UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrantx
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☒ | Definitive Proxy Statement |
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Community Bankers Trust CorporationCOMMUNITY BANKERS TRUST CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 | |||
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[COMMUNITY BANKERS TRUST CORPORATION LOGO]
MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT
Dear Shareholder:
On June 2, 2021, United Bankshares, Inc. and Community Bankers Trust Corporation announced a strategic business combination in which Community Bankers Trust will merge with and into United Bankshares. The combined company, which will retain the United Bankshares name, will have approximately $29 billion in assets and operate over 225 branches across North Carolina, South Carolina, the District of Columbia, Virginia, Maryland, Pennsylvania, Ohio and West Virginia. Community Bankers Trust is sending you this prospectus and proxy statement to invite you to attend a special meeting of shareholders being held by Community Bankers Trust to allow you to vote on the merger.
If the merger is completed, holders of Community Bankers Trust common stock will receive 0.3173 shares of United Bankshares common stock in exchange for each share of Community Bankers Trust common stock held immediately prior to the merger, subject to the payment of cash in lieu of fractional shares. Upon completion of the merger, United Bankshares shareholders are expected to own approximately 94% of the combined company and former Community Bankers Trust shareholders are expected to own approximately 6% of the combined company. The number of shares of United Bankshares common stock that Community Bankers Trust shareholders will receive in the merger for each share of Community Bankers Trust common stock is fixed. The implied value of the consideration Community Bankers Trust shareholders will receive in the merger will change depending on changes in the market price of United Bankshares common stock and will not be known at the time you vote on the merger.
Based on the closing price of United Bankshares common stock on the NASDAQ Global Select Market, or Nasdaq (trading symbol “UBSI”), on June 2, 2021, the last trading day before public announcement of the merger, the 0.3173 exchange ratio represented approximately $13.06 in value for each share of Community Bankers Trust common stock. Based on United Bankshares’ closing price on October 4, 2021 of $36.89, the 0.3173 exchange ratio represented approximately $11.71 in value for each share of Community Bankers Trust common stock. Based on the 0.3173 exchange ratio and the number of shares of Community Bankers Trust common stock outstanding and reserved for issuance under various plans and agreements and in connection with various convertible securities as of October 4, 2021, the maximum number of shares of United Bankshares common stock issuable in the merger is expected to be 7,696,236.
If the average closing price of United Bankshares common stock declines by more than 20% from $41.71 and underperforms an index of banking companies by more than 20% over a designated measurement period, then Community Bankers Trust may terminate the merger agreement unless United Bankshares agrees to increase the number of shares to be issued or pay additional cash consideration to the holders of Community Bankers Trust common stock as part of the merger consideration.
The common stock of United Bankshares and Community Bankers Trust are listed on Nasdaq. United Bankshares and Community Bankers Trust urge you to obtain current market quotations for United Bankshares (trading symbol “UBSI”) and Community Bankers Trust (trading symbol “ESXB”).
The merger is structured to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, and holders of Community Bankers Trust common stock will not recognize any gain or loss for United States federal income tax purposes on the exchange of shares of Community Bankers Trust common stock for shares of United Bankshares common stock in the merger, except with respect to any cash received in lieu of fractional shares of United Bankshares common stock.
At the special meeting of Community Bankers Trust shareholders to be held on November 16, 2021, holders of Community Bankers Trust common stock will be asked to vote to (1) approve the merger agreement, (2) approve, in a non-binding advisory vote, certain compensation that may become payable to Community Bankers Trust’s named executive officers in connection with the merger, and (3) approve the adjournment, postponement or continuance of the special meeting, if necessary, in order to further solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement. Approval of the merger agreement requires the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting if a quorum is established. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Community Bankers Trust common stock entitled to vote is necessary to constitute a quorum at the special meeting.
The Community Bankers Trust board of directors unanimously recommends that Community Bankers Trust shareholders vote “FOR” the approval of the merger agreement, “FOR” the approval, in a non-binding advisory vote, of certain compensation that may become payable to Community Bankers Trust’s named executive officers in connection with the merger, and “FOR” the approval of the adjournment, postponement or continuance of the special meeting, if necessary, in order to further solicit additional proxies if there are not sufficient votes to approve the merger agreement.
This document describes the special meeting, the merger, the documents related to the merger and other related matters. Please carefully read this entire document, including “Risk Factors” beginning on page 16 for a discussion of the risks relating to the proposed merger and owning United Bankshares common stock after the merger. You also can obtain information about United Bankshares and Community Bankers Trust from documents that each has filed with the Securities and Exchange Commission.
Rex L. Smith, III
President and Chief Executive Officer
Community Bankers Trust Corporation
Neither the Securities and Exchange Commission nor any state securities commission or bank regulatory agency has approved or disapproved the United Bankshares common stock to be issued under this document or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense.
The securities to be issued in the merger are cordially invitednot savings accounts, deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation, or any other governmental agency.
The date of this document is October 5, 2021, and it is first being mailed or otherwise delivered to Community Bankers Trust shareholders on or about October 8, 2021.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 16, 2021
On November 16, 2021, Community Bankers Trust Corporation, or Community Bankers Trust, will hold a special meeting of shareholders at 10:00 a.m., local time, at:
Deep Run 3 Building, 9954 Mayland Drive, Richmond, Virginia 23233
to consider and vote upon the following matters:
(1) | a proposal to approve the Agreement and Plan of Reorganization, dated as of June 2, 2021, by and between United Bankshares, Inc. and Community Bankers Trust, and related plan of merger, as each may be amended from time to time, or the merger agreement, a copy of which is attached as Appendix A to the accompanying prospectus and proxy statement; |
(2) | a proposal to approve, in a non-binding advisory vote, certain compensation that may become payable to Community Bankers Trust’s named executive officers in connection with the merger; and |
(3) | a proposal to approve the adjournment, postponement or continuance of the special meeting on one or more occasions, if necessary or appropriate, in order to further solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to approve the merger agreement. |
The Community Bankers Trust board of directors has fixed the close of business on September 27, 2021, as the record date for the special meeting. Only Community Bankers Trust shareholders of record at that time are entitled to notice of, and to vote at, the special meeting, or any adjournment, postponement or continuance of the special meeting. Adoption of each proposal requires the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting if a quorum is established. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Community Bankers Trust common stock entitled to vote is necessary to constitute a quorum at the special meeting.
Whether or not you plan to attend the 2019 Annualspecial meeting, please vote your shares as soon as possible. If you are a shareholder of record, you may vote your shares by submitting your proxy card by mail, by accessing the Internet site listed on the Community Bankers Trust proxy card, or by voting telephonically using the phone number listed on the Community Bankers Trust proxy card. To submit your proxy by mail, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of record of Community Bankers Trust common stock who is present at the special meeting may vote in person instead of by proxy, thereby canceling any previous proxy. In any event, a proxy may be revoked at any time before the special meeting in the manner described in the accompanying document.
If you beneficially hold your shares through a bank, broker, nominee or other holder of record, please vote your shares as soon as possible by following the voting instructions you receive from such holder of record.
The Community Bankers Trust board of directors has unanimously adopted and approved the merger and the merger agreement and recommends that Community Bankers Trust shareholders vote “FOR” the proposals set forth herein.
By Order of the Board of Directors, |
John M. Oakey, III |
Secretary |
YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR SHARES PROMPTLY, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE SPECIAL MEETING.
REFERENCES TO ADDITIONAL INFORMATION
This prospectus and proxy statement is part of a registration statement filed by United Bankshares with the Securities and Exchange Commission, or the SEC, under the Securities Act of 1933, as amended, or the Securities Act, that registers the shares of United Bankshares common stock to be issued to shareholders of Community Bankers Trust in the merger. The registration statement, including the exhibits and schedules attached to the registration statement, contains additional relevant information about United Bankshares and its common stock, Community Bankers Trust and the combined company. The rules and regulations of the SEC allow United Bankshares to omit some information included in the registration statement from this prospectus and proxy statement. The registration statement incorporates by reference important business and financial information about United Bankshares and Community Bankers Trust from documents that are not included in or delivered with this document.
You can obtain documents incorporated by reference in this document free of charge through the SEC website (http://www.sec.gov) or by requesting them in writing or by telephone from United Bankshares or Community Bankers Trust at the following addresses and telephone numbers:
United Bankshares, Inc. 514 Market Street Parkersburg, West Virginia 26102 Attention: Shelli Adams Telephone: (304) 424-8800 | Community Bankers Trust Corporation 9954 Mayland Drive Richmond, Virginia 23233 Attention: John M. Oakey, III Telephone: (804) 934-9999 | |
Morrow Sodali LLC 509 Madison Avenue, Suite 1206 New York, New York 10022 Telephone: (800) 662-5200 |
You will not be charged for any of these documents that you request. Community Bankers Trust shareholders requesting documents should do so by November 9, 2021, in order to receive them before their special meeting.
You should rely only on the information contained in or incorporated by referenced into this document. No one has been authorized to provide you with information or make any representation about the merger or United Bankshares or Community Bankers Trust that differs from, or adds to, the information in or incorporated by reference into this document. United Bankshares or Community Bankers Trust take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This document is dated October 5, 2021, and you should assume that the information in this document is accurate only as of such date. Neither the mailing of this document to Community Bankers Trust shareholders nor the issuance by United Bankshares of shares of United Bankshares common stock in connection with the merger will create any implication to the contrary.
Information on the websites of United Bankshares or Community Bankers Trust, or any subsidiary of United Bankshares or Community Bankers Trust, is not part of this document. You should not rely on that information in deciding how to vote.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this document regarding Community Bankers Trust has been provided by Community Bankers Trust and information contained in this document regarding United Bankshares has been provided by United Bankshares.
See “Where You Can Find More Information” on page 99.
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The following are answers to certain questions that you may have regarding the special meeting and the merger. United Bankshares and Community Bankers Trust urge you to read carefully the remainder of this document, including the risk factors beginning on page 16, because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to, and the documents incorporated by reference in, this document.
Q: | What are holders of Community Bankers Trust common stock being asked to vote on? |
A: | Holders of Community Bankers Trust common stock are being asked to vote to (i) approve the Agreement and Plan of Reorganization, dated as of June 2, 2021, by and between United Bankshares and Community Bankers Trust, and related plan of merger, or merger agreement, as each may be amended from time to time, or the Merger Proposal, (ii) approve, in a non-binding advisory vote, certain compensation that may become payable to Community Bankers Trust’s named executive officers in connection with the merger, or the Merger-Related Compensation Proposal, and (iii) approve the adjournment, postponement or continuance of the special meeting, on one or more occasions, if necessary or appropriate, in order to further solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to approve the Merger Proposal, or the Adjournment Proposal. The merger agreement is attached to this prospectus and proxy statement as Appendix A and is incorporated by reference into this prospectus and proxy statement. |
Q: | When and where is the special meeting of shareholders? |
A: | The special meeting of Community Bankers Trust shareholders will be held at the Deep Run 3 Building, 9954 Mayland Drive, Richmond, Virginia 23233 on November 16, 2021 at 10:00 a.m., local time. |
Q: | What constitutes a quorum for the special meeting? |
A: | The presence at the special meeting, in person or by proxy, of the holders of a majority of the Community Bankers Trust common stock issued and outstanding and entitled to vote at the meeting will constitute a quorum for the transaction of business. If a quorum is not present, the special meeting will be postponed until the holders of the number of shares of Community Bankers Trust common stock required to constitute a quorum attend. If you submit a properly executed proxy card, even if you abstain from voting, your shares of Community Bankers Trust common stock will be counted for purposes of determining whether a quorum is present at the special meeting. If additional votes must be solicited to approve the merger agreement and the Adjournment Proposal is approved, it is expected that the special meeting will be adjourned to solicit additional proxies. |
Q: | What do holders of Community Bankers Trust common stock need to do now? |
A: | After you have carefully read this document and have decided how you wish to vote your shares, please vote your shares as soon as possible. If you are a shareholder of record, to vote by proxy card, indicate on your proxy card how you want your shares to be voted with respect to each of the matters indicated. When complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. Alternatively, you may vote by telephone or through the Internet by following the voting instructions found on your proxy card. If you beneficially hold your shares through a bank, broker, nominee or other holder of record, you should follow the voting instructions you receive from that holder of record to vote your shares. |
Submitting your proxy by Internet, telephone or mail or directing your bank or broker to vote your shares will ensure that your shares are represented and voted at the special meeting. If you would like to attend the special meeting, see “The Special Meeting – Attending the Special Meeting” beginning on page 30.
Q: | Who may solicit proxies on Community Bankers Trust’s behalf? |
A: | In addition to solicitation of proxies by Community Bankers Trust by mail, proxies may also be solicited by Community Bankers Trust’s directors and employees personally, and by telephone, email, facsimile or other means. Community Bankers Trust has also made arrangements with Morrow Sodali LLC to assist it in soliciting proxies. For more information on solicitation of proxies in connection with the special meeting of Community Bankers Trust shareholders, see “The Special Meeting - Solicitation of Proxies” beginning on page 29. |
Q: | Why is my vote as a holder of Community Bankers Trust common stock important? |
A: | If you do not vote by proxy card, telephone or Internet or vote in person at the special meeting, it will be more difficult for Community Bankers Trust to obtain the necessary quorum to hold its special meeting. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Community Bankers Trust common stock entitled to vote is necessary to constitute a quorum at the special meeting. In addition, approval of the Merger Proposal requires the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting if a quorum is established. The Community Bankers Trust board of directors recommends that you vote to approve the Merger Proposal. Further, due to the importance of the vote to approve the Merger Proposal, Community Bankers Trust is also seeking, through the Adjournment Proposal, authority from shareholders to adjourn the special meeting to temporarily delay the meeting to provide time for Community Bankers Trust to solicit additional proxies in the event there are insufficient votes to approve the Merger Proposal. |
Q: | If my shares are held in street name by my broker, will my broker automatically vote my shares for me? |
A: | No. Your broker cannot vote your shares without instructions from you. You should instruct your broker as to how to vote your shares, following the directions your broker provides to you. Please check the voting form used by your broker. Without instructions, your shares will not be voted, which will have the effect described below. |
Q: | What if I abstain from voting or fail to instruct my broker or other holder of record how to vote? |
A: | If you are a holder of Community Bankers Trust common stock and you submit a proxy card in which you abstain from voting, the abstention will be counted toward a quorum at the special meeting and it will have the same effect as a vote against the Merger Proposal, the Merger-Related Compensation Proposal and the Adjournment Proposal. If a quorum is present and a shareholder is not otherwise present or represented by proxy at the special meeting, a failure to vote such shareholder’s shares will have no effect on the outcome of the Merger Proposal, the Merger-Related Compensation Proposal and the Adjournment Proposal. |
If your bank, broker, nominee or other holder of record holds your shares of Community Bankers Trust common stock in “street name,” for each proposal your bank, broker, nominee or other holder of record generally will return a proxy card and vote such shares only if you provide instructions on how to vote by filling out the voter instruction form sent to you by your broker, bank, nominee or other holder of record with this prospectus and proxy statement. Your shares held in “street name” generally will not be voted on any proposal with respect to which you do not provide voting instructions (referred to as broker non-votes) and will not be considered present at the special meeting for purposes of establishing a quorum. Broker non-votes will have no effect for determining whether the Merger Proposal, the Merger-Related Compensation Proposal and the Adjournment Proposal have been approved.
