United Bankshares, Inc. (UBSI - Free Report) recently entered into an all-stock acquisition deal with the parent company of Essex Bank, Community Bankers Trust Corporation. Per the deal, both companies will join forces in an all-stock merger, valued at $303.3 million.
The deal will bring together two high-performing banking companies, and bolster United’s position as one of the largest and best performing regional banking companies in the Mid-Atlantic and Southeast. Moreover, the combined entity will operate across 250 locations in opportunistic markets in the United States.With $29 billion in assets, United will rank as the 38th largest banking company in the nation based on market capitalization.
The new entity is expected to capture market opportunities and boost the West Virgunia-based bank’s client base. Moreover, the expanded scale, technological advancement and increased product offerings will help capitalize United’s market share.
However, the deal awaits certain customary approvals by shareholders of Community Bankers and other regulatory approvals. The transaction is anticipated to close in fourth-quarter 2021, subject to satisfaction of certain closing conditions.
Richard M. Adams, chairman and CEO of United, said, “This transaction enhances our existing presence in the DC Metro MSA and takes us into new markets including Baltimore, Annapolis, Lynchburg, Richmond, and the Northern Neck of Virginia. It also strategically connects our Mid-Atlantic and Southeast footprints.”
Terms of the Deal
Per terms of the deal, each common shareholder of Community Bankers will get stock equivalent to 0.3173 of United Bankshares shares, for every Community Bankers share held. Specifically, United Bankshares will acquire 100% of the outstanding shares of Community Bankers.
Smith will be retained as the regional president responsible for the current Essex Bank locations in Virginia. Community Bankers Trust will merge into United, and Essex Bank will merge into United Bank, with United and United Bank being the remaining firms.
Bottom Line
In the present scenario, banks are moving toward consolidation to dodge the heightened costs of regulatory compliances and increased investments in technology, in a bid to be competitive. Furthermore, given the current interest-rate scenario, which has been taking a toll on financial firms’ margins, such initiatives are instilling investors’ optimism in banks’ growth prospects.
Remarkably, shares of United Bankshares have rallied nearly 26.7%, over the last six months, underperforming 40.7% growth recorded by the industry.
Currently, United Bankshares carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar Moves by Other Banks
In order to boost its payment offerings for healthcare clients, Bank of America (BAC - Free Report) acquired Axia Technologies, Inc. in April, 2021.
Further, shareholders of Huntington Bancshares Incorporated (HBAN - Free Report) and TCF Financial Corporation recently approved the all-stock acquisition deal, which is likely to close in the second quarter of 2021.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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United Bankshares, Inc. (UBSI - Free Report) recently entered into an all-stock acquisition deal with the parent company of Essex Bank, Community Bankers Trust Corporation. Per the deal, both companies will join forces in an all-stock merger, valued at $303.3 million.
The deal will bring together two high-performing banking companies, and bolster United’s position as one of the largest and best performing regional banking companies in the Mid-Atlantic and Southeast. Moreover, the combined entity will operate across 250 locations in opportunistic markets in the United States.With $29 billion in assets, United will rank as the 38th largest banking company in the nation based on market capitalization.
The new entity is expected to capture market opportunities and boost the West Virgunia-based bank’s client base. Moreover, the expanded scale, technological advancement and increased product offerings will help capitalize United’s market share.
However, the deal awaits certain customary approvals by shareholders of Community Bankers and other regulatory approvals. The transaction is anticipated to close in fourth-quarter 2021, subject to satisfaction of certain closing conditions.
Richard M. Adams, chairman and CEO of United, said, “This transaction enhances our existing presence in the DC Metro MSA and takes us into new markets including Baltimore, Annapolis, Lynchburg, Richmond, and the Northern Neck of Virginia. It also strategically connects our Mid-Atlantic and Southeast footprints.”
Terms of the Deal
Per terms of the deal, each common shareholder of Community Bankers will get stock equivalent to 0.3173 of United Bankshares shares, for every Community Bankers share held. Specifically, United Bankshares will acquire 100% of the outstanding shares of Community Bankers.
Smith will be retained as the regional president responsible for the current Essex Bank locations in Virginia. Community Bankers Trust will merge into United, and Essex Bank will merge into United Bank, with United and United Bank being the remaining firms.
Bottom Line
In the present scenario, banks are moving toward consolidation to dodge the heightened costs of regulatory compliances and increased investments in technology, in a bid to be competitive. Furthermore, given the current interest-rate scenario, which has been taking a toll on financial firms’ margins, such initiatives are instilling investors’ optimism in banks’ growth prospects.
Remarkably, shares of United Bankshares have rallied nearly 26.7%, over the last six months, underperforming 40.7% growth recorded by the industry.
Currently, United Bankshares carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar Moves by Other Banks
In order to boost its payment offerings for healthcare clients, Bank of America (BAC - Free Report) acquired Axia Technologies, Inc. in April, 2021.
Further, shareholders of Huntington Bancshares Incorporated (HBAN - Free Report) and TCF Financial Corporation recently approved the all-stock acquisition deal, which is likely to close in the second quarter of 2021.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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