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United Bankshares to buy Virginia Commerce for $490.6M

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In its latest effort to beef up its Washington area presence, United Bankshares has agreed to buy Arlington-based Virginia Commerce Bancorp in a deal valued at $490.6 million, the companies announced last week.

The all-stock acquisition would create the eighth largest bank in the Washington area. Analysts said United Bankshares, which based in Charleston, W.V., and has 114 branches throughout the Mid-Atlantic, has been aggressive in its expansion plans.

“Strategically, it’s what United does,” said Matthew Schultheis, an analyst for Boenning & Scattergood, a Philadelphia-based investment firm. “They’ve been focused on the metropolitan D.C. market for a decade now, and they have always said that’s their main priority for acquisitions.”

United Bankshares plans to pay $14 per share of Virginia Commerce stock, a 15 percent premium on Jan. 29’s closing price of $12.21. The bank said it expects to have assets of $11.2 billion — up from its current $8.4 billion — once the deal is finalized in the third quarter of 2013.

The merger “creates the leading independent community bank operating throughout the most attractive markets in Northern Virginia and Washington,” Richard M. Adams, chairman and chief executive of United Bankshares, said in a statement.

The deal comes less than three weeks after Virginia Commerce announced that it had put itself up for sale and hired Sandler O’Neill + Partners, a New York-based firm, as its financial adviser.

The union drew concern from at least one law firm specializing in shareholder rights. The San Deigo firm Robbins Arroyo issued a statement saying buyers in other regional bank mergers in the past year paid higher premiums ranging from 22 percent to 85 percent.

In December, Virginia Commerce announced that it had paid back all $71 million in funds that it received as part of the Treasury Department’s Troubled Asset Relief Program.

The latest deal, which requires egulatory and shareholder approval, marks United Bankshares’ 29th acquisition since its founding in 1982. Analysts say they expect United Bankshares to take a breather now.

“I think it’s going to be at least a year, probably 18 months, before they’re back to doing another acquisition,” Schultheis said.

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