Union Bankshares and First Market Bank have signed an agreement, pursuant to which First Market will merge with Union in an all stock transaction valued at approximately $105.4m.
First Market operates 39 branches throughout central Virginia with 31 in the greater Richmond metropolitan area. Upon completion of the transaction, Union will operate a combined 97 branch locations.
William Beale, president and CEO of Union, will remain as CEO of the combined company and David Fairchild, currently CEO of First Market, will be the new president. The board of Union Bankshares will be expanded by three members to include James Ukrop, Steven Markel and David Fairchild.
Under the terms of the agreement, common shareholders of First Market will receive 6.7m shares of Union common stock, equal to 33% pro forma ownership. Additionally, First Market’s $10m of non-cumulative preferred equity will convert into shares of Union common stock subject to terms outlined in the merger agreement.
The holding company will move headquarters to Richmond and will be re-named Union First Market Bankshares Corporation. First Market Bank will join Union Bank and Trust Company, Northern Neck State Bank and Rappahannock National Bank as a fourth operating subsidiary of the holding company. The current Union operations centre in Caroline County, Virginia will serve as the operations centre for the holding company and its four subsidiary banks.
The companies expect to consummate the transaction by the end of 2009, subject to customary closing conditions, including regulatory and shareholder approvals.
Mr Beale said: We are excited about the opportunity to bring these two strong organisations together. First Market and Union share a common culture of exceptional customer service. This combination is transformational for our organisations and for banking in Virginia.