Q: | Can I attend the special meeting and vote my shares in person? |
A: | Yes. All holders of Community Bankers Trust common stock, including shareholders of record and shareholders who beneficially own their shares through banks, brokers, nominees or any other holder of |
record, are invited to attend the special meeting. Holders of record of Community Bankers Trust common stock as of the record date can vote in person at the special meeting. If you wish to vote in person at the special meeting and if you are a shareholder of record, you should bring the enclosed proxy card and proof of identity. If your shares are held in “street name” in a stock brokerage account or by a bank or other custodian, you should provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other custodian. Please note that you may not vote shares held in street name by returning a proxy card directly to Community Bankers Trust or by voting online during the special meeting unless you provide a legal proxy, which you must obtain from your broker, bank or other custodian and, in the case of voting online, you register in advance for the appropriate online meeting of shareholders. At the appropriate time during the special meeting, the shareholders present will be asked whether anyone wishes to vote in person. You should raise your hand at this time to receive a ballot to record your vote. Everyone who attends the special meeting must abide by the rules for the conduct of the meeting distributed at the meeting. |
Even if you plan to attend the special meeting, you are encouraged to vote your shares as soon as possible.
Q: | Will Community Bankers Trust be required to submit the Merger Proposal to its shareholders even if the Community Bankers Trust board of directors has withdrawn or modified its recommendation? |
A: | Yes. Unless the merger agreement is terminated before the special meeting, Community Bankers Trust is required to submit the Merger Proposal to its shareholders even if the Community Bankers Trust board of directors has withdrawn or modified its recommendation, consistent with the terms of the merger agreement. |
Q: | Is the merger expected to be taxable to Community Bankers Trust shareholders? |
A: | Generally, no. The merger is structured to be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or the Code, and holders of Community Bankers Trust common stock will not recognize any gain or loss for United States federal income tax purposes on the exchange of shares of Community Bankers Trust common stock for shares of United Bankshares common stock in the merger, except with respect to any cash received instead of fractional shares of United Bankshares common stock. You should read “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 79 for a more complete discussion of the United States federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the specific tax consequences of the merger to you. |
Q: | If I am a holder of Community Bankers Trust common stock, can I change or revoke my vote? |
A: | Yes. If you are a shareholder of record of common stock, you may change your vote and revoke your proxy by: |
before the meeting, voting by telephone or the Internet at a later time;
before the meeting, submitting a properly signed proxy card with a later date;
voting in person at the special meeting subject to proof of identity; or
delivering written notice that you wish to revoke your proxy to the Secretary of Community Bankers Trust Corporation at 9954 Mayland Drive, Suite 2100, Richmond, Virginia 23233, at or before the special meeting. You must include your control number.
If you hold shares in street name, you must follow your broker’s instructions to change your vote. Any record holder of Community Bankers Trust common stock, or street name holder with a written proxy from the record holder, entitled to vote in person at the special meeting may vote in person regardless of whether a proxy has been previously given, but the mere presence of a shareholder at the special meeting will not constitute revocation of a previously given proxy.
Q: | If I am a Community Bankers Trust shareholder, do I have appraisal or dissenters’ rights? |
A: | No. Under Virginia law, holders of Community Bankers Trust common stock will not be entitled to exercise any appraisal or dissenters’ rights in connection with any of the proposals being presented to them. |
Q: | If I am a holder of Community Bankers Trust common stock with shares represented by stock certificates, should I send in my Community Bankers Trust stock certificates now? |
A: | No. You should not send in your Community Bankers Trust stock certificates at this time. After completion of the merger, United Bankshares will send you instructions for exchanging Community Bankers Trust stock certificates for the merger consideration. The shares of United Bankshares common stock that Community Bankers Trust shareholders will receive in the merger will be issued in book-entry form. Please do not send in your stock certificates with your proxy card. |
Q: | What should I do if I hold my shares of Community Bankers Trust common stock in book-entry form? |
A: | After the completion of the merger, United Bankshares will send you instructions for exchanging shares of Community Bankers Trust common stock held in book-entry form for shares of United Bankshares common stock in book-entry form and cash to be paid instead of fractional shares of United Bankshares common stock. |
Q: | Can I place my Community Bankers Trust stock certificate(s) into book-entry form prior to the merger? |
A: | Yes. Community Bankers Trust stock certificates can be placed into book-entry form prior to the merger. For more information, please contact Community Bankers Trust’s transfer agent, Continental Stock Transfer & Trust Company, at (212) 509-4000. |
Q: | Who can I contact if I cannot locate my Community Bankers Trust stock certificate(s)? |
A: | If you are unable to locate your original Community Bankers Trust stock certificate(s), you should contact Community Bankers Trust’s transfer agent, Continental Stock Transfer & Trust Company, at (212) 509-4000. |
Q: | When do you expect to complete the merger? |
A: | United Bankshares and Community Bankers Trust expect to complete the merger promptly following receipt of all necessary approvals. However, they cannot assure you when or if the merger will occur. United Bankshares and Community Bankers Trust must, among other things, obtain the required approval of Community Bankers Trust shareholders at the special meeting and the required regulatory approvals described below in “The Merger Agreement—Conditions of the Merger” beginning on page 64. |
Q: | What happens if the merger is not completed? |
A: | If the merger is not completed, holders of Community Bankers Trust common stock will not receive any consideration for their shares in connection with the merger. Instead, Community Bankers Trust will remain an independent public company and its common stock will continue to be listed and traded on Nasdaq. In addition, in certain circumstances, a termination fee may be required to be paid by Community Bankers Trust. See “The Merger Agreement—Effect of Termination; Termination Fee” beginning on page 75 for a complete discussion of the circumstances under which termination fees will be required to be paid. |
Q: | Who will be soliciting proxies? |
A: | In addition to soliciting proxies by mail, Community Bankers Trust may be soliciting proxies for the special meeting through its directors and certain employees personally, and by telephone, email, facsimile or other means. In addition, Community Bankers Trust has engaged Morrow Sodali LLC to assist with soliciting proxies on behalf of Community Bankers Trust. See “The Special Meeting—Solicitation of Proxies” beginning on page 29 for more information. |
Q: | Whom should I call with questions? |
A: | Community Bankers Trust shareholders should contact John M. Oakey, III at Community Bankers Trust by telephone at (804) 934-9999, or by e-mail at shareholder@essexbank.com, or Morrow Sodali LLC, Community Bankers Trust’s proxy solicitor, toll-free at (800) 662-5200. |
This summary highlights selected information from this prospectus and proxy statement. It does not contain all of the information that may be important to you. We urge you to carefully read this entire prospectus and proxy statement and the other documents to which this prospectus and proxy statement refers to fully understand the merger and the other matters to be considered at the special meeting. See “Where You Can Find More Information” on page 99to obtain the information incorporated by reference into this prospectus and proxy statement without charge. Each item in this summary includes a page reference directing you to a more complete description of that item.
The Merger (page 33)
We have attached the merger agreement to this prospectus and proxy statement as Appendix A. We encourage you to read the merger agreement. It is the legal document that governs the merger.
In the merger, United Bankshares will acquire Community Bankers Trust by means of the merger of Community Bankers Trust into United Bankshares. United Bankshares will be the surviving entity in the merger.
After the effective time of the merger and as part of the same overall transaction, Essex Bank, a Virginia corporation and a wholly-owned subsidiary of Community Bankers Trust, for no additional consideration and pursuant to the Agreement and Plan of Merger dated June 2, 2021, attached as Exhibit 99.4 to the registration statement on Form S-4 of which this prospectus and proxy statement is a part, will merge with and into United Bank, a Virginia banking corporation, and a wholly-owned subsidiary of United Bankshares, such transaction referred to hereinafter as the bank merger. As a result of the bank merger, the separate existence of Essex Bank will cease and the corporate existence of United Bank, as the merged bank, shall continue unaffected and unimpaired by the bank merger and the merged bank shall be deemed to be the same business and corporate entity as each of Essex Bank and United Bank.
Each share of Community Bankers Trust common stock outstanding will be converted in the merger into 0.3173 shares of United Bankshares common stock as further described below.
Exchange Ratio in the Merger (page 63)
Upon completion of the merger, each Community Bankers Trust shareholder will receive 0.3173 shares of United Bankshares common stock for each share of Community Bankers Trust common stock held immediately prior to the merger. We refer to this ratio as the exchange ratio. The aggregate number of shares of United Bankshares common stock to which a Community Bankers Trust shareholder will be entitled upon completion of the merger will equal 0.3173 multiplied by the number of shares of Community Bankers Trust common stock held by that Community Bankers Trust shareholder. However, United Bankshares will not issue any fractional shares. A Community Bankers Trust shareholder entitled to a fractional share of United Bankshares common stock will instead receive an amount in cash equal to the fraction of a whole share of United Bankshares common stock to which such shareholder would otherwise be entitled in an amount, without any interest thereon, equal to the product of (i) the volume-weighted average closing price on Nasdaq of United Bankshares common stock for the 20 full trading days ending on the second trading day immediately preceding the date on which the merger is completed multiplied by (ii) the fraction of a share of United Bankshares common stock that such holder would otherwise be entitled to receive. As an example, a holder of 10 shares of Community Bankers Trust common stock would receive 3 shares of United Bankshares common stock and an amount of cash equal to the product of 0.173 and the volume-weighted average closing price on Nasdaq of United Bankshares common stock for the 20 full trading days ending on the second trading day immediately preceding the date on which the merger is completed. A Community Bankers Trust shareholder whose direct shareholdings are represented by multiple Community Bankers Trust stock certificates will have all shares associated with those stock certificates
aggregated for purposes of calculating whole shares and cash in lieu of fractional shares to be received upon completion of the merger.
The exchange ratio is a fixed ratio. Therefore, the number of shares of United Bankshares common stock to be received by holders of Community Bankers Trust common stock in the merger will not change if the trading price of United Bankshares common stock or the market value of Community Bankers Trust common stock changes between now and the time the merger is completed, except in limited circumstances where the trading price of United Bankshares common stock falls below certain thresholds when measured during a period shortly before the date that the merger is scheduled to be completed, in which case, Community Bankers Trust will have an opportunity to terminate the merger agreement if United Bankshares elects not to adjust the exchange ratio accordingly. If the average closing price of United Bankshares common stock declines by more than 20% from $41.71 and underperforms an index of banking companies by more than 20% over a designated measurement period, then Community Bankers Trust may terminate the merger agreement unless United Bankshares agrees to increase the number of shares to be issued or pay additional cash consideration to the holders of Community Bankers Trust common stock as part of the merger consideration.
Upon completion of the merger, we expect that United Bankshares shareholders will own approximately 94% of the combined company and former Community Bankers Trust shareholders will own approximately 6% of the combined company.
The market prices of both United Bankshares common stock and Community Bankers Trust common stock will fluctuate prior to the merger. You should obtain current stock price quotations for United Bankshares common stock.
Stock Options (page 64)
Under the merger agreement, at the effective time of the merger, each outstanding stock option to purchase Community Bankers Trust common stock granted under a Community Bankers Trust equity compensation plan that is outstanding and not yet exercised immediately prior to the merger, whether vested or unvested, will vest only as provided pursuant to the terms thereof and will be converted into an option to acquire, on the same terms and conditions as were applicable under such stock option, the number of shares of United Bankshares common stock equal to (a) the number of shares of Community Bankers Trust common stock subject to such stock option multiplied by (b) 0.3173. Such product shall be rounded down to the nearest whole number. The exercise price per share (rounded up to the next whole cent) of each United Bankshares stock option issued for the Community Bankers Trust stock option shall equal (y) the exercise price per share of shares of Community Bankers Trust common stock that were purchasable pursuant to such Community Bankers Trust stock option divided by (z) 0.3173.
Restricted Stock Units (page 64)
Under the merger agreement, at the effective time of the merger, each restricted stock unit grant and any other awards with respect to a shares of Community Bankers Trust common stock subject to vesting, repurchase or other lapse restriction under a Community Bankers Trust equity compensation plan that is outstanding immediately prior to the effective time of the merger other than a Community Bankers Trust stock option shall vest only in accordance with the formula and other terms of the award, be cancelled and converted automatically into the right to receive the merger consideration in respect of each share of Community Bankers Trust underlying such award. The shares of Community Bankers Trust common stock subject to such stock award will be treated in the same manner as all other shares of Community Bankers Trust common stock for such purposes. Any unvested restricted stock units that do not vest in accordance with a Community Bankers Trust equity compensation plan will be converted into restricted stock units of United Bankshares, as adjusted to take into account the exchange ratio.
Community Bankers Trust’s Reasons for the Merger (page 38)
In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, and to recommend that its shareholders approve the Merger Proposal, the Community Bankers Trust board of directors consulted with Community Bankers Trust management, as well as its financial and legal advisors, and considered a number of factors, including, but not limited to, each of the following: the value of the United Bankshares common stock consideration being offered to Community Bankers Trust shareholders, the anticipated future trading value of the United Bankshares common stock consideration, and the expected future receipt by Community Bankers Trust shareholders of dividends as United Bankshares shareholders; each of Community Bankers Trust’s, United Bankshares’, and the combined entity’s business, operations, financial condition and asset quality; the feasibility of, and the results that could be expected to be obtained, if Community Bankers Trust continued to operate independently; the process conducted by its financial advisors to assist the Community Bankers Trust board of directors in structuring the merger with United Bankshares; and the scale, scope, strength and diversity of operations that could be achieved by combining Community Bankers Trust with United Bankshares. For more detail concerning the factors considered by the Community Bankers Trust board of directors in reaching its decision to approve the merger agreement, see the section entitled “The Merger – Community Bankers Trust’s Reasons for the Merger; Recommendation of the Community Bankers Trust Board of Directors.”
Community Bankers Trust’s Recommendation (page 38)
The Community Bankers Trust board of directors believes that the merger is in the best interests of the Community Bankers Trust shareholders. Community Bankers Trust’s board of directors unanimously recommends that Community Bankers Trust shareholders vote “FOR” the Merger Proposal, the Merger-Related Compensation Proposal and the Adjournment Proposal. For the factors considered by the Community Bankers Trust board of directors in reaching its decision to approve the merger agreement, see the section entitled “The Merger – Community Bankers Trust’s Reasons for the Merger; Recommendation of the Community Bankers Trust Board of Directors.”
Opinion of Community Bankers Trust’s Financial Advisor (page 42 and Appendix B)
In considering whether to approve the merger, the Community Bankers Trust board of directors considered the opinion of its financial advisor, Piper Sandler & Co., or Piper Sandler, who delivered a written opinion to the Community Bankers Trust board of directors to the effect that, as of June 2, 2021, the exchange ratio was fair to the holders of Community Bankers Trust common stock from a financial point of view. We have attached the full text of this opinion, dated as of June 2, 2021, to this prospectus and proxy statement as Appendix B. You should read this opinion completely to understand the assumptions made, matters considered, qualifications and limitations of the review undertaken by Piper Sandler in providing its opinion.
Piper Sandler’s opinion is directed to Community Bankers Trust’s board of directors, addresses only the fairness of the exchange ratio pursuant to the merger agreement from a financial point of view to the holders of Community Bankers Trust common stock, and does not address any other aspect of the merger or constitute a recommendation as to how any Community Bankers Trust shareholder should vote at the special meeting held in connection with the merger.
United Bankshares’ Reasons for the Merger (page 41)
In reaching its decision to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the United Bankshares board of directors evaluated the merger agreement, the merger and the other transactions contemplated by the merger agreement in consultation with United Bankshares management, as well as United Bankshares’ financial and legal advisors, and considered a number of factors, including, but not limited to, the following: each of United Bankshares’, Community Bankers
Trust’s and the combined entity’s business, operations, financial condition, asset quality, earnings and prospects; Community Bankers Trust’s familiarity with the Virginia and Maryland markets; and management’s expectation regarding cost synergies, accretion and internal rate of return. For more detail concerning the factors considered by the United Bankshares board of directors in reaching its decision to approve the merger agreement, see the section entitled “The Merger – United Bankshares’ Reasons for the Merger.”
No Dissenters’ or Appraisal Rights (page 57)
The shareholders of Community Bankers Trust will not have any dissenters’ or appraisal rights in connection with the merger and the other matters described in this prospectus and proxy statement.
Accounting Treatment (page 63)
United Bankshares will account for the merger using acquisition accounting in accordance with U.S. generally accepted accounting principles.
