LONDON, UK / ACCESSWIRE / April 25, 2017 / Active Wall St. blog coverage looks at the headline from United Bankshares, Inc. (NASDAQ: UBSI) and Cardinal Financial Corp. (NASDAQ: CFNL). United Bankshares announced on April 24, 2017, that it had completed the acquisition of Tysons Corner, Virginia based Cardinal Financial ("CFC"). This is UBSI's 10th acquisition in the Washington DC metro region and the 31st acquisition to be successfully completed by the current administration. Register with us now for your free membership and blog access at:
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UBSI is a regional bank holding Company with headquarters in Washington, D.C. and Charleston, WV. It is the parent to two banking franchises: United Bank and United Bank, Inc. UBSI had initiated a strategy in 1984 to grow through acquisitions and with the completion of the current acquisition, it becomes the 38th largest bank holding Company in the US based on market capitalization. After the completion of the merger UBSI, now has $19 billion in assets and 145 full service offices in Virginia, West Virginia, Pennsylvania, Maryland, Ohio, and Washington, D.C. In February 2017, UBSI also announced the payment of $0.33 per share for Q1 2017 which was paid on April 03, 2017. FY16 became the 43rd consecutive year in which UBSI increased payment of dividend for its shareholders.
Commenting on the completion of the acquisition of CFC, Richard M. Adams, Chairman and CEO of UBSI said:
"Today, we welcome Cardinal employees, customers and community partners to United. As the Community Bank of the Nation's Capital, we now have even greater capacity to serve our customers, and support our philanthropic efforts by assisting organizations that contribute to the vitality of the D.C. Metro region."
As part of the transaction, Bernard H. Clineburg, Executive Chairman of Cardinal will be inducted into the UBSI's Board of Directors as a member. He said,:
"We are pleased Cardinal found a like-minded partner to further our growth in Northern Virginia, the District of Columbia, and Maryland. United brings to the table the capacity to meet the sophisticated needs of our customers, while at the same time staying true to our commitment to the communities we serve."
UBSI had signed a deal to acquire CFC, a publicly traded financial services holding Company, in August 2016. As per terms of the deal, UBSI would acquire 100% shares of CFC in an all-stock transaction wherein for each CFC's share the shareholder will receive 0.71 share of UBSI. The deal was valued at $912 million which represented 2.24 times CFC's tangible book value as on June 30, 2016. The deal had been approved by the Boards of Directors of both Companies and is waiting for regulatory and shareholder's approvals. Once UBSI received regulatory approval from the Board of Governors of the Federal Reserve System and the Virginia Bureau of Financial Institutions, its shareholders will also vote in favor of the transaction on April 07, 2017.
The acquisition includes CFC's $4.2 billion in assets and its subsidiaries including Cardinal Bank, with 30 branches throughout Virginia, Maryland and Washington, D.C., George Mason Mortgage, LLC, a residential mortgage lending subsidiary, and Cardinal Wealth Services, Inc., a wealth management services subsidiary.
On completion of the acquisition, CFC will become a part of UBSI and will stop trading at the NASDAQ exchange, where it IPOed on April 24, 2017.
Consolidation in the Banking industry
Lower interest rates mixed with increased expensed with regards technology and regulatory compliances are making it very difficult for banks to grow in terms of revenues, earnings etc. This has resulted in consolidation amongst players in the banking sector. Some of the recent transactions include the following: UBSI's acquisition of Bank of Georgetown in June 2016 for $269 million; recently in March 2017, Access National Corporation acquired Middleburg Bank, for $233.1 million; Old Line Bancshares (NASDAQ:OLBK), the parent Company of Old Line Bank, acquired Damascus Community Bank for $40.7 million; Old Line Bancshares also acquired Regal Bank and Trust in 2015; in May 2016, Revere Bank announced the acquisition of Monument Bank of Rockville for $65.1 million; and in October 2016, Revere Bank also bought BlueRidge Bank for $20 million.
At the closing bell, on Monday, April 24, 2017, United Bankshares' stock climbed 1.34%, ending the trading session at $41.60. A total volume of 921.64 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 911.36 thousand shares. In the last six months and previous twelve months, shares of the Company have advanced 13.46% and 12.25%, respectively. The Company's shares are trading at a PE ratio of 20.94 and have a dividend yield of 3.17%. At Monday's closing price, the stock's net capitalization stands at $3.29 billion.
Last Friday, Cardinal Financial's stock closed the trading session flat at $29.04. A total volume of 5.93 million shares have exchanged hands, which was higher than the 3-month average volume of 256.76 thousand shares. Cardinal Financial's stock price advanced 2.51% in the last month, 13.07% in the past six months, and 38.24% in the previous twelve months. The stock is trading at a PE ratio of 19.74 and has a dividend yield of 1.79%. Additionally, the stock currently has a market cap of $936.54 million.
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