Investors appeared to agree, though their reaction was muted. United shares had advanced about 1% in Friday afternoon trading to $40.74 per share.
Merging with United "will allow us to better serve our current customers and reach new audiences with enhanced products and services, all while maintaining our personalized community bank approach," Watson said Friday in a press release.
United views merger-and-acquisition activity as a line of business, according to Adams. Piedmont would be its 34th deal and the first since December 2021, when it closed a
United expects to close its deal for Piedmont in late 2024 or early 2025.
