Atlantic Union Bankshares Corporation Completes Acquisition of American National Bankshares Inc.
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Insights
The merger between Atlantic Union Bankshares Corporation and American National Bankshares Inc. is a strategic move that could reshape the competitive landscape in the mid-Atlantic banking sector. By expanding into the Piedmont Triad region and Raleigh, Atlantic Union may capitalize on new market opportunities and diversify its customer base. The exchange ratio of 1.35 shares of Atlantic Union common stock for each share of American National reflects a calculated valuation based on the closing price of Atlantic Union's stock, which investors should note as a benchmark for the deal's perceived value at the time of the announcement.
With the combined assets totaling $24.3 billion, the new entity is poised to leverage economies of scale to improve operational efficiency. However, investors should monitor integration costs and the company's ability to realize synergies. The success of such mergers often hinges on the smooth assimilation of corporate cultures and systems. The appointments to the Boards of Directors could signal a commitment to continuity and stability, which is reassuring for stakeholders concerned about governance and strategic direction post-merger.
From a financial perspective, the transaction value of approximately $507 million is a significant figure that merits attention. Investors should examine how this acquisition affects Atlantic Union's financial ratios, such as its earnings per share (EPS) and return on equity (ROE). The transaction could be accretive to EPS if cost savings and additional revenue streams from the merger outweigh the initial costs and the dilution effect of the additional shares issued.
Long-term shareholder value is contingent upon the merged entity's ability to deliver on its promises of new products and services, as well as maintaining customer loyalty during the transition. The pro forma figures provide a snapshot of the bank's financial health pre-merger, but post-merger performance indicators will be important in assessing the true impact of the merger on Atlantic Union's market position and profitability.
The merger's impact extends beyond the immediate stakeholders and could influence regional economic dynamics. By gaining a stronger foothold in Virginia and entering North Carolina, Atlantic Union is likely to become a more formidable player in the mid-Atlantic banking industry. This increased market share could potentially drive competition, leading to better products and services for consumers.
However, it is essential to consider the potential for reduced competition in areas where both banks previously operated. This could have implications for consumer choice and cost of banking services. Furthermore, the long-term economic benefits are dependent on the merged entity's ability to effectively manage the integration process and deliver on its growth objectives without compromising service quality or financial stability.
Under the terms of the merger agreement, American National shareholders will receive 1.35 shares of Atlantic Union common stock in exchange for each share of American National common stock, with cash paid in lieu of fractional shares. Based on the closing price of Atlantic Union common stock of
“We are excited to have the American National team officially join Atlantic Union Bank,” said John C. Asbury, president and CEO of Atlantic Union. “Together, our banks have more than 200 years of experience serving the needs of local communities throughout the mid-Atlantic region. We look forward to bringing new products and services to American National’s clients, and we believe this transaction will help enable us to deliver sustainable long-term shareholder value.”
In accordance with the merger agreement, Nancy Howell Agee and Joel R. Shepherd have been appointed to the Boards of Directors of Atlantic Union and Atlantic Union Bank.
Subsequent to the closing, on a pro forma basis as of December 31, 2023 before merger-related adjustments, Atlantic Union had
About Atlantic Union Bankshares Corporation
Headquartered in
Caution About Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, statements regarding our expectations with respect to the transaction. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “may,” “will,” “anticipate,” “look forward,” “could,” “should,” and “would,” as well as words of similar meaning or other statements concerning opinions or judgment of us or our management about future events. Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results, expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions, include, among others, the following:
- the possibility that the anticipated benefits of the transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where we do business, or as a result of other unexpected factors or events;
- the impact of purchase accounting with respect to the transaction, or any change in the assumptions used regarding the assets acquired and liabilities assumed to determine their fair value and credit marks;
- the integration of the business and operations of American National may take longer or be more costly than anticipated;
- other factors that may affect our future results including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates; deposit flows; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.
Although we believe that our expectations with respect to forward-looking statements are based on reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that our actual results will not differ materially from any projected future results expressed or implied by such forward-looking statements. Additional factors that could cause results to differ materially from those described above can be found in our most recent annual report on Form 10-K, and other documents subsequently filed by us with the Securities and Exchange Commission. Investors are cautioned not to rely too heavily on any such forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240401426980/en/
Beth Shivak, Senior Vice President and Director of Corporate Communications
Beth.Shivak@atlanticunionbank.com, 804.327.5746
Bill Cimino, Senior Vice President and Director of Investor Relations
Bill.Cimino@atlanticunionbank.com, 804.448.0937
Source: Atlantic Union Bankshares Corporation
FAQ
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