May 10 (Reuters) - United Bankshares 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 agreed to buy smaller rival Heartland Financial 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;))
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