Material U.S. Federal Income Tax Consequences (page 79)
The merger is structured to qualify as a tax-free reorganization for U.S. federal income tax purposes. Community Bankers Trust shareholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of their exchange of shares of Community Bankers Trust common stock solely for shares of United Bankshares common stock. Community Bankers Trust shareholders may, however, have to recognize gain in connection with the receipt of any cash received in lieu of fractional shares in the merger. Because this tax treatment may not apply to all Community Bankers Trust shareholders, you should consult your own tax advisor for a full understanding of the merger’s tax consequences that are particular to you. It is a condition to United Bankshares’ and Community Bankers Trust’s obligation to complete the merger that we receive a legal opinion that the merger will be treated for U.S. federal income tax purposes as a reorganization under Section 368 of the Code. This opinion, however, will not bind the Internal Revenue Service, which could take a different view.
Shareholders will also be required to file certain information with their federal income tax returns and to retain certain records with regard to the merger.
The discussion of U.S. federal income tax consequences set forth above is for general information only and does not purport to be a complete analysis or listing of all potential tax effects that may apply to a holder of Community Bankers Trust common stock. Shareholders of Community Bankers Trust are strongly urged to consult their tax advisors to determine the particular tax consequences to them of the merger, including the application and effect of federal, state, local, foreign and other tax laws.
The Companies (page 81)
United Bankshares, Inc.
500 Virginia Street, East
Charleston, West Virginia 25301
(304) 348-8400
United Bankshares is a West Virginia corporation registered as a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended, or the BHCA. United Bankshares elected to be a financial holding company that became effective April 2, 2017. United Bankshares was incorporated and organized in 1982 and began conducting business in 1984 with the acquisition of three wholly-owned subsidiaries. Since its formation in 1982, United Bankshares has acquired 32 banking institutions. United Bankshares has one banking subsidiary, United Bank, operating under the laws of Virginia. United Bankshares’ banking subsidiary offers a full range of commercial and retail banking services and products. United Bank operates 203 full service and
limited service offices – located throughout North Carolina, South Carolina, West Virginia, the Shenandoah Valley Region of Virginia and the Northern Virginia, Maryland and Washington, D.C. areas, southwestern Pennsylvania and southeastern Ohio. United Bankshares also owns nonbank subsidiaries that engage in other community banking services such as asset management, real property title insurance, investment banking, financial planning and brokerage services.
The headquarters of United Bankshares is located in United Center at 500 Virginia Street, East, Charleston, West Virginia. United Bankshares’ executive offices are located in Parkersburg, West Virginia at Fifth and Avery Streets.
United Bankshares’ website can be accessed at https://www.ubsi-inc.com. Information contained on the websites of United Bankshares or any subsidiary of United Bankshares does not constitute a part of this prospectus and proxy statement and is not incorporated into other filings that United Bankshares makes with the SEC. United Bankshares’ common stock is traded on Nasdaq under the symbol “UBSI”.
As of June 30, 2021, United Bankshares had total assets of $27.2 billion, total deposits of $21.6 billion, and shareholders’ equity of $4.4 billion.
Community Bankers Trust Corporation
9954 Mayland Drive
Suite 2100
Richmond, Virginia 23233
(804) 934-9999
Community Bankers Trust is Virginia corporation registered as a bank holding company pursuant to the BHCA. Community Bankers Trust provides financial services through its community bank subsidiary, Essex Bank, a Virginia banking corporation that was established in 1926. Essex Bank currently operates 24 banking offices in Northern Virginia and Maryland.
The principal executive offices of Community Bankers Trust are located at 9954 Mayland Drive, Suite 2100, Richmond, Virginia 23233, and its telephone number is (804) 934-9999. Community Bankers Trust’s website can be accessed at http://www.cbtrustcorp.com. Information contained on the websites of Community Bankers Trust or any subsidiary of Community Bankers Trust does not constitute a part of this prospectus and proxy statement and is not incorporated into other filings that Community Bankers Trust makes with the SEC. Community Bankers Trust’s common stock is traded on Nasdaq under the symbol “ESXB”.
As of June 30, 2021, Community Bankers Trust had total assets of $1.75 billion, total deposits of $1.49 billion, and total shareholders’ equity of $179.7 million.
The Community Bankers Trust Shareholder Meeting (page 28)
The special meeting will be held on Friday, May 17, 2019,November 16, 2021 at 11:10:00 a.m. at the Deep Run 3 Building, 9954 Mayland Drive, Richmond, Virginia 23233.
At the Annual Meeting, you will be asked to elect one director for a term of two years and three directors for a term of three years. You will also be asked to approve an advisory resolution to endorse the Company’s executive compensation program, to approve thespecial meeting, Community Bankers Trust Corporation 2019 Stock Incentive Plan and to ratify the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for 2019. Enclosed with this letter are a formal notice of the Annual Meeting, a proxy statement and a form of proxy.
Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted. Please complete, sign, date and return the enclosed proxy promptly using the enclosed postage-paid envelope. The enclosed proxy, when returned properly executed,shareholders will be voted in the manner directed in the proxy. You can also vote your shares by voting through the internet or by telephone by following the instructions on your proxy card.
We hope that you will participate in the Annual Meeting, either in person or by proxy.
Richmond, Virginia
April 8, 2019asked:
To approve the Merger Proposal;
COMMUNITY BANKERS TRUST CORPORATIONTo approve the Merger-Related Compensation Proposal; and
9954 Mayland Drive, Suite 2100
Richmond, Virginia 23233
To approve the Adjournment Proposal.
Community Bankers Trust Record Date; Vote Required (page 29)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of ShareholdersCommunity Bankers Trust shareholders can vote at the special meeting if they owned shares of Community Bankers Trust Corporation will be held on Friday, May 17, 2019, at 11:00 a.m. local time, at the Deep Run 3 Building, 9954 Mayland Drive, Richmond, Virginia 23233, for the following purposes:
RESOLVED, that the shareholders approve the compensation of executive officers as disclosed in the proxy statement for the 2019 Annual Meeting of Community Bankers Trust Corporation pursuant to the rules of the Securities and Exchange Commission.
If you were a shareholder of recordcommon stock at the close of business on March 20, 2019, then you areSeptember 27, 2021, which is the record date for the
special meeting. On the record date, Community Bankers Trust had 22,464,593 shares of common stock outstanding and approximately 1,681 shareholders entitled to vote. Each Community Bankers Trust shareholder can cast one vote for each share of Community Bankers Trust common stock owned on that date.
The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Community Bankers Trust common stock entitled to vote at the Company’s Annual Meetingspecial meeting is necessary to constitute a quorum. Abstentions and any adjournments or postponements of the meeting. You are also cordially invited to attend the meeting.
Your vote is important. Whether or not you plan to attend the meeting, please vote as soon as possible. You can vote your shares by completing and returning your proxy card or by voting through the internet or by telephone by following the instructions on your proxy card. For additional details, please see the information under the heading “How do I vote?”.
April 8, 2019
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 17, 2019:
The proxy statement is available on the Company’s investor website atwww.cbtrustcorp.com.
TABLE OF CONTENTS
PROXY STATEMENT
This proxy statement is being furnished to the holders of common stock, par value $0.01 per share, of Community Bankers Trust Corporation,common stock held of record by a Virginia corporation. Proxiesbroker or nominee that voted on any matter are counted as present and entitled to vote for purposes of determining a quorum. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers or other nominees have the discretion to vote such shares on routine matters, but not on non-routine matters. In the case of non-routine items, the broker or other nominee holding street name shares cannot vote the shares if it has not received voting instructions. These are considered to be “broker non-votes.” Since there are no routine items to be voted on at the special meeting, brokers or nominees holding shares of Community Bankers Trust common stock that do not receive voting instructions from the beneficial owners of such shares will not be able to return a proxy card with respect to such shares. As a result, these shares will not be considered present at the special meeting and will not count towards the satisfaction of a quorum.
If a quorum exists, the approval of each of the Merger Proposal, the Merger-Related Compensation Proposal and the Adjournment Proposal, requires the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting. Abstentions will have the same effect as a vote against these proposals. Broker non-votes will have no effect for determining whether these proposals have been approved.
As of the record date, directors and executive officers of Community Bankers Trust had the sole right to vote 609,677 shares of Community Bankers Trust common stock, or approximately 2.71% of the outstanding Community Bankers Trust common stock entitled to be voted at the special meeting. Community Bankers Trust directors have entered into support agreements that obligate each director to vote shares of Community Bankers Trust common stock over which each such director has sole voting and dispositive power for approval of the Merger Proposal. As of the close of business on September 27, 2021, the record date for the special meeting, shares constituting 2.32% of Community Bankers Trust common stock were subject to the support agreements.
Conditions to Completion of the Merger (page 64)
The obligations of United Bankshares and Community Bankers Trust to complete the merger depend on a number of conditions being solicitedsatisfied or waived. These conditions include:
Community Bankers Trust shareholders’ approval of the merger agreement;
Approval of the merger by the necessary federal and state regulatory authorities;
The effectiveness of the registration statement filed on behalfForm S-4 of which this prospectus and proxy statement is a part and the absence of any stop order suspending the effectiveness thereof or any proceedings for that purpose initiated or threatened by the SEC;
Authorization for the listing on Nasdaq of the shares of United Bankshares common stock to be issued in the merger;
Absence of any law or court order prohibiting the merger;
Receipt of opinions from counsel to Community Bankers Trust and United Bankshares that the merger will be treated as a “reorganization” under Section 368(a) of the Code;
Neither United Bank nor Rex L. Smith, III, President and Chief Executive Officer of Community Bankers Trust and Essex Bank, shall have taken any action on or before the effective time of the merger to materially breach or to cancel or terminate the employment agreement dated June 2, 2021 by and between Mr. Smith and United Bank;
The accuracy of the other party’s representations and warranties subject to the material adverse effect standard in the merger agreement; and
The performance in all material respects of all obligations contained in the merger agreement.
We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
Regulatory Approvals (page 70)
We cannot complete the merger unless it is approved by the Board of DirectorsGovernors of the Federal Reserve System, or the Federal Reserve, and the Virginia Bureau of Financial Institutions. Once the Federal Reserve approves the merger, we have to wait from 15 to 30 days before we can complete it. During that time, the Department of Justice may challenge the merger. As of the date of this prospectus and proxy statement, United Bankshares and Community Bankers Trust have made all required applications for regulatory approval including a request for waiver from the application required by Section 3 of the Bank Holding Company Act of 1956, as amended. The Virginia Bureau of Financial Institutions approved the applications for the merger and bank merger on September 7, 2021. The application, and request for waiver, submitted to the Federal Reserve are still under review by the Federal Reserve. We cannot be certain when or if we will receive the approval of the Federal Reserve or, if obtained, whether it will contain terms, conditions or restrictions not currently contemplated that will be detrimental to the combined company after completion of the merger.
Under the merger agreement, United Bankshares is not required to agree to any condition or restriction or take any action or commit to take any action as part of any necessary regulatory approval if such agreements or the taking of such action would, in the reasonable good faith judgment of the United Bankshares Board, be materially financially burdensome to the business, operations, financial condition or results of operations of United Bankshares or Community Bankers Trust such that, had such condition or requirement been known, United would not, in its reasonable good faith judgment, have entered into the merger agreement, which we refer to as a materially burdensome regulatory condition.
Termination of the Merger Agreement (page 74)
Community Bankers Trust and United Bankshares may mutually agree to terminate the merger agreement at any time upon a vote by a majority of the board of directors of each of Community Bankers Trust and United Bankshares.
Either Community Bankers Trust or United Bankshares may terminate the merger agreement if the merger is not complete by May 31, 2022, unless the failure of the merger to be usedconsummated arises out of or results from the knowing action or inaction of the party seeking to terminate.
Either Community Bankers Trust or United Bankshares may terminate the merger agreement if (i) final action has been taken by any governmental authority whose approval is required for consummation of the merger and the other transactions contemplated by the merger agreement, which final action has become nonappealable and does not approve the merger agreement or the transactions contemplated by the merger agreement, or such governmental authority has approved of the merger agreement or the transactions contemplated by the merger agreement with a materially burdensome regulatory condition, or (ii) an application submitted to any governmental authority whose approval is required for the consummation of the merger has been permanently withdrawn at the 2019 Annual Meetingrequest or suggestion of Shareholders. such governmental authority (except to the extent that such action, denial or withdrawal or the imposition of such condition is due to the failure of the party seeking to terminate to perform or observe the covenants of such party).
United Bankshares may terminate the merger agreement if any of the following occurs:
Community Bankers Trust materially breaches any of its representations, warranties, covenants or agreements under the merger agreement and does not or cannot cure the breach within 30 days of written notice of the breach;
The Annual Meeting willCommunity Bankers Trust shareholders do not approve the merger agreement;
As of May 31, 2022, (i) the continued accuracy of Community Bankers Trust’s representations and warranties in the merger agreement cannot be heldconfirmed by Community Bankers Trust, (ii) the performance in all material respects of all of its obligations in the merger agreement cannot be confirmed by Community Bankers Trust, or (iii) Rex L. Smith, III, the President and Chief Executive Officer of Community Bankers Trust and Essex Bank, has taken action on or before the effective time of the merger to materially breach or to cancel or terminate the employment agreement between United Bank and Mr. Smith dated June 2, 2021 (provided that such failure is not a result of United Bankshares’ failure to perform, in any material respect, any of its covenants or agreements contained in the merger agreement or the material breach by United Bankshares of any of its representations or warranties contained in the merger agreement);
The Community Bankers Trust board of directors fails (i) to recommend approval of the merger agreement, or changes, withdraws, qualifies or modifies, or publicly proposes to change, withdraw, qualify or modify, in a manner that is adverse to United, (ii) to reaffirm its recommendation for approval of the merger agreement within ten (10) business days after United requests such reaffirmation in writing at any time following the public announcement of an acquisition proposal, or (iii) to comply in all material respects with its obligations under the merger agreement with respect to an acquisition proposal; or
Community Bankers Trust enters into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, or other similar agreement constituting or related to, or which is intended to or would be reasonably likely to lead to any tender or exchange offer, proposal for a merger, consolidation or other business combination involving Community Bankers Trust or any of its significant subsidiaries or any proposal or offer to acquire equity interests representing 24.99% or more of the voting power of, or at least 24.99% of the assets or deposits of, Community Bankers Trust or any of its significant subsidiaries.
Community Bankers Trust may terminate the merger agreement if any of the following occurs:
United Bankshares materially breaches any of its representations, warranties, covenants or agreements under the merger agreement and does not or cannot cure the breach within 30 days of written notice of the breach;
The Community Bankers Trust shareholders do not approve the merger agreement;
As of May 31, 2022, United Bankshares is not able to confirm, (i) the continued accuracy of its representations and warranties in the merger agreement or (ii) the performance in all material respects of all of its obligations in the merger agreement (provided that such failure is not a result of Community Bankers Trust’s failure to perform, in any material respect, any of its covenants or agreements contained in the merger agreement or the material breach by Community Bankers Trust of any of its representations or warranties contained in the merger agreement); or
If both (i) the average of the closing sale prices of United Bankshares common stock, or the average United Bankshares stock price, as reported on Nasdaq during the 20 consecutive full trading days ending at the Deep Run 3 Building, 9954 Mayland Drive, Richmond,closing of trading on the trading day immediately prior to the latest of (A) the date on which the last regulatory approval necessary is received (and any statutory waiting period in respect thereof has expired) or (B) the latest date on which the Community Bankers
Trust shareholders approve the merger, which date we refer to as the determination date, is less than $33.37, and (ii) (1) the quotient of the average United Bankshares stock price divided by $41.71, shall be less than 80% of (2) the quotient of the average of the daily current market price of the KBW Regional Banking Index, or the Index, for the 20 consecutive full trading days ending at the closing of trading on the trading day immediately prior to the determination date divided by the closing price for the Index on June 1, 2021. If Community Bankers Trust elects to terminate under the provision described above, United Bankshares shall have the option to increase the exchange ratio or pay an additional cash payment to each Community Bankers Trust shareholder as part of the merger consideration. |
Additionally, Community Bankers Trust may terminate the merger agreement in order to enter into an agreement with respect to an unsolicited acquisition proposal that if consummated would result in a transaction that is (i) more favorable to Community Bankers Trust shareholders from a financial point of view than the merger, (ii) fully financed or reasonably capable of being fully financed, (iii) reasonably likely to receive all required approvals of governmental authorities on a timely basis and (iv) otherwise reasonably capable of being completed on the terms proposed, provided that United Bankshares does not make a counteroffer that the Community Bankers Trust board of directors determines is at least as favorable to the other proposal and Community Bankers Trust pays the termination fee described below.
