West Virginia’s United Bankshares Reaches Deal to Enter Atlanta

United Bankshares in Charleston, West Virginia, agreed to pay $267 million in stock for Piedmont Bancorp, based in Peachtree Corners, Ga., in a deal that United CEO Rick Adams described as a “low-risk trade on the fairway.”

Announced Friday, the acquisition serves as an entry point into the sprawling $237 billion metro Atlanta deposit market, which Adams called a “natural extension” of the franchise. ‘United, worth $29.9 billion. The company launched an expansion into the Carolinas in 2017. Two years later, United completed $1.1 billion asset transaction to acquire Charleston, South Carolina-based Carolina Financial Corp. worth $4.4 billion, adding 73 branches in North and South Carolina.

Now, United is poised to expand further south to Atlanta, a market with “phenomenal demographics” that is home to 6.3 million people and more than 150,000 businesses, Adams said in an interview. Metro Atlanta’s population is expected to grow another 4.5 percent over the next five years, according to the Census Bureau.

Although Adams did not provide details about the negotiations leading to Friday’s announcement, he said he has known Piedmont CEO Monty Watson for two years, adding that the two men had spoken often . Watson agreed to become regional president, which Adams said would be crucial to the future of the combined company.

“Monty has been there forever,” Adams said.

The combined company will have $32 billion in assets, $25 billion in deposits and 243 branches, including Piedmont’s 16 locations in the Atlanta area. United expects earnings per share to increase by 7.6% in 2025 and 8.3% in 2026. The $267 million transaction price represents a 3.5% dilution of tangible book value per share with a return on investment forecast of 3.5 years. Piedmont “has wonderful relationships” that it can deepen with the resources of a much larger regional bank, Adams said.

Piedmont reported net income totaling $29.2 million in 2023, up 2% year over year. Its net write-offs were minimal and non-performing assets were zero as of March 31, 2024.

“Overall, we like the deal,” Daniel Cardenas, who covers United for Janney Montgomery Scott, wrote in a research note Friday. “United is buying a well-run company at a reasonable price and entering a good growth market with additional potential to gain market share.”

Investors seemed to agree, although their reaction was muted. Shares of United were up about 1% as of Friday afternoon to $40.74 per share.

The merger with United “will allow us to better serve our current customers and reach new audiences with enhanced products and services, while maintaining our personalized community banking approach,” Watson said Friday in a news release.

United considers merger and acquisition activity a business line, according to Adams. Piedmont would be its 34th agreement and the first since December 2021, when it concluded a $303 million deal for Community Bankers Trust Corp. in Richmond, Virginia. This is also United’s first transaction since Adams took over as CEO in April 2022. Adams succeeded his father, Richard Adams Sr., who had served as CEO since 1976.

United plans to close its Piedmont deal in late 2024 or early 2025.