Union First Market Bank, which has an operations center in Ruther Glen, is going to acquire Charlottesville-based bank StellarOne.
The acquisition will be accomplished in a stock transaction, William Beale, CEO of Richmond-based Union, said in announcing the deal on Monday.
“After the integration is complete, Union will be the largest community bank based in Virginia and one of the 90 largest banks in the country,” Beale said in a statement.
The bank will retain the Union name and continue to be based in Richmond. With the acquisition, Union will have assets of $7.1 billion, deposits of $5.8 billion, and loans of $5.2 billion, according to Beale.
“It’s been a long time since Virginia has had a bank that size to call its own,” he said. “I believe that we have created the next great Virginia bank.”
The acquisition will give Union First Market a presence in all major Virginia markets. It will expand into Roanoke, Blacksburg, and Staunton and strengthen its presence in Fredericksburg, Richmond, and Charlottesville.
Union First Market currently operates 90 branches, and StellarOne, 56.
About 10 or more branches in overlapping areas – Fredericksburg, Richmond, Charlottesville, and Harrisonburg – will be closed, according to Beale. Decisions about consolidating overlapping branches will not be made until StellarOne converts to Union operating systems, probably next year.
Common shareholders of StellarOne will receive 0.97 share of Union First Market common stock for each StellarOne share. Based on the Union First Market’s closing price of $20.02 last week, the deal would have a per-share value of $19.50 and an overall value of about $445.1 million.
The acquisition could result in job growth at the company’s operations center in Caroline, indicated Beale. It currently employs about 180 people.
“The operations center…will remain our primary operations center,” he said in phone interview on Tuesday.
“There will be job growth there,” added Beale.
The acquisition could be finalized late this year although it is scheduled to be completed in early 2014, said Beale. It will require regulatory and shareholder approval.
StellarOne will continue to operate under its name and existing operating systems until the acquisition is finalized.
Union First Market Bank employs about 1,000 people, and the combined bank will employ about 1,766.
The board of directors of each bank unanimously endorsed the deal.
Under the acquisition plan, the Union First Market board will expand to 19 members and will be made up of 11 from the current board and eight from the StellarOne board.