Termination Fees (page 75)
In the event that the merger agreement is terminated (i) by Community Bankers Trust in order to concurrently enter into an agreement with respect to an unsolicited acquisition proposal that is (a) more favorable to its shareholders from a financial point of view than the merger with United Bankshares, (b) fully financed or reasonably capable of being fully financed, (c) reasonably likely to receive all required governmental approvals on a timely basis and (d) otherwise reasonably capable of being completed on the terms proposed, and United Bankshares does not make a counteroffer that the Community Bankers Trust board of directors determines is at least as favorable to the unsolicited acquisition proposal or (ii) by United Bankshares because the Community Bankers Trust board of directors fails to recommend, withdraws, modifies or changes its recommendation of the merger in a manner adverse in any respect to the interests of United Bankshares and within 12 months after the date of termination of the merger agreement, Community Bankers Trust enters into an agreement with respect to another acquisition proposal or consummates another acquisition proposal, then Community Bankers Trust must pay United Bankshares a termination fee of $12,132,000.
Waiver and Amendment (page 68)
United Bankshares and Community Bankers Trust may jointly amend the merger agreement and each may waive its right to require the other party to adhere to the terms and conditions of the merger agreement. However, United Bankshares and Community Bankers Trust may not do so after Community Bankers Trust shareholders approve the merger agreement if the amendment or waiver would violate the Virginia 23233,Stock Corporation Act.
Interests of Directors and Executive Officers in the Merger that Differ from Your Interests (page 58)
Some of the directors and executive officers of Community Bankers Trust have interests in the merger that differ from, or are in addition to, their interests as shareholders of Community Bankers Trust. These interests exist because of, among other things, employment or severance agreements that the executive officers entered into with Community Bankers Trust, rights that these executive officers and directors have under Community Bankers Trust’s benefit plans including equity plans and deferred compensation plans, agreements or arrangements with United Bankshares or its subsidiaries, including United Bank, to continue or serve as employees, contractors and/or directors following the merger, and rights to indemnification and directors and
officers insurance following the merger. The employment and severance agreements provide certain executive officers with severance benefits if their employment is terminated in connection with the merger. The aggregate compensation that certain Community Bankers Trust directors and named executive officers may receive as a result of the merger is described in greater detail under “Interests of Certain Community Bankers Trust Directors and Executive Officers in the Merger” beginning on Friday, May 17, 2019, beginning at 11:00 a.m. local time, forpage 58.
In addition, as of the purposesrecord date of the special meeting, Community Bankers Trust directors and executive officers owned, in the aggregate, options to purchase 1,072,500 shares of Community Bankers Trust common stock and restricted stock units granted under a Community Bankers Trust equity compensation plan. The treatment of the options and restricted stock units is set forth in the Noticemerger agreement and described in greater detail under “Interests of Annual MeetingCertain Community Bankers Trust Directors and Executive Officers in the Merger” beginning on page 58.
United Bankshares will invite all members of Shareholders.the Community Bankers Trust board of directors to serve on United Bank’s Richmond Advisory Board or another appropriate advisory board maintained by United Bankshares or United Bank for the region in which the individual resides.
The members of the Community Bankers Trust board of directors knew about these additional interests and considered them when they approved the merger agreement and the merger.
Your vote is important. Whether or not you plan to attendMaterial Differences in the meeting, please vote as soon as possible.Rights of United Bankshares Shareholders and Community Bankers Trust Shareholders (page 86)
The rights of United Bankshares shareholders are governed by West Virginia law and by United Bankshares’ articles of incorporation and bylaws. The rights of Community Bankers Trust shareholders are governed by Virginia law and by Community Bankers Trust’s articles of incorporation and bylaws. Upon completion of the merger, the rights of the United Bankshares shareholders, including former shareholders of Community Bankers Trust, will be governed by West Virginia law and the articles of incorporation and bylaws of United Bankshares.
This prospectus and proxy statement contains descriptions of the material differences in shareholder rights under each of the United Bankshares and Community Bankers Trust governing documents.
QUESTIONS AND ANSWERS ABOUTRISK FACTORS
THE ANNUAL MEETING AND VOTING
Why did I receive these proxy materials?
ThisIn addition to general investment risks and the other information contained in or incorporated by reference into this prospectus and proxy statement, will be mailed to holders ofincluding the Company’s common stockmatters addressed under the heading “Cautionary Statement Regarding Forward-Looking Statements” on or about April 12, 2019. The Company’s Board of Directors is asking for your proxy. By givingpage 23 and the Company your proxy, you authorizematters described under the proxy holders (Rex L. Smith, III, Bruce E. Thomas and John M. Oakey, III) to vote your shares atcaption “Risk Factors” in the Annual Meeting according to the instructions that you provide. If the Annual Meeting adjourns or is postponed, your proxy will be used to vote your shares when the meeting reconvenes.
The Company’s 2018 Annual Report to Shareholders, which includes a copy of the Company’s Annual ReportReports on Form Forms 10-K filed by United Bankshares and Community Bankers Trust for the year ended December 31, 2018,2020, Community Bankers Trust shareholders should consider the matters described below in determining whether to approve the merger agreement.
Because the exchange ratio is fixed, fluctuations in the trading price of United Bankshares common stock will change the value of the shares of United Bankshares common stock Community Bankers Trust shareholders receive in the merger.
The exchange ratio is set at 0.3173 shares of United Bankshares common stock for each share of Community Bankers Trust common stock. As a result, the market value of the United Bankshares common stock that Community Bankers Trust shareholders receive in the merger will depend on the market price of United Bankshares common stock at the time the shares are issued. After the merger, the market value of United Bankshares common stock may decrease and be lower than the market value of United Bankshares common stock that was used in calculating the exchange ratio in the merger. Except as fileddescribed in this prospectus and proxy statement, there will be no adjustment to the fixed number of shares of United Bankshares common stock that will be issued to Community Bankers Trust shareholders based upon changes in the market price of United Bankshares common stock or Community Bankers Trust common stock prior to the closing.
There may be an adjustment to the fixed number of shares of United Bankshares common stock that will be issued to Community Bankers Trust shareholders in limited circumstances if the market price of United Bankshares common stock falls more than 20% on an actual basis and 20% on a relative basis to the KBW Regional Banking Index (KRX) prior to the closing. However, any changes to the fixed number of shares of United Bankshares common stock will not increase the per share value that Community Bankers Trust shareholders will receive in the merger from the value calculated using the pre-announcement market price of United Bankshares common stock. The Community Bankers Trust board of directors may terminate the merger agreement if United Bankshares elects not to adjust the exchange ratio in the foregoing circumstances, in which case the merger will not occur.
The market price of United Bankshares common stock at the time the merger is completed may vary from the price of United Bankshares common stock on the date the merger agreement was executed, on the date of this prospectus and proxy statement and on the date of the special meeting as a result of various factors that are beyond the control of United Bankshares and Community Bankers Trust, including, but not limited to, general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. In addition to the approval of the merger agreement by Community Bankers Trust shareholders, completion of the merger is subject to receipt of required regulatory approvals and satisfaction of other conditions that may not occur until after the special meeting. Therefore, at the time of the special meeting, Community Bankers Trust shareholders will not know the precise value of the consideration they will receive at the effective time of the merger. Community Bankers Trust shareholders should obtain current market quotations for shares of United Bankshares common stock.
The market price of United Bankshares common stock after the merger may be affected by factors different from those affecting the shares of Community Bankers Trust or United Bankshares currently.
Upon completion of the merger, holders of Community Bankers Trust common stock will become holders of United Bankshares common stock. United Bankshares’ business differs from that of Community Bankers Trust, and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the
independent results of operations of each of United Bankshares and Community Bankers Trust. For a discussion of the businesses of United Bankshares and Community Bankers Trust and of certain factors to consider in connection with those businesses, see the documents incorporated by reference or described elsewhere in this prospectus and proxy statement.
The integration of the operations of United Bankshares and Community Bankers Trust may be more difficult, costly or time-consuming than anticipated.
The success of the merger will depend, in part, on United Bankshares’ ability to realize the anticipated benefits and cost savings from successfully combining the businesses of United Bankshares and Community Bankers Trust and to combine the businesses of United Bankshares and Community Bankers Trust in a manner that permits growth opportunities and cost savings to be realized without materially disrupting the existing customer relationships of Community Bankers Trust or decreasing revenues due to loss of customers. If United Bankshares is not able to achieve these objectives, the anticipated benefits and cost savings of the merger may not be realized fully or at all or may take longer to realize than expected.
It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the merger. The loss of key employees could adversely affect United Bankshares’ ability to successfully conduct its business in the markets in which Community Bankers Trust now operates, which could have an adverse effect on United Bankshares’ financial results and the value of its common stock. If United Bankshares experiences difficulties with the integration process, the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause Community Bankers Trust to lose customers or cause customers to remove their accounts from Community Bankers Trust and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Community Bankers Trust and United Bankshares during this transition period and for an undetermined period after consummation of the merger.
The success of the merger will also depend on United Bankshares’ ability to:
Retain and attract qualified personnel to, United Bankshares and Community Bankers Trust;
Maintain existing relationships with depositors of Community Bankers Trust to minimize withdrawals of deposits prior to and subsequent to the merger;
Maintain and enhance existing relationships with borrowers to limit unanticipated losses from loans of Community Bankers Trust;
Control the incremental non-interest expense from United Bankshares to maintain overall operating efficiencies; and
Compete effectively in the communities served by United Bankshares and Community Bankers Trust and in nearby communities.
United Bankshares may not be able to manage effectively its growth resulting from the merger.
Regulatory approvals may not be received, may take longer than expected or impose conditions that are not presently anticipated.
Before the merger may be completed, we must obtain various approvals or consents from the Federal Reserve and various bank regulatory and other authorities. These regulators may impose conditions on the completion of the merger or require changes to the terms of the merger.
There can be no assurance that there will not be any conditions imposed or required changes to the terms of the merger required by the regulators, and such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs on or limiting the revenues of United Bankshares following the merger. There can be no assurance as to whether the approval from the Federal Reserve will be received, the timing of the Federal Reserve’s approval, or whether any conditions will be imposed. The merger agreement contains a condition to the obligation of each of United Bankshares and Community Bankers Trust to close the merger that the required regulatory approvals not contain any materially burdensome regulatory condition. See “The Merger Agreement – Regulatory Approvals” on page 70.
United Bankshares may fail to realize the cost savings estimated for the merger.
Although United Bankshares estimates that it will realize cost savings of approximately $12.7 million annually (excluding one-time costs and expenses associated with the merger with Community Bankers Trust) from the merger when fully phased in, it is possible that the estimates of the potential cost savings could turn out to be incorrect. For example, the combined purchasing power may not be as strong as expected, and therefore the cost savings could be reduced. In addition, future business developments may require United Bankshares to continue to operate or maintain some facilities or support functions that are currently expected to be combined or reduced. The cost savings estimates also depend on United Bankshares’ ability to combine the businesses of United Bankshares and Community Bankers Trust in a manner that permits those costs savings to be realized. If the estimates turn out to be incorrect or United Bankshares is not able to combine the two companies successfully, the anticipated cost savings may not be fully realized or realized at all, or may take longer to realize than expected.
The merger may distract management of United Bankshares and Community Bankers Trust from their other responsibilities.
The merger could cause the respective management groups of United Bankshares and Community Bankers Trust to focus their time and energies on matters related to the transaction that otherwise would be directed to their business and operations. Any such distraction on the part of either company’s management, if significant, could affect its ability to service existing business and develop new business and adversely affect the business and earnings of United Bankshares or the business and earnings of the combined company.
If the merger is not completed, United Bankshares and Community Bankers Trust will have incurred substantial expenses without realizing the expected benefits of the merger.
Each of United Bankshares and Community Bankers Trust has incurred substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing this prospectus and proxy statement and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, United Bankshares and Community Bankers Trust would have to recognize these expenses without realizing the expected benefits of the merger.
Community Bankers Trust shareholders will have less influence as shareholders of United Bankshares than as shareholders of Community Bankers Trust.
Community Bankers Trust shareholders currently have the right to vote in the election of the board of directors of Community Bankers Trust and on other matters affecting Community Bankers Trust. Following the merger, the shareholders of Community Bankers Trust as a group will own approximately 6% of the combined organization. When the merger occurs, each Community Bankers Trust shareholder that receives shares of United Bankshares common stock will become a shareholder of United Bankshares with a percentage ownership of the combined organization much smaller than such shareholder’s percentage ownership of Community Bankers Trust. Because of this, Community Bankers Trust shareholders will have less influence on the
management and policies of United Bankshares than they now have on the management and policies of Community Bankers Trust.
Some of the directors and executive officers of Community Bankers Trust may have interests in the merger that differ from the interests of non-director or non-management shareholders.
The interests of some of the directors and executive officers of Community Bankers Trust may be different from those of other holders of Community Bankers Trust common stock, and directors and executive officers of Community Bankers Trust may be participants in arrangements that are different from, or in addition to, those of other holders of Community Bankers Trust common stock. These interests are described in more detail in the section entitled “The Merger – Interests of Certain Community Bankers Trust Directors and Executive Officers in the Merger” beginning on page 58.
The fairness opinion obtained by Community Bankers Trust from its financial advisor will not reflect changes in circumstances between the date of such opinion and the completion of the merger.
Community Bankers Trust has not obtained an updated fairness opinion as of the date of this prospectus and proxy statement from Piper Sandler & Co., Community Bankers Trust’s financial advisor. Changes in the operations and prospects of Community Bankers Trust or United Bankshares, general market and economic conditions and other factors that may be beyond the control of Community Bankers Trust and United Bankshares may alter the value of Community Bankers Trust or United Bankshares or the prices of shares of Community Bankers Trust common stock or United Bankshares common stock by the time the merger is completed. The opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion. Because Community Bankers Trust does not anticipate asking its financial advisor to update its opinion, the June 2, 2021 opinion does not address the fairness of the exchange ratio, from a financial point of view, at the time the merger is completed. The opinion is included as Appendix B to this prospectus and proxy statement. For a description of the opinion that Community Bankers Trust received from its financial advisor, please refer to “The Merger – Opinion of Community Bankers Trust’s Financial Advisor” on page 42. For a description of the other factors considered by Community Bankers Trust’s board of directors in determining to approve the merger, please refer to “The Merger – Community Bankers Trust’s Reasons for the Merger; Recommendation of the Community Bankers Trust Board of Directors” on page 38.
The merger agreement limits Community Bankers Trust’s ability to pursue an alternative acquisition proposal and requires Community Bankers Trust to pay a termination fee of $12,132,000 under limited circumstances relating to alternative acquisition proposals.
The merger agreement prohibits Community Bankers Trust from soliciting, initiating, or encouraging certain alternative acquisition proposals with any third party, subject to exceptions set forth in the merger agreement. See “The Merger Agreement—Acquisition Proposals” on page 69. The merger agreement also provides for the payment by Community Bankers Trust of a termination fee in the amount of $12,132,000 in the event that the other party terminates the merger agreement for certain reasons. These provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of Community Bankers Trust from considering or proposing such an acquisition. See “The Merger Agreement—Effect of Termination; Termination Fees” on page 75.
The merger will not be completed unless important conditions are satisfied.
