RICHMOND – Union Bankshares Corporation will soon be able to expand into North Carolina and Maryland thanks to a merger agreement.
According to a release, Union announced Monday it has entered a merger agreement with Xenith Bankshares for an all-stock transaction.
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The combined company would have total assets of $11.9 billion, total deposits of $9.2 billion and gross loans of $8.9 billion, the release said. The acquisition would strengthen Union’s presence in Hampton Roads, Virginia Beach and also add to it Richmond and Northern Virginia footprints as well as Maryland and North Carolina, the release said.
With this, Union will have the fourth largest branch network in Virginia and will remain the only community bank with a statewide footprint across the Commonwealth, the release said.
“We are excited about the opportunity to bring our companies together to enhance our product and customer service capabilities,” said Raymond D. Smoot, Jr., chairman of Union Bankshares Corporation’s Board of Directors, in a release. “We believe that our two companies are stronger together and the combination gives Union a unique franchise to create long term shareholder value.”
Locally, Union has banks in Staunton, Waynesboro, Verona, Grottoes, Stuarts Draft, Harrisonburg and over the mountain in Charlottesville and other surrounding communities. Union is headquartered in Richmond and has 113 banking offices and approximately 184 ATMs located throughout Virginia, the release said.
Xenith is a full-service commercial bank also headquartered in Richmond, but also has operations in the from greater Baltimore, Maryland area spanning down to North Carolina. Xenith Bank has 40 full-service branches and two loan production offices located across these areas with its headquarters centrally located in Richmond, the release said.
According to the merger agreement, each outstanding share of Xenith common stock will be converted into the right to receive 0.9354 shares of Union common stock. This implies a deal value per share of $29.67 per share of Xenith common stock or approximately $701.2 million in the aggregate based on Union’s closing stock price of $31.72, the release said. Shareholders owning more than 4.9 percent of Xenith common stock will, after the closing of the merger, be subject to a restriction on the sale of their Union shares for 60 days, the release said.
“We expect that our combined statewide footprint will bring additional convenience to our customers and position us as a strong competitor against large regional institutions and smaller community banks alike – making us the preeminent community bank in Virginia,” said John C. Asbury, president and CEO of Union, in a release. “The combination with Xenith delivers on our stated priorities for this year as well as our acquisition goals enabling Union to efficiently cross the $10 billion asset threshold.
“Deepening our presence in Hampton Roads and adding to our Richmond and Northern Virginia network were priorities for Union and we’re also able to gain retail entry points in North Carolina and Maryland,” Asbury said in a release. “With a more diverse loan portfolio, lower loan to deposit ratio and efficiencies gained, I believe the combined franchise will be able to generate sustainable top-tier financial performance for our shareholders.”
The merger agreement has been approved by the board of directors of each company and the transaction is set to be completed by early January 2018, the release said.
“This transaction delivers on Xenith’s original vision to be an integral part of creating the preeminent commercial bank headquartered in the Commonwealth of Virginia,” said T. Gaylon Layfield, III, CEO for Xenith, said in a release. “With a statewide presence, strong pro forma capital ratios, enhanced retail delivery system and focused commercial banking capabilities, the combined company will be positioned to deliver value to our customers. Both banks are committed to attracting the best talent available and building a culture that encourages and enables that talent to better serve our customers and to be effective in setting the combined company apart from the competition. I look forward to working with our new teammates to deliver on this exciting vision.”
Following the closing of the merger Asbury will continue as president and CEO of the combined organization and Layfield will serve for a transitional period as executive vice chairman of Union Bank & Trust. The Union Board of Directors will expand to 20 members and will be composed of 18 members from the current Union Board and two members from the Xenith Board, the release said. Smoot will continue to serve as chairman of the board of combined company.
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