United Bankshares and Cardinal Financial announce merger

PARKERSBURG United Bankshares Inc. on Thursday announced a merger with a Washington, D.C., area financial corporation that would make the West Virginia-based banking company the 32nd largest in the nation.

Richard M. Adams, United chairman and chief executive officer, announced the signing of a definitive merger agreement with Cardinal Financial Corp., a publicly traded financial services holding company headquartered in Tysons Corner, Va.

The merger will mark the 31st acquisition of the current United administration and the 10th acquisition for United in the D.C. Metro region, one of the most attractive financial markets in the country.

Cardinal, with $4.2 billion in assets, provides banking services through its subsidiary bank, Cardinal Bank, which has a network of 30 branches throughout Virginia, Maryland and Washington, D.C. Cardinal also operates George Mason Mortgage, a residential mortgage lending subsidiary, and Cardinal Wealth Services Inc., a wealth management services subsidiary.

Upon completion of the merger, United’s assets will grow to about $20 billion with a projected market capitalization of about $3.9 billion based on United’s closing price on Aug. 16. Based upon this projected market capitalization, United would be the 32nd largest banking company in the country, the company said.

Cardinal Bank will merge into United Bank, United’s Virginia chartered bank, the largest community bank headquartered in the D.C. Metro region. Upon completion of the merger, United Bank will have assets of approximately $14.4 billion and will continue to have the No. 1 deposit market share among community banks in the Washington, D.C. Metropolitan Statistical Area. United will acquire 100 percent of the outstanding shares of Cardinal in exchange for common shares of United at an exchange ratio fixed at 0.71 of United’s shares for each share of Cardinal.

The aggregate consideration of the transaction is about $912 million based on Cardinal’s common shares outstanding of 32.5 million and options outstanding of 1.02 million. The announced price is 2.24 times Cardinal’s tangible book value at June 30.

“Cardinal is one of the most successful community banks in the country and has a significant presence in one of the best markets in the USA,” Adams said. “This merger aligns perfectly with our long-standing commitment to growth in the D.C. Metro area. Both companies have strong ties to the local community, and share the goal of building meaningful relationships with the individuals, businesses, and organizations that contribute to its prosperity. By uniting, we reinforce our position as the largest locally headquartered community bank.”

The transaction was unanimously approved by the United and Cardinal boards of directors and is expected to close mid-2017, pending regulatory approval and United and Cardinal shareholder approval.

“We are pleased Cardinal found a like-minded partner to further our growth in Northern Virginia, the District of Columbia and Maryland,” Bernard H. Clineburg, executive chairman of Cardinal, said. “United brings to the table the capacity to meet the sophisticated needs of our customers, while at the same time staying true to our commitment to the communities we serve. In addition, the transaction will add tremendous value for our shareholders.”

Clineburg is expected to join United’s board of directors at the time of the merger.

United has $14.3 billion in assets and 129 full-service offices in Washington, D.C., Virginia, Maryland, Ohio, Pennsylvania, and West Virginia. Keefe, Bruyette & Woods Inc. was financial adviser and Bowles Rice LLP provided legal counsel to United.

Sandler O’Neill & Partners was financial adviser and LeClairRyan was legal counsel to Cardinal.


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