Specified conditions set forth in the merger agreement must be satisfied or waived to complete the merger. If the conditions are not satisfied or waived, to the extent permitted by law or stock exchange rules, the merger will not occur or will be delayed and each of United Bankshares and Community Bankers Trust may lose some or all of the intended benefits of the merger. The following conditions, in addition to other closing conditions,
must be satisfied or waived, if permissible, before United Bankshares and Community Bankers Trust are obligated to complete the merger:
The merger agreement and merger must be duly approved by the requisite vote of the shareholders of Community Bankers Trust;
All required regulatory approvals must be obtained;
The absence of any law or order by a court or governmental authority that prohibits consummation of the merger;
Neither Rex L. Smith, III, President and Chief Executive Officer of Community Bankers Trust and Essex Bank, nor United Bank shall have taken any action on or before the effective time of the merger to materially breach or to cancel or terminate the employment agreement between Mr. Smith and United Bank dated June 2, 2021;
The registration statement on Form S-4 shall become effective under the Securities Act and Exchange Commission,no stop order shall have been issued or threatened by the SEC; and
To the extent required, the shares of United Bankshares common stock to be issued in the merger must be approved for listing on Nasdaq.
Some of the conditions to the merger may be waived by United Bankshares or Community Bankers Trust without resoliciting shareholder approval of the merger agreement.
Some of the conditions set forth in the merger agreement may be waived by United Bankshares or Community Bankers Trust, subject to the agreement of the other party in specific cases. See “The Merger Agreement – Conditions to of the Merger.” If any conditions are waived, Community Bankers Trust or United Bankshares, as applicable, will evaluate whether an amendment of this prospectus and proxy statement and resolicitation of proxies is being mailedwarranted. In the event that the board of directors of Community Bankers Trust or United Bankshares determines that resolicitation of its shareholders is not warranted, United Bankshares and Community Bankers Trust will have the discretion to complete the transaction without seeking further Community Bankers Trust shareholder approval.
Termination of the merger agreement could negatively impact Community Bankers Trust or United Bankshares.
If the merger agreement is terminated, there may be various consequences. For example, Community Bankers Trust’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. If the merger agreement is terminated and Community Bankers Trust’s board of directors seeks another merger or business combination, Community Bankers Trust shareholders cannot be certain that Community Bankers Trust will be able to find a party willing to pay the equivalent or greater consideration than that which United Bankshares has agreed to pay in the merger. If the merger is not completed, the ongoing business, financial condition and results of operations of each party may be materially adversely affected and the market price of each party’s common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the merger will be completed. In addition, Community Bankers Trust’s or United Bankshares’ business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. In addition, if the merger agreement is terminated under certain circumstances, including circumstances involving a change in recommendation by Community Bankers Trust’s board of directors, Community Bankers Trust may be required to pay United Bankshares a termination fee of $12,132,000. See “The Merger Agreement – Effect of Termination; Termination Fee” on page 75.
Community Bankers Trust shareholders do not have dissenters’ appraisal rights in the merger.
Dissenters’ appraisal rights are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction.
Under the Virginia Stock Corporation Act, shareholders are not entitled to relief as dissenting shareholders if the shares of the corporation for which the dissenting shareholder would otherwise be entitled to relief are covered securities under Section 18(b)(1)(A) or (B) of the Securities Act on the record date fixed to determine the shareholders entitled to receive notice of the meeting of shareholders to act upon the corporate action requiring appraisal rights.
Because Community Bankers Trust common stock is listed on Nasdaq, holders of Community Bankers Trust common stock will not be entitled to dissenters’ appraisal rights in the merger with respect to their shares of Community Bankers Trust common stock.
Failure to complete the merger could negatively affect the market price of Community Bankers Trust common stock.
If the merger is not completed for any reason, Community Bankers Trust will be subject to a number of material risks, including the following:
The market price of its common stock may decline to the extent that the current market prices of its shares reflect a market assumption that the merger will be completed;
Costs relating to the merger, such as legal, accounting and financial advisory fees, and, in specified circumstances, termination fees, must be paid even if the merger is not completed;
The diversion of management’s attention from the day-to-day business operations and the potential disruption to Community Bankers Trust’s employees and business relationships during the period before the completion of the merger may make it difficult to regain financial and market positions if the merger does not occur; and
If Community Bankers Trust’s board of directors seeks another merger or business combination, Community Bankers Trust shareholders cannot be certain that Community Bankers Trust will be able to find a party willing to pay an equivalent or greater consideration than that which United Bankshares has agreed to pay in the merger.
The shares of United Bankshares common stock to be received by Community Bankers Trust shareholders as a result of the merger will have different rights from the shares of Community Bankers Trust common stock.
Upon completion of the merger, Community Bankers Trust shareholders will become United Bankshares shareholders and their rights as shareholders will be governed by the United Bankshares articles of incorporation and the United Bankshares bylaws. The rights associated with Community Bankers Trust common stock are different from the rights associated with United Bankshares common stock. Please see “Comparative Rights of Shareholders” beginning on page 86 for a discussion of the different rights associated with United Bankshares common stock.
Community Bankers Trust will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Community Bankers Trust. These uncertainties may impair Community Bankers Trust’s ability to attract, retain and motivate strategic personnel until the merger is consummated, and could cause customers and others that
deal with Community Bankers Trust to seek to change existing business relationships with Community Bankers Trust. Experienced employees in the financial services industry are in high demand, and competition for their talents can be intense. Employees of Community Bankers Trust may experience uncertainty about their future role with the surviving entity until, or even after, strategies with regard to the combined company are announced or executed. If strategic Community Bankers Trust employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the surviving entity, Community Bankers Trust’s business following the merger could be harmed. In addition, the merger agreement restricts Community Bankers Trust from making certain acquisitions and taking other specified actions until the merger occurs without the consent of United Bankshares. These restrictions may prevent Community Bankers Trust from pursuing attractive business opportunities that may arise prior to the completion of the merger. See “The Merger Agreement – Conduct of Business Pending the Merger” on page 72.
If the merger does not constitute a reorganization under Section 368(a) of the Code, then each Community Bankers Trust shareholder may be responsible for payment of U.S. income taxes related to the exchange of Community Bankers Trust common stock for United Bankshares common stock.
The United States Internal Revenue Service, or the IRS, may determine that the merger does not qualify as a nontaxable reorganization under Section 368(a) of the Code. In that case, each Community Bankers Trust shareholder would recognize a gain or loss equal to the difference between the (i) the sum of the fair market value of United Bankshares common stock received by the Community Bankers Trust shareholder in the merger and (ii) the Community Bankers Trust shareholder’s adjusted tax basis in the shares of Community Bankers Trust common stock exchanged therefor.
Litigation against Community Bankers Trust or United Bankshares, or the members of the Community Bankers Trust board of directors or United Bankshares board of directors, could prevent or delay the completion of the merger.
Purported shareholder plaintiffs may assert legal claims related to the merger. The results of any such potential legal proceeding would be difficult to predict and such legal proceedings could delay or prevent the merger from being completed in a timely manner. The existence of litigation related to the merger could affect the likelihood of obtaining the required approval from Community Bankers Trust shareholders. Moreover, any litigation could be time consuming and expensive, and could divert the attention of the respective management teams of Community Bankers Trust and United Bankshares away from their companies’ regular business. Any lawsuit adversely resolved against Community Bankers Trust, United Bankshares or the members of the Community Bankers Trust board of directors or the United Bankshares board of directors could have a material adverse effect on each party’s business, financial condition and results of operations.
One of the conditions to the consummation of the merger is the absence of any statute, rule, regulation, judgment, decree, injunction or other order taken by the governmental authority of competent jurisdiction that prohibits the consummation of the transactions contemplated by the merger agreement, including the merger. Consequently, if a settlement or other resolution is not reached in any lawsuit that is filed or any regulatory proceeding and a claimant secures injunctive or other relief or a governmental authority issues an order or other directive restricting, prohibiting or making illegal the completion of the transactions contemplated by the merger agreement, including the merger, then such injunctive or other relief may prevent the merger from being completed in a timely manner or at all.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document contains or incorporates by reference a number of “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the financial conditions, results of operations, earnings outlook and prospects of United Bankshares, Community Bankers Trust and the potential combined company and may include statements for the period following the completion of the merger. You can find many of these statements by looking for words such as “plan,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “potential,” “possible” or other similar expressions which identify these forward-looking statements and appear in a number of places in this prospectus and proxy statement (and the documents to which you are referred in this prospectus and proxy statement) and include, but are not limited to, all statements relating directly or indirectly to the timing or likelihood of completing the merger to which this prospectus and proxy statement relates, the timing and amount of growth and cost savings realized following the merger, plans for future growth and other business development activities as well as capital expenditures, financing sources and the effects of regulation and competition, potential effects of not approving proposals discussed in this prospectus and proxy statement or not completing the merger, and all other statements regarding the intent, plans, beliefs or expectations of United Bankshares, Community Bankers Trust, or those of their respective directors or officers.
The forward-looking statements involve certain risks and uncertainties. The ability of either United Bankshares or Community Bankers Trust to predict results or the actual effects of its plans and strategies, or those of the combined company, is subject to inherent uncertainty. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include those set forth beginning on page 17 under “Risk Factors,” as well as, among others, the following:
Those discussed and identified in public filings with the SEC made by United Bankshares or Community Bankers Trust;
Fluctuations in the market price of United Bankshares common stock and the related effect on the market value of the merger consideration that Community Bankers Trust common shareholders will receive upon completion of the merger;
Business uncertainties and contractual restrictions while the merger is pending;
The possibility that the proposed merger does not close when expected or at all because required regulatory, shareholder or other approvals and conditions to closing are not received or satisfied on a timely basis or at all;
The terms of the proposed merger may need to be modified to satisfy such approvals or conditions;
The anticipated benefits from the proposed merger such as it being accretive to earnings and expanding United Bankshares’ geographic presence and synergies are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations (including changes to capital requirements) and their enforcement, and the degree of competition in the geographic and business areas in which the companies operate;
The ability to promptly and effectively integrate the businesses of United Bankshares and Community Bankers Trust;
Reputational risks and the reaction of the companies’ customers to the merger;
Diversion of management time on merger related issues;
Changes in asset quality and credit risk;
The inability to sustain revenue and earnings;
Changes in interest rates and capital markets;
Inflation;
Customer acceptance of United Bankshares products and services;
Customer borrowing, repayment, investment and deposit practices;
Customer disintermediation;
The introduction, withdrawal, success and timing of business initiatives;
Competitive conditions;
The impact, extent and timing of technological changes;
Changes in fiscal and monetary policies, including changes in tax laws, and their effects on markets and customers; and
Changes in regulations and other actions of the Federal Reserve and federal and state banking regulators, and legislative and regulatory actions and reforms, including those associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act and the federal regulations that make up the Volcker Rule, and the regulatory capital rules under Basel III.
Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document or the date of any document incorporated by reference in this document.
All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this document and attributable to United Bankshares or Community Bankers Trust or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this document. Except to the extent required by applicable law or regulation, United Bankshares and Community Bankers Trust undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.
EQUIVALENT PRO FORMA MARKET VALUE OF COMMON STOCK
United Bankshares common stock is traded on Nasdaq under the symbol “UBSI”. Community Bankers Trust common stock is traded on Nasdaq under the symbol “ESXB”. The closing sale price reported for United Bankshares common stock on June 2, 2021, the last trading date preceding the public announcement of the merger agreement, was $41.15 and the closing sale price reported for Community Bankers Trust common stock on such date was $9.20.
As of October 4, 2021, the last date prior to printing this prospectus and proxy statement for which it was practicable to obtain this information, there were approximately 8,708 registered holders of United Bankshares common stock and approximately 1,681 registered holders of Community Bankers Trust common stock.
The following table sets forth historical per share market values for United Bankshares common stock (i) on June 2, 2021, the last trading day prior to public announcement of the merger agreement, and (ii) on October 4, 2021, the most recent practicable date before the printing and mailing of this prospectus and proxy statement. The table also shows the equivalent pro forma market value of Community Bankers Trust common stock on those dates.
The equivalent pro forma market value of Community Bankers Trust common stock is obtained by multiplying the historical market price of United Bankshares common stock by the exchange ratio. Accordingly, the pro forma market value (i) on June 2, 2021 is determined by multiplying $41.15 by the exchange ratio of 0.3173 and (ii) on October 4, 2021 is determined by multiplying $36.89 by the exchange ratio of 0.3173.
The historical market prices represent the last sale prices on or before the dates indicated. The market price of United Bankshares common stock at the time of the merger may be higher or lower than the closing prices of United Bankshares common stock on the dates shown in the table and, therefore, the market value of the United Bankshares common stock that you receive may be higher or lower than the equivalent pro forma market value shown in the table.
Historical Market Price
United Bankshares | Community Bankers Trust | Community Bankers Trust Equivalent Pro Forma Market Value | ||||||||||
June 2, 2021 | $ | 41.15 | $ | 9.20 | $ | 13.06 | ||||||
October 4, 2021 | $ | 36.89 | $ | 11.48 | $ | 11.71 |
Once the merger is completed, there will be no further private or public market for Community Bankers Trust common stock.
The market prices of both United Bankshares common stock and Community Bankers Trust common stock will fluctuate prior to the merger. Community Bankers Trust shareholders should obtain current stock price quotations for United Bankshares common stock.
COMPARATIVE HISTORICAL AND PRO FORMA UNAUDITED SHARE DATA
We have summarized below historical, unaudited per share information for United Bankshares and Community Bankers Trust and additional information as if the companies had been combined for the periods shown, which we refer to as “pro forma” information.
The Community Bankers Trust pro forma equivalent per share amounts are calculated by multiplying the United Bankshares pro forma combined book value per share and net income per share by the exchange ratio of 0.3173 so that the per share amounts equate to the respective values for one share of Community Bankers Trust common stock.
We expect that both United Bankshares and Community Bankers Trust will incur merger and integration charges as a result of the merger. We also anticipate that the merger will provide the combined company with financial benefits that may include reduced operating expenses. The information set forth below, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, may not reflect all of these anticipated financial expenses and does not reflect all of these anticipated financial benefits or consider any potential impacts of current market conditions or the merger or revenues, expense efficiencies, asset dispositions, and share repurchases, among other factors, and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during the periods presented.
In addition, the information set forth below has been prepared based on preliminary estimates of merger consideration and fair values attributable to the merger, the actual amounts recorded for the merger may differ from the information presented. The estimation and allocations of merger consideration are subject to change pending further review of the fair value of the assets acquired and liabilities assumed and actual transaction costs. A final determination of fair value will be based on the actual net tangible and intangible assets and liabilities of Community Bankers Trust that will exist on the date of completion of the merger.
The information in the following table is based on, and you should read it together with, the historical financial information and the notes thereto for United Bankshares and Community Bankers Trust incorporated by reference into, or contained in, this prospectus and proxy statement.
Historical United Bankshares | Historical Community Bankers Trust | United Bankshares & Community Bankers Trust Proforma Combined | Proforma Equivalent Community Bankers Trust Share | |||||||||||||
Basic Earnings Per Common Share | ||||||||||||||||
For the year ended December 31, 2020 | $ | 2.40 | $ | 0.70 | $ | 2.33 | (1) | $ | 0.74 | (2) | ||||||
For the six months ended June 30, 2021 | $ | 1.56 | $ | 0.54 | $ | 1.58 | (1) | $ | 0.50 | (2) | ||||||
Diluted Earnings Per Common Share | ||||||||||||||||
For the year ended December 31, 2020 | $ | 2.40 | $ | 0.69 | $ | 2.33 | (1) | $ | 0.74 | (2) | ||||||
For the six months ended June 30, 2021 | $ | 1.56 | $ | 0.53 | $ | 1.57 | (1) | $ | 0.50 | (2) | ||||||
Cash Dividends Per Common Share | ||||||||||||||||
For the year ended December 31, 2020 | $ | 1.40 | $ | 0.20 | $ | 1.40 | (3) | $ | 0.44 | (2) | ||||||
For the six months ended June 30, 2021 | $ | 0.70 | $ | 0.12 | $ | 0.70 | (3) | $ | 0.22 | (2) | ||||||
Book Value Per Common Share | ||||||||||||||||
For the year ended December 31, 2020 | $ | 33.37 | $ | 7.64 | $ | 33.41 | (4) | $ | 10.60 | (2) | ||||||
For the six months ended June 30, 2021 | $ | 34.01 | $ | 8.01 | $ | 34.10 | (4) | $ | 10.82 | (2) |
May I attend
(1) | Pro forma earnings per common share are based on pro forma combined net income and pro forma combined shares outstanding at the end of the period. |
(2) | Calculated based on pro forma combined multiplied by the exchange ratio. |
(3) | Pro forma dividends per share represent United Bankshares’ historical dividends per share. |
(4) | Calculated based on pro forma combined equity and pro forma combined common shares outstanding at the end of period. |
This section contains information about the Annual Meeting?special meeting of Community Bankers Trust shareholders that has been called to consider and approve the merger agreement.
