West Virginia’s United Bankshares strikes deal to enter Atlanta

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United Bankshares in Charleston, West Virginia, has agreed to purchase Piedmont Bancorp. It is going to be the corporate’s first deal since December 2021.

United Bankshares in Charleston, West Virginia, has agreed to pay $267 million in inventory for the Peachtree Corners, Georgia-based Piedmont Bancorp, in a deal United CEO Rick Adams described as a “low-risk, down-the-fairway transaction.”

Introduced Friday, the acquisition serves as an entry level into the sprawling $237 billion Metropolitan Atlanta deposit market, which Adams referred to as a “pure extension” of the $29.9 billion-asset United’s franchise. The corporate launched an growth within the Carolinas in 2017. Two years later, United struck a $1.1 billion-asset all-stock deal to amass the $4.4 billion Charleston, South Carolina-based Carolina Monetary Corp., including 73 branches in North and South Carolina. 

Now, United is poised to develop additional south to Atlanta, a market with “phenomenal demographics” that’s residence to six.3 million folks and greater than 150,000 companies, Adams mentioned in an interview. Metro Atlanta’s inhabitants is projected to develop one other 4.5% over the subsequent 5 years, in line with the Census Bureau. 

Whereas Adams didn’t present particulars concerning the negotiations main as much as Friday’s announcement, he mentioned he has recognized Piedmont CEO Monty Watson for 2 years, including the 2 have talked typically. Watson has agreed to function a regional president, one thing Adams mentioned can be essential for the merged firm going ahead.

“Monty has been there without end,” Adams mentioned. 

The merged firm can have $32 billion of belongings, $25 billion in deposits and 243 branches, together with Piedmont’s 16 Atlanta-area areas. United is projecting earnings-per-share accretion of seven.6% in 2025 and eight.3% in 2026. The $267 million deal value works out to a 3.5% dilution of tangible e book worth per share with an earn-back forecast of three.5 years. Piedmont “has some great relationships” it will possibly deepen backed by the sources of a a lot bigger regional financial institution, Adams mentioned. 

Piedmont reported internet revenue totaling $29.2 million in 2023, up 2% 12 months over 12 months. Its internet charge-offs have been minimal and nonperforming belongings have been zero at March 31, 2024.

“General, we just like the transaction,” Daniel Cardenas, who covers United for Janney Montgomery Scott, wrote Friday in a analysis be aware. “United is shopping for a well-run firm at an inexpensive value and is getting into into a great progress market with extra potential for market share grabs.”

Buyers appeared to agree, although their response was muted. United shares had superior about 1% in Friday afternoon buying and selling to $40.74 per share. 

Merging with United “will permit us to higher serve our present clients and attain new audiences with enhanced services and products, all whereas sustaining our personalised neighborhood financial institution method,” Watson mentioned Friday in a press launch.  

United views merger-and-acquisition exercise as a line of enterprise, in line with Adams. Piedmont can be its thirty fourth deal and the primary since December 2021, when it closed a $303 million deal for Neighborhood Bankers Belief Corp. in Richmond, Virginia. It is also United’s first transaction since Adams took over as CEO in April 2022. Adams succeeded his father, Richard Adams Sr., who had served as CEO since 1976.

United expects to shut its deal for Piedmont in late 2024 or early 2025.

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