United Bankshares, Inc. (“United”) (NASDAQ:UBSI), the parent company of United Bank (“United Bank”), and Carolina Financial Corporation (“Carolina Financial”) (NASDAQ: CARO), the parent company of CresCom Bank (“CresCom”), today announced that they have entered into a definitive merger agreement. The combined organization will be approximately $25 billion in assets and will rank in the top 35 largest banks in the U.S. based on market capitalization. The merger brings together two of the best-performing banking companies in the country, and uniquely positions the pro forma franchise as the leading community bank in the Southeast and Mid-Atlantic. The transaction will result in a combined company with more than 200 locations in some of the most desirable banking markets in the nation.
United will acquire 100% of the outstanding shares of Carolina Financial in exchange for common shares of United. The exchange ratio will be fixed at 1.13 of United’s shares for each share of Carolina Financial, resulting in an aggregate transaction value of approximately $1.1 billion.
Richard M. Adams, Chairman and CEO of United, said, “We are excited about our partnership with Carolina Financial Corporation and the opportunities it affords both organizations. Our companies share complementary cultures, a commitment to our customers, and a focus on serving our communities. This transaction represents a significant step towards continuing to grow United’s presence in the Carolinas.”
United, with locations in seven states plus the District of Columbia, entered the North and South Carolina markets in 2017.
Carolina Financial CEO Jerry Rexroad will join United as a board member and executive officer. “We are partnering with a bank that has a strong community banking culture, along with the resources of a larger institution. We believe that United is the very best partner to create the most trusted community bank in the communities we serve,” commented Mr. Rexroad. He will also serve as Chairman of United’s Carolinas franchise, and will continue to serve as Chairman of CresCom’s Atlanta-based Crescent Mortgage Company.
The merger agreement has been unanimously approved by the boards of directors of both companies. The merger is expected to close in the second quarter of 2020, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the stockholders of both companies. Carolina Financial will merge into United, and CresCom will merge into United Bank, with United and United Bank being the surviving entities. Carolina Financial’s pending acquisition of North Carolina-based Carolina Trust BancShares, Inc. (NASDAQ: CART) is expected to close prior to year-end 2019. Sandler O’Neill & Partners, L.P served as financial advisor and Bowles Rice LLP provided legal counsel to United. Raymond James & Associates, Inc. served as financial advisor and Nelson Mullins Riley & Scarborough LLP served as legal counsel to Carolina Financial.
