United Bankshares Agrees to Buy Cardinal for $912 Million

Industry: Financial services 2016-08-20

United Bankshares Inc. agreed to buy Cardinal Financial Corp. in an all-stock deal valued at about $912 million to expand in the Washington, D.C., region.

The buyer will pay 0.71 United share for each Cardinal share, a price that represents 2.24 times Cardinal’s tangible book value as of June 30, the companies said Thursday in a statement. The deal is expected to close in the middle of next year, according to the statement.

“This merger aligns perfectly with our longstanding commitment to growth in the D.C. Metro area,” Richard M. Adams, United Bankshares’ chief executive officer, said in the statement. “By uniting, we reinforce our position as the largest locally headquartered community bank.”

Regional bank mergers are accelerating as lenders look to sell or bulk up to counter challenges resulting from the 2008 financial crisis. Low rates have squeezed the profitability of the industry’s business model: collecting more interest from borrowers than they pay for deposits. A slew of new regulations has also hobbled key sources of non-lending income, including the fees banks can charge to businesses for processing card transactions.

Branch Network

Cardinal, which has $4.2 billion in assets, is United’s 10th acquisition in the Washington area, the companies said. Cardinal has a network of 30 branches in the region and operates residential mortgage lending and wealth management subsidiaries. Bernard H. Clineburg, executive chairman at Cardinal, is expected to join United’s board of directors following the merger, according to the statement.

Keefe, Bruyette & Woods Inc., and Bowles Rice LLP advised United, while Sandler O’Neill & Partners LP and LeClairRyan advised Cardinal.