All shareholders are invited to attendTogether with this document, Community Bankers Trust is also sending you a notice of the meeting. Itspecial meeting and a form of proxy that is solicited by the Community Bankers Trust board of directors. The special meeting will be held on Friday, May 17, 2019, beginningNovember 16, 2021, at 11:10:00 a.m., local time, at the Deep Run 3 Building, 9954 Mayland Drive, Richmond, Virginia 23233.
Even ifThe purpose of the special meeting is to vote on:
(1) | the Merger Proposal; |
(2) | the Merger-Related Compensation Proposal; and |
(3) | the Adjournment Proposal. |
Each copy of this document mailed to record holders of Community Bankers Trust common stock is accompanied by a proxy card with instructions for voting. The Community Bankers Trust board of directors requests that you submit your proxy promptly, whether or not you plan to attend the Annual Meeting, please vote your proxy in advance through the internet, by telephone or by mail.
Who is entitled to vote?
meeting. If you are a shareholderhold your shares of the Company’sCommunity Bankers Trust common stock at the close of business on the Record Date of March 20, 2019,under your own name (also known as “record ownership”), you can vote. There were 22,158,979 shares of common stock outstanding and entitled to vote on that date. For each matter properly brought before the Annual Meeting, you have one vote for each share that you own.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
If your shares are registered directly in your name with the Company’s transfer agent, Continental Stock Transfer & Trust Company, you are considered, with respect to those shares, the “shareholder of record.” The Notice of Annual Meeting of Shareholders, this proxy statement and the 2018 Annual Report to Shareholders have been sent directly to you by the Company.
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name.” The Notice of Annual Meeting of Shareholders, this proxy statement and the 2018 Annual Report to Shareholders have been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, the “shareholder of record.” As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares using the voting instruction card included in the mailing or by following the instructions on that card for voting by telephone or through the internet.
How do I vote?
You may vote using anyone of the following methods:manners:
By proxy via mail by signing and returning the enclosed proxy card in the postage-paid envelope;
By proxy via the Internet at www.cstproxyvote.com and following the instructions;
By proxy via telephone at (866) 894-0536 on a touch-tone phone and following the recorded instructions; or
By attending the meeting and voting your shares in person.
A validAny vote by proxy if notcard, Internet or telephone may be revoked by you at any time before the meeting by giving written notice of such revocation to the corporate secretary, executing another proxy or voted otherwise, will be votedFORusing the election of the nominees for director named in this proxy statement,FOR the approvalInternet or telephone voting procedures as of a non-binding resolutiondate subsequent to endorse the Company’s executive compensation program,FOR the approval of the Company’s 2019 Stock Incentive Plan andFOR the ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for 2019.
If your shares are held in “street name,” do not follow the above instructions. Instead, follow the separate instructions provided by your broker, bankprior proxy card or other nominee.
Can I change my vote?
Internet or telephone vote. If you are a shareholder of record or have a legal proxy from a shareholder of record, you may also revoke your proxy or change your vote at any time before it is voted at the Annual Meeting by
If your shares are held in “street name” by your bank, broker or other nominee, you may revoke your proxy or change your vote only by following the separate instructions provided by your bank, broker or nominee.
To votevoting in person at the Annual Meeting,special meeting. Shareholders who vote via the Internet or by telephone need not mail their proxy cards and doing so will revoke any prior vote or proxy. Instructions on how to vote by telephone or by the Internet are included with your proxy card.
If you musthold your shares in “street name” through a bank, broker, nominee or other holder of record, you will receive a voting instruction form directly from them. Follow the instructions on the form they provide to have your shares voted by proxy. If you wish to attend the meeting and castvote in person, you must obtain a written proxy, executed in your votefavor, from the bank, broker, nominee or other holder of record to do so.
All shares represented by valid proxies that Community Bankers Trust receives through this solicitation and that are not revoked will be voted in accordance with your instructions on the proxy card or as instructed via the Internet or telephone, or with respect to shares beneficially held in “street name,” in accordance with the voting provisions establishedinstructions received from the appropriate bank, broker, nominee or other holder of record. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” each of the proposals described above.
Community Bankers Trust shareholders with shares represented by stock certificates should not send Community Bankers Trust stock certificates with their proxy cards. After the merger is completed, holders of Community Bankers Trust common stock with shares represented by stock certificates or held in book-entry form will be mailed a transmittal form with instructions on how to exchange their Community Bankers Trust stock certificates or book-entry shares for the Annual Meeting. Attendancemerger consideration.
Community Bankers Trust will bear the entire cost of soliciting proxies from its shareholders. In addition to solicitation of proxies by mail, proxies may also be solicited by Community Bankers Trust’s directors and employees personally, and by telephone, electronic transmission, facsimile transmission, or other means. No additional compensation will be paid to these individuals for proxy solicitation nor is it expected to result in more than a minimal cost. Community Bankers Trust may make arrangements directly with banks, brokerage houses, custodians, nominees and fiduciaries to forward solicitation material to the beneficial owners of Community Bankers Trust common stock held of record by them and to obtain authorization for the execution of proxies. Community Bankers Trust expects to reimburse these institutional holders for their reasonable expenses in connection with these activities. Community Bankers Trust has also made arrangements with Morrow Sodali LLC to assist it in soliciting proxies and has agreed to pay it approximately $17,500 for these services and reimburse certain out of pocket expenses.
The close of business on September 27, 2021 has been fixed as the record date for determining the Community Bankers Trust shareholders entitled to receive notice of and to vote at the Annual Meeting without voting in accordance with the voting procedures will not inspecial meeting. At that time, 22,464,593 shares of Community Bankers Trust common stock were outstanding and of itself revoke a proxy. If your bank, broker or other nominee holds your shares and you wantentitled to attend and vote your shares at the Annual Meeting, you must bring a legalspecial meeting, held by approximately 1,681 holders of record.
The presence, in person or by proxy, signed by your bank, broker or nominee toof the Annual Meeting.
What is a “quorum”?
A quorum consistsholders of a majority of the outstanding shares of the Company’sCommunity Bankers Trust common stock as of the Record Date, present, or represented by proxy, at the meeting. A quorumentitled to vote is necessary to conduct business at the Annual Meeting. Inspectors of election will determine the presence ofconstitute a quorum at the Annual Meeting. You are partspecial meeting. Abstentions and shares of the quorum if you have votedCommunity Bankers Trust common stock held of record by proxy. Shares for which the holder has abstained,a broker or withheld the proxies’ authority to vote, on a matter count as shares present at the meeting for purposes of determining a quorum. Shares held by brokersnominee that are not voted on any matter atwill be counted for the Annual Meeting will not be included inpurpose of determining whether a quorum is present.
Under the rules that govern brokers who are voting with respect to shares held in street name, brokers or other nominees have the discretion to vote such shares on routine matters, but not on non-routine matters. In the case of non-routine items, the broker or other nominee holding street name shares cannot vote the shares if it has not received voting instructions. These are considered to be “broker non-votes.” Since there are no routine items to be voted on at the special meeting, brokers or nominees holding shares of Community Bankers Trust common stock that do not receive voting instructions from the beneficial owners of such shares will not be able to return a proxy card with respect to such shares. As a result, these shares will not be considered present at the meeting.special meeting and will not count towards the satisfaction of a quorum.
As of the record date, directors and executive officers of Community Bankers Trust had the sole right to vote 609,677 shares of Community Bankers Trust common stock, or approximately 2.71% of the outstanding Community Bankers Trust common stock entitled to be voted at the special meeting. Community Bankers Trust currently expects that each of these individuals will vote their shares of Community Bankers Trust common stock in favor of the proposals to be presented at the special meeting. Community Bankers Trust directors have entered into support agreements that obligated each director to vote shares of Community Bankers Trust common stock over which each such director has sole voting and dispositive power for approval of the Merger Proposal. As of the close of business on September 27, 2021, the record date for the special meeting, shares constituting 2.32% of Community Bankers Trust common stock were subject to the support agreements.
How
If you are votes counted?a holder of Community Bankers Trust common stock and you submit a proxy in which you abstain from voting, the abstention will be counted toward a quorum at the special meeting, and it will have the same effect as a vote against the Merger Proposal, the Merger-Related Compensation Proposal and the Adjournment Proposal.
Broker non-votes will have no effect for determining whether the Merger Proposal, the Merger-Related Compensation Proposal or the Adjournment Proposal have been approved.
The electionAttending the Special Meeting
All holders of eachCommunity Bankers Trust common stock, including holders of record and shareholders who beneficially hold their stock through banks, brokers, nominees or any other holder of record, are invited to attend the special meeting. Shareholders of record on the record date can vote in person at the special meeting. If you beneficially hold your shares in “street name,” of record, you must obtain a written proxy executed in your favor from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote in person at the special meeting. If you plan to attend the special meeting, you must either hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership, and you must bring a form of personal photo identification with you in order to be admitted. Community Bankers Trust reserves the right to refuse admittance to anyone without proper proof of share ownership and without proper photo identification.
PROPOSALS TO BE CONSIDERED AT THE SPECIAL MEETING
APPROVAL OF THE MERGER AGREEMENT
Community Bankers Trust is asking its shareholders to approve the Merger Proposal. For a detailed discussion of the merger, including the terms and conditions of the merger agreement, see “The Merger Agreement,” beginning on page 63. As discussed in detail in the sections entitled “The Merger - Community Bankers Trust’s Reasons for directorthe Merger; Recommendation of the Board of Directors,” beginning on page 38, after careful consideration, the Community Bankers Trust board of directors determined that the terms of the merger agreement and the transactions contemplated thereby are in the best interests of Community Bankers Trust and the Community Bankers Trust board of directors unanimously approved the merger agreement. Accordingly, Community Bankers Trust’s board of directors unanimously recommends that Community Bankers Trust shareholders vote “FOR” the Merger Proposal.
Approval of the Merger Proposal requires the affirmative vote of the holders of a plurality of the shares of common stock voted in the election of directors. Thus, those nominees receiving the greatest number of votes cast will be elected. You may vote “for” or “withhold” for the election of directors. Shares held by brokers that are not voted in the election of directors will have no effect on the election of directors.
The advisory (non-binding) resolution to endorse the Company’s executive compensation program will be approved if holders of a majority of the shares represented in person or by proxy at the special meeting if a quorum is established. You are entitled to one vote for each share of Community Bankers Trust common stock you held as of the record date.
Because the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting is needed in order to proceed with the merger, an abstention will have the effect of a vote against the merger agreement. The Community Bankers Trust board of directors urges Community Bankers Trust shareholders to promptly vote by completing, dating and signing the accompanying proxy card and returning it promptly in the enclosed postage-paid envelope, calling the toll-free number listed on the Community Bankers Trust proxy card, accessing the Internet site listed on the Community Bankers Trust proxy card, or, if you hold your stock in “street name” through a bank, broker, nominee or other holder of record, following the voting instructions of your bank, broker, nominee or other holder of record.
If you return a properly executed proxy card but do not indicate instructions on your proxy card, your shares of Community Bankers Trust Common Stock represented by such proxy card will be voted “FOR” approval of the Merger Proposal.
Recommendation of the Community Bankers Trust Board of Directors
The Community Bankers Trust board of directors unanimously recommends that Community Bankers Trust shareholders vote “FOR” approval of the Merger Proposal. See “The Merger - Community Bankers Trust’s Reasons for the Merger; Recommendation of the Community Bankers Trust Board of Directors” on page 38 for a more detailed discussion of the Community Bankers Trust board of directors’ recommendation.
ADVISORY (NON-BINDING) VOTE ON CERTAIN MERGER-RELATED
COMPENSATION FOR COMMUNITY BANKERS TRUST NAMED EXECUTIVE OFFICERS
As required by Section 14A of the Securities Exchange Act of 1934, as amended, or the Exchange Act, Community Bankers Trust is providing its shareholders with the opportunity to approve, in a non-binding advisory vote, certain compensation that may become payable to its named executive officers in connection with
the merger, which is based on or related to the merger and the agreements and understandings concerning such compensation, by voting on the following resolution:
“RESOLVED, that the compensation that may be paid to the named executive officers of Community Bankers Trust in connection with or as a result of the merger, as disclosed in the section entitled “The Merger – Interests of Certain Community Bankers Trust Directors and Executive Officers in the Merger – Certain Compensation for Community Bankers Trust Named Executive Officers,” and the related table and narrative, is hereby APPROVED.”
Approval of the Merger-Related Compensation Proposal is not a condition to completion of the merger. The vote on this proposal is a vote separate and apart from the vote on the Merger Proposal. Because this proposal is advisory in nature only, a vote for or against approval will not be binding on either Community Bankers Trust or United Bankshares.
The compensation that is subject to this proposal is a contractual obligation of Community Bankers Trust and/or Essex Bank and of United Bankshares and United Bank as the successors thereto. Such compensation may be paid in connection with the merger, subject only to the conditions applicable thereto, even if shareholders fail to approve this proposal. If the merger is not completed, the Community Bankers Trust board of directors will consider the results of the vote in making future executive compensation decisions.
Approval of the Merger-Related Compensation Proposal requires the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting if a quorum is established. Abstentions will be counted toward a quorum at the special meeting, but will have the effect as a vote against this proposal.
If you return a properly executed proxy card but do not indicate instructions on your proxy card, your shares of Community Bankers Trust common stock represented by such proxy card will be voted “FOR” approval of the Merger-Related Compensation Proposal.
Recommendation of the Community Bankers Trust Board of Directors
The Community Bankers Trust board of directors unanimously recommends that Community Bankers Trust shareholders vote “FOR” approval of the Merger-Related Compensation Proposal.
APPROVAL OF THE ADJOURNMENT, POSTPONEMENT OR CONTINUANCE OF THE SPECIAL MEETING, IF NECESSARY, TO PERMIT FURTHER SOLICITATION OF PROXIES
If at the special meeting the number of shares of Community Bankers Trust common stock present in person or represented by proxy and voting in favor of the Merger Proposal is insufficient to approve such proposal, management may move to adjourn, postpone or continue the special meeting on one or more occasions in order to enable Community Bankers Trust to continue to solicit additional proxies in favor of such proposal; however, the special meeting may not be adjourned, postponed or continued to a date later than March 16, 2022. In that event, you will be asked to vote only upon the Adjournment Proposal, may be asked to vote on the Merger-Related Compensation Proposal and will not be asked to vote on the Merger Proposal at the special meeting.
In this proposal, Community Bankers Trust is asking the Community Bankers Trust shareholders to authorize the holder of any proxy solicited by its board of directors to grant to the Community Bankers Trust board of directors the authority to adjourn, postpone or continue the special meeting and any later adjournments.
