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The details of the proposed merger are being sent to shareholders of both companies for a vote.
JEFF STURGEON | The Roanoke Times
Union First Market Bank, centered in Richmond, has one branch in Roanoke County (on Virginia 419, near the West Village shopping plaza) and none in the New River Valley.
Monday, June 10, 2013
StellarOne Bank, the leading bank in the New River Valley with deep Christiansburg roots, will change names as it is folded into a larger, Richmond-based bank, according to plans announced Monday.
The proposed merger of StellarOne Corp. into Union First Market Bankshares Corp. will be put to a vote of shareholders of both companies this summer or fall. If approved, Union will acquire StellarOne in a stock transaction valued at $445 million late this year or early next year.
StellarOne Bank ranks first in the Blacksburg-Christiansburg-Radford metropolitan statistical area with $695.6 million in deposits, or 26.1 percent of all FDIC-insured funds in the market.
StellarOne, a community pillar, is an outgrowth of Christiansburg-based FNB Corp., which was founded in 1906 and whose previous name - First National Bank - is etched on a downtown Christiansburg building. After many years as an independent bank, FNB merged in 2008 with Culpeper-based Virginia Financial Group Inc. to form StellarOne Bank. StellarOne has 56 branches.
Union First Market Bank has just one branch in the Roanoke Valley and none in the New River Valley. Most of the 90 Union First branches are in Richmond (where it has 42 locations), Charlottesville, Fredericksburg and nearby communities.
One of the family names behind Union First may be familiar: Ukrop.
The Ukrop's grocery store chain in 1997 established banking services in its Ukrop's Super Markets through the creation of First Market Bank. The Ukrop's grocery on Franklin Road in Roanoke, which operated from June 2007 to October 2009, had a branch. In 2010, First Market Bank merged with Union Bank & Trust, which dates back to 1902 in Virginia, to form Union First Market Bank.
If the merger of StellarOne and Union First goes through, it will create Virginia's largest community bank in terms of assets, with the fifth largest branch network in Virginia, bank officials said.
Carter Bank & Trust, currently the largest Virginia-based community bank, would be displaced, likely to second.
Neither StellarOne nor Union First has so far detailed the proposal's likely effect on employees - 759 at StellarOne, including dozens in its bank operations center in Christiansburg, and 1,044 at Union First.
Ray Smoot, a senior fellow at the Virginia Tech Foundation and longtime board member with StellarOne and FNB, will become the chairman of the combined company if the deal goes through, officials said. Smoot said Monday that location-specific effects will be discussed later.
Management changes are in focus. O.R. Barham, president and CEO of StellarOne, will retire. Union First's current CEO, G. William Beale, will lead the new entity.
In proposing the merger, Smoot said he and other bank leaders are looking out for shareholders, as they are required to do. Under the deal's terms, Union First will pay $445 million in stock, a 20 percent premium over Friday's price for StellarOne stock of $16.21. StellarOne shares jumped Monday to $18.90 to take into account the offer, while Union First stock closed down 26 cents to $19.76.
"There's about a 20 percent premium markup on the stock and about a 26 percent increase in the dividend," Smoot said.
But despite having $7.1 billion in total assets, the combined entity will continue to act like a community bank, Smoot said.
A community bank, he said, "is one that is well connected to and engaged in business in local communities across its footprint." It lends money in the communities where it operates, is led by people from that area and is tied-in with local business, he said.
The Associated Press contributed information to this story.
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