United Bankshares in Charleston, West Virginia, has agreed to buy Community Bankers Trust in Richmond, Virginia, for $303 million in stock.
The $27 billion-asset United said the deal would help bridge the gap between its extensive branch network in Northern Virginia and its more than 70 branches in North and South Carolina. United expanded into the Carolinas by
Buying Community Bankers would give United a presence in Richmond and Lynchburg in central Virginia, as well as in Baltimore and Annapolis in Maryland.
“It strategically connects our Mid-Atlantic and Southeast footprints,” Richard Adams, United’s chairman and CEO, said in a press release Thursday.
United has wanted to expand south into Richmond, and Community Bankers was the last major independent community bank in Virginia’s capital, “so this is a real prize,” Adams told American Banker.
United will continue looking for deals, Adams said in the interview. “There’s no question we’re interested in doing more.”
United would acquire $1.7 billion of assets and $1.4 billion of deposits. The combined company would have $28.7 billion of assets and 250 branches spread mainly across West Virginia, Virginia, Maryland and the Carolinas.
Community Bankers Trust, the holding company for the 95-year-old Essex Bank, is United’s 33rddeal under Adams, who has led United since 1976. Between the mid-1990s and 2017, United focused most of its expansion energies on the Washington metropolitan region, where it has 63 branches and more than $9.5 billion of deposits.
United maintains a separate headquarters in Fairfax, Va., to run its Washington-area operation.
Community Bankers shareholders would receive 0.3173 United shares for each of their existing shares. That amounts to $13 a share. The $303 million total consideration works out to 1.67 times Community Bankers’s tangible book value and 13.5 times estimated 2021 earnings per share.
United expects to take a one-time $20 million charge and projects cost savings equal to 30% of Community Bankers’ noninterest expenses. It’s forecasting earnings-per-share accretion of 6 cents in 2022.
Community Bankers reported first-quarter net income of $6.6 million and $8.8 million in operating expenses.
Rex Smith, Community Bankers’ president and CEO, would join the combined company as market president responsible for Essex Bank’s 19 Virginia branches.
“The merger will give us the ability to offer better and more sophisticated products and services while still maintaining the community bank approach to doing business with local leadership,” Smith said in the release.
Adams said “it’s a plus when you can keep the best people” after doing a deal. “Rex is a well-known banker, and he’s done a great job. We’re very happy to have him.”