If the Community Bankers Trust shareholders approve this proposal, Community Bankers Trust could adjourn, postpone or continue the special meeting, and any adjourned session of the special meeting on one or more occasions, to use the additional time to solicit proxies in favor of the Merger Proposal, including the solicitation of proxies from the shareholders that have previously voted against such proposal. Among other effects, approval of the Adjournment Proposal could mean that, even if proxies representing a sufficient number of votes against the approval of the Merger Proposal have been received, Community Bankers Trust could adjourn, postpone or continue the special meeting without a further shareholder vote on such proposal and seek to convince the holders of those shares to change their votes to vote in favor of such proposal.
Generally, if the special meeting is adjourned, no notice of the adjourned meeting is required to be given to shareholders, other than an announcement at the special meeting of the place, date and time to which the meeting is adjourned.
Approval of the Adjournment Proposal requires the affirmative vote of a majority of the shares represented in person or by proxy at the special meeting if a quorum is established. Abstentions will be counted toward a quorum at the special meeting, but will have the effect as a vote against this proposal.
If you return a properly executed proxy card but do not indicate instructions on your proxy card, your shares of Community Bankers Trust Common Stock represented by such proxy card will be voted “FOR” approval of the Adjournment Proposal.
Recommendation of the Community Bankers Trust Board of Directors
The Community Bankers Trust board of directors believes that if the number of shares of its common stock present in person or represented by proxy at the Annual Meeting votespecial meeting and voting in favor of the action.
The Community Bankers Trust Corporation 2019 Stock Incentive Plan will be approved if holders of a majorityapproval of the shares of common stock presentMerger Proposal is insufficient to approve such proposal, it is in person or represented by proxy at the Annual Meeting vote in favor of the action.
The ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm will be approved if holders of a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting vote in favor of the action.
Abstentions and broker non-votes will not be considered cast either for or against a matter. A broker non-vote occurs when a broker or other nominee who holds shares for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has not received instructions from the owner of the shares.
Will my shares be voted if I do not provide instructions to my broker?
If you are the beneficial owner of shares held in “street name” by a broker, the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. If you do not give instructions to the broker, the broker will be entitled to vote the shares with respect to “discretionary” items, but will not be permitted to vote the shares with respect to “non-discretionary” items (those shares are treated as “broker non-votes”).
The election of directors, the approval of an advisory resolution to endorse the Company’s executive compensation program and the approvalbest interests of the Community Bankers Trust Corporation 2019 Stock Incentive Plan are “non-discretionary” items.shareholders to enable the board of directors, for a limited period of time, to continue to seek to obtain a sufficient number of additional votes to approve such proposal. The ratificationCommunity Bankers Trust board of directors unanimously recommends that shareholders vote “FOR” the approval of the appointmentAdjournment Proposal.
The following summary describes certain aspects of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for 2019 is a “discretionary” item.
Your vote is important. Whether ormerger. This summary does not you planpurport to attend the meeting, please vote as soon as possible.
Who will count the vote?
The Company has engaged Continental Stock Transfer & Trust Company to serve as the inspector of elections for the Annual Meeting.
What does it mean if I get more than one proxy or voting instruction card?
If your shares are registered in more than one name or in more than one account, you will receive more than one card. Pleasebe complete and returnmay not contain all of the information about the merger that is important to you. Holders of Community Bankers Trust common stock should read carefully this prospectus and proxy or voting instruction cards thatstatement in its entirety, including appendices, for more detailed information concerning the merger and the merger agreement. In particular, you receive (or voteare directed to the merger agreement, including the exhibits thereto, copies of which are attached as Appendix A and are incorporated in this prospectus and proxy statement by telephone or through the internet allreference.
Background of the shares on all of the proxy or voting instruction cards received) to ensure that all of your shares are voted.
The Company is soliciting the proxies associated with this proxy statement and will bear all costsboard of the solicitation. The Company may solicit proxies by mail, telephone, email, internet, facsimile, press releases and in person. Solicitations may be made by directors, officers and employees of the Company, none of whom will receive additional compensation for such solicitations. The Company will request banks, brokerage houses and other custodians, nominees and fiduciaries to forward all of its solicitation materials to the beneficial owners of the shares that they hold of record. The Company will reimburse these record holders for customary clerical and mailing expenses incurred by them in forwarding these materials to customers.
BENEFICIAL OWNERSHIP OF SECURITIES
Directors and Executive Officers
The following table sets forth information regarding beneficial ownership of the Company’s common stock, as of March 20, 2019 (which is the Record Date for the Annual Meeting), for each director, each of the individuals named in the Summary Compensation Table in the “Executive Compensation” section on page 28 below (who are referred to as the “named executive officers”) and the Company’s current directors and executive officers as a group.
Name | Shares of Common Stock (2) | Option Shares (3) | Total Shares of Common Stock Beneficially Owned | Percent Class | ||||||||||||
NAMED EXECUTIVE OFFICERS | ||||||||||||||||
Rex L. Smith, III (1) | 53,250 | 222,500 | 275,750 | * | ||||||||||||
Bruce E. Thomas | 29,696 | 38,750 | 68,446 | * | ||||||||||||
Jeff R. Cantrell | 15,150 | 80,000 | 95,150 | * | ||||||||||||
Patricia M. Davis | 1,200 | 80,000 | 81,200 | * | ||||||||||||
John M. Oakey, III | 18,000 | 125,000 | 143,000 | * | ||||||||||||
DIRECTORS | ||||||||||||||||
Gerald F. Barber | 27,684 | — | 27,684 | * | ||||||||||||
Richard F. Bozard | 144,903 | — | 144,903 | * | ||||||||||||
Hugh M. Fain, III | 6,009 | 6,009 | * | |||||||||||||
William E. Hardy | 22,416 | — | 22,416 | * | ||||||||||||
Troy A. Peery, Jr. | 76,193 | — | 76,193 | * | ||||||||||||
Eugene S. Putnam, Jr. | 100,820 | — | 100,820 | * | ||||||||||||
S. Waite Rawls III | 41,229 | — | 41,229 | * | ||||||||||||
John C. Watkins | 111,557 | — | 111,557 | * | ||||||||||||
Oliver L. Way | 17,355 | 17,355 | * | |||||||||||||
Robin Traywick Williams | 68,840 | — | 68,840 | * | ||||||||||||
All current directors and executive officers as a group (16 persons) | 750,029 | 651,250 | 1,401,279 | 6.1 |
Principal Shareholders
The following table contains information regardingmanagement of Community Bankers Trust has considered and discussed many strategic opportunities over the persons or groups that the Company knowsyears. These opportunities have included business combinations, operational enhancements, and improvements related to beneficially own more than five percentCommunity Bankers Trust’s use of the Company’s common stock as of March 20, 2019.
Shares of Common Stock Beneficially Owned | ||||||||
Name and Address | Number | Percent of Class | ||||||
Castine Capital Management, LLC (1) | 1,982,312 | 8.9 | ||||||
Castine Management GP, LLC | ||||||||
Castine Partners II, L.P. | ||||||||
Paul Magidson | ||||||||
One Financial Center, 24th Floor | ||||||||
Boston, Massachusetts 02111 | ||||||||
Wellington Management Group LLP (2) | 1,345,327 | 6.1 | ||||||
Wellington Group Holdings LLP | ||||||||
Wellington Investment Advisors Holdings LLP | ||||||||
Wellington Management Company LLP | ||||||||
280 Congress Street | ||||||||
Boston, Massachusetts 02210 | ||||||||
Maltese Capital Management LLC (3) | 1,331,400 | 6.0 | ||||||
Terry Maltese | ||||||||
150 East 52nd Street, 30th Floor | ||||||||
New York, New York 10022 |
Stock Ownership Guidelines
The Company has adopted stock ownership guidelinescapital through, for its executive officers. The ownership levels under these guidelines are 50,000 shares for the Chief Executive Officerexample, dividends and 25,000 shares for each of the Company’s other executive officers. The guidelines provide that each of the officers should achieve his or her designated level within five years from the adoption date of the guidelines. They further provide that, if the officer’s ownership is not at the designated level, the officer is required to retain all sharesrepurchases of common stock, owned, including shares that are received as the result of the exercise of stock options or vesting of restricted stock. The guidelines permit the officer, however,all with a view to sell a portion of such shares to cover, as the case may be, the exercise price and income tax liability upon the exercise of stock options or the income tax liability upon the vesting of restricted stock.
Shares of common stock to be included in determining compliance with the designated level include shares held individually and held jointly with spouse, but do not include shares that are held in any other form of beneficial ownership, such as in the capacity as a trustee or custodian.
increase long-term value for its shareholders.
The Nominatingtypes of business combinations considered have included acquiring smaller financial institutions or other companies that offer ancillary banking products and Governance Committeeservices, entering into mergers of the Company’s Board of Directors oversees,equals with other financial institutions, or being acquired by a larger financial institution. The Community Bankers Trust board’s
discussions have occurred generally through annual strategic retreats and thus monitorsmore frequently when opportunities arise at its monthly meetings and enforces compliance with, the stock ownership guidelines. The Company has not adopted formal guidelines with respect to stock ownership by its directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’s executive officers, directors and persons who own more than 10%through special meetings of its common stockStrategic Planning Committee. The Community Bankers Trust board created the Strategic Planning Committee in 2014 to file reports of ownership and changes in ownership on Forms 3, 4 and 5assist it with the Securities and Exchange Commission. Executive officers, directors and greater-than-10% shareholders are required by regulation to furnish the Company with copies of all Forms 3, 4 and 5 that they file.
Based on the Company’s review of the copies of those forms, and any amendments that it has received, and written representations from its executive officers and directors, the Company believes that all executive officers, directors and beneficial owners of more than 10% of its common stock complied with all of the filing requirements applicable to them with respect to transactions during the year ended December 31, 2018 except as set forth as follows. A Form 4 for Mr. Bozard was inadvertently not filed for each of four purchases of the Company’s common stock from January 2018 to October 2018. Such purchases, representing 2,662 shares of the Company’s common stock, were made by means of funds transfers, as directed by a prior automatic election request, in Mr. Bozard’s account with the Company’s non-qualified deferred compensation plan administered by the Virginia Bankers Association. A Form 4 for Mr. Hardy was filed late with respect to the purchase of 500 shares of the Company’s common stock in August 2018. A Form 4 for Mr. Putnam was filed late with respect to the purchase by his spouse of 1,200 shares of the Company’s common stock in August 2018. A Form 4 for Mr. Way was filed late with respect to the purchase of 2,100 shares of the Company’s common stock in August 2018. A Form 4 for William E. Saunders, Jr. was filed late with respect to a stock option exercise and the related sale of 12,000 shares of the Company’s common stock in May 2018.
THE BOARD OF DIRECTORS
General
The business and affairs of the Company and its subsidiary Essex Bank (the “Bank”) are managed under the direction of the Board of Directors in accordance with the Virginia Stock Corporation Act and the Company’s Articles of Incorporation and Bylaws, as amended to date. Members of the Board are kept informed of the Company’s business through discussions with the President and Chief Executive Officer and other officers, by reviewing materials provided to them and by participating in meetings of the Board of Directors and its committees.
Director Independence
The Company’s Board of Directors has determined that the following 10 of its 11 members are independent as defined by the listing standards of the Nasdaq Stock Market: Gerald F. Barber, Richard F. Bozard, Hugh M. Fain, III, William E. Hardy, Troy A. Peery, Jr., Eugene S. Putnam, Jr., S. Waite Rawls III, John C. Watkins, Oliver L. Way and Robin Traywick Williams. In reaching this conclusion, the Board of Directors considered whether the Company and its subsidiaries conduct business with companies of which certain members of the Board of Directors or members of their immediate families are or were directors or officers. The Board specifically considered the relationship between the Bank and the law firm with which Mr. Fain is affiliated to determine he was independent under the listing standards of the Nasdaq Stock Market. The aggregate amount that Mr. Fain’s firm received from the Bank for legal services in 2018 was $78,735, most of which were real-estate related closing fees paid by the Bank’s customers. The Board did not identify any other relationships, other than banking relationships.
P. Emerson Hughes, Jr., who served as a director until his retirement from the Board on May 18, 2018, was also determined to be independent during 2018.
See the “Certain Relationships and Related Transactions” section on page 36 for additional information on certain banking transactions with members of the Company’s Board of Directors.
Leadership Structure and Risk Oversight
To date, the Company has chosen not to combine the positions of the Chairman of the Board of Directors and the Chief Executive Officer. The Company believes that its leadership structure is appropriate because, by having an outside independent Chairman, there exists an improved degree of independence and balanced oversight of the management of the Board’s functions and its decision-making processes, including those processes relating to the maintenance of effective risk management programs. The Chief Executive Officer makes monthly reports to the Board, often at the suggestion of the Chairman of the Board or other directors, and he explains in detail to the Board the reasons for certain recommendations of the Company’s management.
The Board of Directors is responsible for setting an appropriate culture of compliance within the organization, for establishing clear policies regarding the management of key risks and for ensuring that these policies are adhered to in practice. The risks that are an inherent part of the Company’s business and operations include credit risk, market risk, operational risk, liquidity risk, fiduciary risk, regulatory risk, information security risk (including cyber risk), legal risk and reputational risk. The Board must have an appropriate understanding of the types of risks to which the organization is exposed, and the Board must ensure that the organization’s management is fully capable, qualified and properly motivated to manage the risks arising from the organization’s business activities in a manner that is consistent with the Board’s expectations. Likewise, management is responsible for communicating and reinforcing the compliance culture that the Board has established and for implementing measures to promote the culture throughout the organization.
The Audit Committee of the Board of Directors is responsible for overseeing the Company’s risk management function on behalf of the Board. In carrying out this responsibility, the Audit Committee works closely with the Company’s Chief Risk Officer and Chief Internal Auditor and other members of the Company’s risk management and internal audit teams. The Audit Committee meets regularly with these individuals and receives an overview of findings from various risk management initiatives, including the Company’s enterprise risk management program, internal audits, Sarbanes-Oxley reports regarding internal controls over financial reporting and other regulatory compliance reports. The Company’s Chief Risk Officer, in particular, provides a comprehensive report to the Audit Committee regarding the Company’s key risks. While the Audit Committee has primary responsibility for overseeing risk management, the entire Board of Directors is actively involved in overseeing this function for the Company as, on at least a quarterly basis, the Board receives a report from the Audit Committee’s chairman and discusses the risks that the Company is facing. These risks are also discussed with members of management.
Other committees of the Board of Directors consider the risks within their areas of responsibility. For example, the Compensation Committee considers the risks that may be inherent in the Company’s compensation programs for both executive officers and other employees. For additional information regarding the Compensation Committee, see the “Executive Compensation” section beginning on page 20 of this proxy statement.
The Board of Directors maintains an effective risk management program to address oversight, control and supervision of the Bank’s management, major operations and activities. With a focus on implementing cost-effective improvements to its risk management systems and to the other areas where improvements are needed, the Board of Directors and the management team are committed to continuous improvement and strengthening of the Company’s governance, risk management and control practices. As noted above, the Board of Directors and its committees regularly review and discuss risk management issues with management at each of their meetings.
Code of Ethics
The Company’s Board of Directors has approved a Code of Business Conduct and Ethics for directors, officers and all employees of the Company and its subsidiaries, including the Company’s principal executive officer, principal financial officer and principal accounting officer. A copy of the Code of Business Conduct and Ethics is available on the “Corporate Overview – Corporate Governance” page of the Company’s internet website atwww.cbtrustcorp.com.
Board and Committee Meeting Attendance
There were 13 meetings of the Board of Directors in 2018. Each director attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings of committees of which the director was a member in 2018.
Independent Directors Meetings
Non-employee directors meet periodically in executive sessions before and after regularly scheduled Board meetings.
Committees of the Board
The Board of Directors has standing audit, compensation and nominating committees.
Audit Committee
The Audit Committee assists the Board in the fulfillment of its oversight responsibilities with respect to the completenessanalysis, discussion and accuracyreview of key strategic decisions at times outside of the Company’sboard’s annual strategic retreat. The members of the Strategic Planning Committee during consideration of the proposed merger with United were four independent directors, Gerald F. Barber, Hugh M. Fain, III, Eugene S. Putnam, Jr. and John C. Watkins, and Rex L. Smith, III, Community Bankers Trust’s president and chief executive officer. Ira C. Harris joined the Strategic Planning Committee effective upon the retirement of Mr. Watkins from the board on May 21, 2021.
