United Bankshares in Charleston, W.Va., has agreed to buy Community Bankers Trust in Richmond, Va.
The $27 billion-asset United said in a press release Thursday that it will pay $303.3 million in stock for the $1.7 billion-asset parent of Essex Bank. The deal, which is expected to close in the fourth quarter, priced Community Bankers Trust at 167% of its tangible book value.
Community Bankers Trust has 18 branches in Virginia and six locations in Maryland. It has $1.2 billion of loans and $1.4 billion of deposits.
“This transaction enhances our existing presence in the [Washington area] and takes us into new markets including Baltimore, Annapolis, Lynchburg, Richmond and the Northern Neck of Virginia,” Richard Adams, United’s chairman and CEO, said in the release. “It also strategically connects our Mid-Atlantic and Southeast footprints.”
Rex Smith III, Community Bankers Trust’s president and CEO, will join United as a regional president responsible for the existing Essex Bank locations in Virginia.
The deal is expected to be accretive to United 2022 earnings per share by 6 cents. It should be immediately accretive to United’s tangible book value.
United plans to cut about 30% of Community Bankers Trust’s annual noninterest expenses. It expects to incur $20 million of merger-related expenses.
“It is not a huge transaction for United – 6% of pro forma assets – so it leaves the door open for additional M&A,” Casey Orr Whitman, an analyst at Piper Sandler, wrote in a note to clients.
Performance Trust Capital Partners and Bowles Rice advised United. Piper Sandler and Williams Mullen advised Community Bankers Trust.