John Asbury is nothing if not ambitious.
Since becoming CEO of Union Bankshares in early 2017, Asbury has looked to expand through large acquisitions. The $13 billion-asset Union bought
The goal for Asbury is to create a regional power that stretches from Richmond, Va., to Baltimore. At the same time, he is considering a plan to modify Union’s brand to forestall any confusion as part of the company's introduction to the lucrative Northern Virginia market.
For these reasons, American Banker has tapped Asbury as one of its community bankers to watch in 2019.
Asbury said the $700 million Xenith acquisition was a game changer for Union, noting that the deal's relatively seamless integration paved the way for the company to pursue Access.
"Most of us would agree the Xenith-Union conversion was the most successful one any of us have seen in our careers," Asbury said in a recent interview. "It wasn't perfect, but it was very good. It was a proof point that we have the core competency ... to successfully integrate and convert a whole bank.”
Access could prove to be equally significant. It provides Union with critical scale in a deposit-rich market that includes several of the wealthiest jurisdictions in the country. It would also add 14 branches in an area where Union only has one location.
"I’ve often referred to Northern Virginia as the last piece of the Virginia jigsaw puzzle for Union," Asbury said.
"You think of yourself as a community bank, but in reality you have a platform [where] you can recreate the great Virginia regional banks, like Crestar," Asbury added. "That was my point to the board."
Crestar was a Virginia regional bank that sold itself to SunTrust in 1998.
Asbury joined Union after a 29-year career that included stints as a senior executive at Bank of America and Regions Financial. While at those banks, Asbury noticed that the stiffest competition for small and midsize businesses came from big community banks and small regionals.
That’s the role he sees for Union with its freshly minted statewide franchise.
“We are the alternative to the big guys," he said.
Asbury's thinking has merit, said Joe Gladue, an analyst at Merion Capital Group.
“The fact that somebody is in-state ... may play a role when [customers] get frustrated with a bigger bank,” Gladue said. “It carries currency with borrowers that might feel they have more access to management and that management understands their markets better.”
Statewide, Union will have $16.5 billion in assets and $12.1 billion in deposits when it buys Access in a deal set to close this quarter. Banks around Washington hold $256 billion, giving Asbury and his team room to grow.
Union plans to eventually rev up retail banking at Access, though it will take time, Asbury said.
“We’re not going to be all things to all people in Northern Virginia proper,” he said. “We love the Access strategy. We’re going to play to their current strength … which is business. You’ll see us begin to make moves over time as we increase our focus on the mass-affluent.”
Union and Access have several complementary businesses.
For instance, Access is well known for lending to government contractors, and Union inherited a government-contracting team in Herndon, Va., when it bought Xenith.
“It was very clear that Access was really the only bank that would be of interest to us,” Asbury said. “We were very close to that management team. Their strategy is very consistent. It’s a strategy we have underway at the new Union. It’s just a great fit.”
Asbury and Michael Clarke, Access' president and CEO, first discussed a potential merger in 2017, a regulatory filing tied to the deal suggests. Talks grew more serious in May, and the deal took shape over the next five months.
Though bank stocks have been hit hard in recent months, it appears as though the merger remains on track, Gladue said.
“I think management and the board at Access were looking at the strategic fit and the attractiveness of the combination," Gladue said. "I think those considerations still apply."
The move into Northern Virginia comes at an opportune time for Union.
About a month after Union agreed to buy Access, Amazon announced plans to move part of its headquarters operation to Arlington's Crystal City district, while Virginia Tech has agreed to develop a nearby innovation campus.
Amazon expects its $2.5 billion investment to generate 25,000 new jobs.
“We certainly were not betting on Amazon, but it certainly reinforced the strategic logic,” Asbury said. “It’s phenomenal that this has happened.”
For Union, moving into Northern Virginia creates some headaches, most notably around its brand. The effort will create more competition between Union and United Bankshares in Parkersburg, W.Va., which has been in Northern Virginia for decades.
The similarity between the two banks' names is a potential problem.
“We're aware that there's confusion in the market,” Asbury said. “The first three letters of both names begin with 'Uni,' we both use all capital letters and the corporate colors of both companies are green. ... I have passed United branches and done a double-take.”
Union operates its seven North Carolina branches under the Xenith brand to avoid a similar conflict with a community bank. Management is considering changes to its corporate identity to create a unified brand.
“We’re giving a lot of thought to ways to somewhat differentiate,” Asbury said, though any change would be subtle.
“Don’t look for it to be dramatic,” he added. “We recognize the equity we have in Union. We don’t want to lose that.”
Union expects to have its hands full for some time integrating Access, but that doesn't bar it from thinking about future moves, including more acquisitions. With Virginia covered, Asbury is looking at Maryland, with an eye toward completing what he calls a “golden crescent” strategy.
The term, popular in the 1990s, refers to an area that begins in Baltimore then moves through Washington and Richmond to Virginia's Hampton Roads area.
“That’s where most of the population and most of the economy of the mid-Atlantic area is," Asbury said. "Union has the potential, and I think it’s the only company that does, to recreate that strategy. … In three to five years, what do we envision? We envision a mid-Atlantic regional bank.”
