United Bankshares announces merger

PARKERSBURG – United Bankshares on Wednesday announced it will acquire Virginia Commerce Bancorp Inc. in a deal valued $490.6 million.

The acquisition of Virginia Commerce will allow United to significantly enhance its existing presence in the Washington, D.C., Metropolitan Statistical Area, according to Richard Adams, chairman and chief executive officer of United Bankshares.

Adams announced on Wednesday morning the signing of a definitive merger agreement with Virginia Commerce. Since 1982, United has completed and effectively integrated 28 acquisitions, he said.

“We are very excited about our merger with VCBI, which creates the leading independent community bank operating throughout the most attractive markets in northern Virginia and Washington, D.C. VCBI is a well-run banking franchise and will be a great partner for United,” Adams said

Virginia Commerce is headquartered in Arlington, Va., and has $2.8 billion in assets and 28 banking offices, a residential mortgage origination office and a wealth management office. Virginia Commerce locations are in the Northern Virginia suburbs of Washington.

With the acquisition of Virginia Commerce, United’s assets will grow to approximately $11.2 billion.

“We look forward to joining the United team,” said Peter A. Converse, Virginia Commerce’s president and chief executive officer. “Our merger creates superior value for our shareholders and will enable us to better serve our customers, employees and communities.”

United was excited by the acquisition and the expansion into the area, said Chad Mildren, regional president of United Bank.

“It enhances our footprint into a very attractive northern Virginia market,” he said.

United will acquire all of the outstanding shares of Virginia Commerce in exchange for common shares of United. The exchange ratio will be fixed at 0.5442 of United’s shares for each share of Virginia Commerce, which equates to a deal value of $14 per share, or about $490.6 million in the aggregate, based on United’s 10-day average closing price of $25.73 as of Jan. 29.

Mildren said VCBI was a high-performing bank and an in-market competitor.

“This is a well-run bank and we are excited to add them,” he said.

The transaction, which has been unanimously approved by both United’s and Virginia Commerce’s boards of directors, is expected to close in the third quarter of 2013, pending regulatory approvals and the approval of United’s and Virginia Commerce’s shareholders.

The aggregate consideration of the transaction is approximately $490.6 million based on Virginia Commerce’s common shares outstanding, plus outstanding options and warrants. The announced price represents a premium of 15 percent over Virginia Commerce’s closing price on Jan. 29 and 1.82 times Virginia Commerce’s tangible book value at Dec. 31.

With this acquisition, United will hold the No. 8 deposit market share position in the Washington MSA. United currently has $8.4 billion in assets and 115 full-service offices in Ohio, West Virginia, Virginia, Maryland, Pennsylvania and Washington, D.C.

The move makes United Bank the top market share in the Washington MSA among independent community banks, Mildren said.