United Bankshares to buy Piedmont Bancorp in $267 million deal

United Bankshares

10/05/2024 13:42

May 10 (Reuters) - United Bankshares  UBSI.O  has agreed
to buy smaller rival Piedmont Bancorp in a deal valued at about
$267 million, the lenders said on Friday, amid growing
consolidation in the U.S. regional banking industry. 
    
    WHY IT'S IMPORTANT 
    High interest rates, exposure to commercial real estate and
muted loan activity have clouded the outlook for regional U.S.
lenders which are more susceptible to economic fluctuations
compared with larger so-called 'too-big-to-fail' rivals.   
    Last year, the failure of three mid-sized U.S. banks
reverberated across the global financial system. In the
aftermath, Treasury Secretary Janet Yellen had said the current
banking environment and pressures on earnings of some U.S.
regional banks may lead to some consolidation in the sector.   
    
    CONTEXT
    United Bankshares expects the acquisition will expand its
reach in the greater Atlanta area.
    Its stock is down nearly 9% this year, through previous
close, giving it a market cap of about $4.63 billion. 
    Piedmont's CEO Monty Watson will serve as regional president
responsible for Georgia operations at United Bankshares after
the deal closes. 
    Late last month, regional lender UMB Financial Corp  UMBF.O 
agreed to buy smaller rival Heartland Financial  HTLF.O  in an
all-stock deal valued at about $2 billion.
        
    BY THE NUMBERS  
    The deal will create a combined bank with more than $32
billion in assets and a network of over 240 locations.   
    Georgia-based Piedmont has about $2.1 billion in assets and
operates in 16 locations. As of March 31, consolidated assets of
United Bankshares totaled about $30 billion.
    United Bankshares reported a first-quarter profit in April
that fell to 64 cents per share compared with 73 cents per share
a year earlier. 
     
    WHAT'S NEXT
    The companies expect the deal to close in the fourth quarter
of 2024 or in the first quarter of 2025. 
            

 (Reporting by Manya Saini in Bengaluru; Editing by Krishna
Chandra Eluri)
 ((Manya.Saini@thomsonreuters.com;))