At all of these strategic and other meetings, Mr. Smith communicates all contacts that he has made with or received from other companies, financial reportingadvisors and other interested parties. The strategic retreats have included representatives of various advisors in the financial institution industry with which Community Bankers Trust has had relationships, and the adequacypresentations and effectivenessdiscussions have included both projected deal prices that Community Bankers Trust could pay and various target financial institutions might accept, and projected deal prices that larger financial institutions could pay for Community Bankers Trust. Community Bankers Trust has pursued acquisitions of other financial institutions, but has not been successful in offering attractive enough price and deal terms, through either mutually negotiated or auction-run processes, to acquire another financial institution, and no other financial institution had previously offered an attractive enough price and deal terms to Community Bankers Trust that was at a level that matched or exceeded what the Community Bankers Trust board believed would be in the best interests of shareholders.
In late 2019, the chief executive officer of an out-of-state and larger financial institution, which we refer to as Company A, contacted Mr. Smith to see it there was interest in discussing a possible merger between Community Bankers Trust and Company A. Discussions between these individuals continued and remained preliminary into 2020. As these discussions progressed, the Community Bankers Trust board determined that it was in the best interests of Community Bankers Trust to formally engage a financial advisor in order to pursue more aggressively various business combination opportunities. In February 2020, the Community Bankers Trust board met with representatives from each of Piper Sandler & Co. and one other financial advisor, both nationally known and experienced investment banking firms focused on financial institutions, and approved the engagement with Piper Sandler.
Due to the impact of the COVID-19 pandemic increasing significantly in March 2020, Mr. Smith and the chief executive officer of Company A suspended their discussions. In addition, Community Bankers Trust and Piper Sandler similarly delayed their formal engagement, but Mr. Smith and representatives of Piper Sandler maintained regular discussions throughout the ensuing months with respect to business combination opportunities that were and could be available to Community Bankers Trust, whether an acquisition, a merger of equals or a sale of Community Bankers Trust.
In early March 2021, the chief executive officer of Company A reached back out to Mr. Smith to resume discussions about a potential business combination, and they met in person. At the same time, Company A’s financial advisor provided Piper Sandler with a range of pricing of $11.00 to $12.00 for each share of Community Bankers Trust’s common stock with 100% stock consideration for such a combination. The Community Bankers Trust board’s Strategic Planning Committee met on March 19, 2021 to review Company A’s renewed interest and determine next steps. The Committee received a presentation from the representatives of Piper Sandler that included a comparison of projected purchase prices and other analysis with respect to a number of potential acquirers, including Company A, the financial metrics for an illustrative offer price range and key assumptions for a merger with Company A and the variable factors that could affect the actual value that other potential acquirers could offer. The Committee asked Piper Sandler to engage in an informal market check to determine the value of Community Bankers Trust in order for the Committee to adequately consider the range of pricing generally. On March 31, 2021, Community Bankers Trust and Piper Sander signed a formal engagement letter.
During the weeks of April 5 and April 12, 2021, Piper Sandler engaged in its market check exercise and contacted four larger financial institutions (which included Company A and United Bankshares) that were most likely to be interested in a transaction involving Community Bankers Trust in the current market environment, that would be in a position to pay a price at or higher than what Community Bankers Trust’s board believed it could reasonably achieve as a stand-alone company and that had been identified in past strategic meetings as desirable acquirers for Community Bankers Trust. The two financial institutions other than United Bankshares and Company A ultimately declined to submit indications of interest in the market check due to timing considerations. Mr. Smith provided a status report of the market check to the Community Bankers Trust board at its monthly meeting on April 16, 2021.
On April 19, 2021, Mr. Smith met in person with the chief executive officer of Company A to discuss further the two companies’ interest in a business combination and next steps. On April 20, 2021, Mr. Smith met in person with Richard M. Adams, Jr., United Bankshares’ president, and James J. Consagra, Jr., United Bankshares’ executive vice president and chief operating officer, to discuss the two companies and the potential for a future partnership as a follow-up to the market check inquiry that United Bankshares had received.
On April 22, 2021, the chief executive officer of Company A sent Mr. Smith a short informal indication of interest proposing a price of $12.00 per share for Community Bankers Trust’s common stock and a request for a 60-day exclusivity agreement. The Strategic Planning Committee met on April 23, 2021 to discuss the current status of the market check and to review preliminarily Company A’s indication of interest. The Committee did not set any immediate next steps at that meeting.
On April 30, 2021, United Bankshares sent Community Bankers Trust, through Piper Sandler, a formal indication of interest, including implied pricing of $12.50 per share for Community Bankers Trust’s common stock in an all-stock transaction and specific key terms for a transaction. The indication of interest proposed that the definitive merger agreement would include a fixed exchange ratio to be determined based upon a trailing 10-trading day volume-weighted average price for shares of United Bankshares’ common stock on the last trading day prior to the date of a merger announcement. The terms also proposed that Mr. Smith would serve as a regional president for the combined company. United Bankshares’ indication of interest did not impose any exclusivity requirement on Community Bankers Trust.
On May 3, 2021, the Strategic Planning Committee met to review and discuss both indications of interest and their strengths and weaknesses and to prepare for a meeting with representatives of Piper Sandler. On each of May 4, 2021 and May 5, 2021, the Committee met with representatives of Piper Sandler to review and discuss further the two indications of interest and next steps. The representatives of Piper Sandler summarized the market check process, and the Committee discussed the various options for Community Bankers Trust, including instructing Piper Sandler to solicit interest from additional financial institutions, responding to both potential acquirers and declining interest in moving forward with a transaction, responding to both potential acquirers and asking for due diligence, and responding to both potential acquirers and requesting better offers. The representatives of Piper Sandler presented and reviewed an analysis of the preliminary indications of interest, including a preliminary comparison of the financial metrics of the potential business combinations. They explained certain terms that the United Bankshares offer included, and they noted that both indications of interests compared generally favorably to merger and acquisition transactions involving financial institutions that had been announced since the beginning of 2021. The Committee discussed various matters, including the strength of the exchange ratios when comparing cost savings versus earnings streams and the timing of a transaction in light of the current outlook for markets and the financial industry. The representatives of Piper Sandler also reviewed a stock sensitivity analysis for the past four months and projections for a transaction with each potential acquirer. They also reviewed an overview of a combined company for each interested potential acquirer, including market maps, and a net present value analysis of Community Bankers Trust. The Committee discussed Community Bankers Trust’s value, how much a buyer could pay, and the strengths and weaknesses of each potential acquirer. The Committee asked Piper Sandler to go back and ask each potential acquirer for its best offer on both price and other terms. Piper Sandler subsequently reached out to each of United Bankshares and Company A.
On May 10, 2021, United Bankshares sent Community Bankers Trust, through Piper Sandler, an updated formal indication of interest that reflected updated implied pricing of $13.00 per share for Community Bankers Trust’s common stock and the other unchanged key terms for a transaction. After being contacted by Piper Sandler, Company A did not update its indication of interest with implied pricing of $12.00 per share and requested that Mr. Smith reach back out if Community Bankers Trust remained interested in a transaction. No further discussions between Company A and Community Bankers Trust occurred.
On May 13, 2021, the Strategic Planning Committee met with management and the representatives of Piper Sandler to review the strengths and weaknesses of each potential acquirer and potential timing of next steps. The representatives of Piper Sander reviewed an updated analysis of the preliminary indications of interest and a preliminary comparison of the financial metrics of the potential business combinations, including updates to the United Bankshares offer based on the increased pricing. They also reviewed a new comparison of key financial metrics with respect to each potential acquirer and a new summary of historical earnings and balance sheet growth for each potential acquirer. The Committee discussed various matters, including projected growth rates for Community Bankers Trust based on organic growth as compared to inorganic growth, the status of other acquisition opportunities for Community Bankers Trust, the type of community bank that each potential acquirer is, the deal term with respect to Mr. Smith serving as a regional president of the combined company, timing of due diligence and total shareholder return. The Committee determined to recommend to the Community Bankers Trust board moving forward with United Bankshares in light of the proposed terms of its indication of interest and other corporate strengths.
On May 14, 2021, the Community Bankers Trust board held a special meeting to discuss in depth the two indications of interest. Management and the representatives from Piper Sandler reviewed with the Community Bankers Trust board the developments that had taken place to date. The representatives from Piper Sandler presented an analysis and review of the indications of interest. They reviewed a net present value analysis of Community Bankers Trust, and the Community Bankers Trust board noted the meaningful change needed internally in order to reach the value that has been offered for Community Bankers Trust. The Community Bankers Trust board also discussed the multiples and the peer groups used in the analysis and the financial metrics of merger and acquisition transactions that have been announced since the onset of the pandemic. The representatives of Piper Sandler reviewed each metric from these transactions, as compared to the offer from United Bankshares, and they noted that every transaction has different dynamics. The Community Bankers Trust board discussed the advantages and disadvantages of Community Bankers Trust staying independent. The Community Bankers Trust board discussed a comparison of a value stock compared to a growth stock for the potential acquirers, expected future loan and operational strategies, the nature of the challenge for Community Bankers Trust to grow organically, certain intangibles of a community bank and the impact of a merger generally and on stock price, a comparison of the potential acquirers, future merger and acquisition opportunities for Community Bankers Trust and the timing of a transaction in light of Community Bankers Trust’s future potential. Management discussed its view of the operational and other strategies and their related challenges and key strategies for moving forward, including holding net interest margin and continuing growth. The Community Bankers Trust board discussed a number of matters, including Community Bankers Trust’s efforts to acquire in strategic markets and related difficulties in doing so, Community Bankers Trust’s creation of good value to date combined with the current presence of interested buyers, the fit of Community Bankers Trust and each potential acquirer culturally and geographically, the difficulty in obtaining the needed level of growth organically, the potential acquirers’ investment in the community and the ability of Community Bankers Trust to keep up with an ever-changing delivery platform in the banking industry. The Community Bankers Trust board approved moving forward with a potential all-stock merger transaction with United Bankshares with an implied value of $13.00 per share, subject to continued due diligence by both parties, negotiation of a definitive merger agreement, and agreement between Mr. Smith and United Bankshares regarding his employment with the combined company.
On May 17, 2021, United Bankshares delivered an initial due diligence review list to Community Bankers Trust. During the period through June 2, 2021, representatives of United Bankshares and Community Bankers Trust, with the assistance of their respective financial and operating controls. The primary purposelegal advisors, communicated by phone to review
business, financial and other information regarding each company. During these meetings, members of management of each of the Audit Committeecompanies, with the assistance of their advisors, engaged in a series of discussions and asked and answered questions regarding each company’s respective businesses.
On May 18, 2021, United Bankshares delivered a draft of a proposed definitive agreement containing the proposed complete terms of the transaction. During the period through June 2, 2021, the parties and their legal counsel exchanged drafts and negotiated changes to the draft merger agreement to resolve all open issues and to reach a final definitive agreement. During this time, management of the parties and their respective financial advisors also provided drafts of their respective disclosure schedules to the merger agreement and discussed other aspects of the proposed transaction and merger integration issues. United Bankshares also negotiated the terms of the employment agreement to be entered into between United Bankshares and Mr. Smith, to be effective upon the consummation of the proposed merger.
On May 27, 2021, the Community Bankers Trust board held a special meeting to discuss the current status of the transaction and received preliminary reports from management, Piper Sandler and Williams Mullen, Community Bankers Trust’s outside legal counsel. Management discussed the current status of United Bankshares’ due diligence of the Community Bankers Trust and Community Bankers Trust’s reverse due diligence of United Bankshares. The Community Bankers Trust board asked for additional information about United Bankshares as part of that process. Management discussed the current negotiations and the status of the proposed merger agreement, the current structure of the exchange ratio for the all-stock deal, the terms of Mr. Smith’s employment arrangement with the combined company and the preparation of disclosure schedules that provided additional agreements and information with respect to compensation and other employee-related matters. The Community Bankers Trust board discussed the merger agreement and asked for additional negotiation of certain key terms. Management and the Community Bankers Trust board discussed timing and next steps, which would include the completion and resolution of due diligence and the merger agreement and formal approval from the Community Bankers Trust board.
The United Bankshares board of directors approved the merger early in the afternoon of June 2, 2021.
On the afternoon of June 2, 2021, the Community Bankers Trust board held a special meeting to consider the terms of the proposed merger with United Bankshares. At the meeting, representatives of Piper Sandler reviewed and discussed with the Community Bankers Trust board its financial analyses of Community Bankers Trust, United Bankshares and the proposed merger. This analysis included the fixed exchange ratio of 0.3173. Piper Sandler rendered its oral opinion to the Community Bankers Trust board, which was subsequently confirmed in writing by delivery of Piper Sandler’s written opinion dated June 2, 2021, to the effect that, as of June 2, 2021 and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of Community Bankers Trust’s common stock.
Representatives of Williams Mullen also were present at the meeting and discussed with the Community Bankers Trust board the legal standards applicable to its decisions and actions with respect to its consideration of the proposed merger. They reviewed in detail the proposed merger agreement and related transaction documents, copies of which were delivered to each director in advance of the meeting. Following extensive review, discussion and consideration of the presentations from Piper Sandler and Williams Mullen, and after considering the proposed terms of the merger agreement and other transaction documents, the Community Bankers Trust board unanimously voted to approve the merger, approve and adopt the merger agreement and directed Mr. Smith to finalize and execute a definitive merger agreement on the terms presented at the meeting.
United Bankshares and Community Bankers Trust executed the merger agreement the evening of June 2, 2021 and publicly announced the transaction on June 3, 2021 in a press release that United Bankshares and Community Bankers Trust jointly issued.
Community Bankers Trust’s Reasons for the Merger; Recommendation of the Community Bankers Trust Board of Directors
After careful consideration, Community Bankers Trust’s board of directors, at a meeting held on June 2, 2021, unanimously determined that the merger agreement and the transactions contemplated thereby to be fair and in the best interest of Community Bankers Trust and its shareholders. Accordingly, Community Bankers Trust’s board of directors adopted and approved the merger agreement and unanimously recommends that Community Bankers Trust’s shareholders vote “FOR” the approval of the merger agreement.
In evaluating the merger agreement and reaching its decision to adopt and approve the merger agreement and recommend that Community Bankers Trust’s shareholders approve the merger agreement, Community Bankers Trust’s board consulted with Community Bankers Trust’s management, as well as its outside legal and financial advisors, and considered a number of factors, including the following material factors (not in any relative order of importance):
the board’s knowledge and understanding of Community Bankers Trust’s business, operations, financial condition, asset quality, earnings and prospects, and of United Bankshares’ business, operations, financial condition, asset quality, earnings and prospects, taking into account the information shared by United Bankshares’ officers and information and analysis provided by Community Bankers Trust’s financial advisors;
the board’s understanding of United Bankshares’ commitment to enhancing its strategic position in Community Bankers Trust’s market area, its prospects for the future and its projected financial results, and the Community Bankers Trust board’s belief that the combined enterprise would benefit from United Bankshares’ ability to take advantage of economies of scale and grow in the current economic environment;
Community Bankers Trust’s earnings track record and the market performance of its common stock;
the ability of Community Bankers Trust’s shareholders to benefit from United Bankshares’ potential long-term stock value since it is more likely that the combined entity will have superior future earnings and prospects compared to provideCommunity Bankers Trust’s earnings and prospects on an independent basis due to greater operating efficiencies and objective oversightbetter penetration of commercial and consumer markets;
the perceived ability of United Bankshares to complete a merger transaction from a financial and regulatory perspective, including its prior history of successful merger transactions;
the financial and other terms of the merger agreement, including the amount and nature of the consideration proposed to be paid, which Community Bankers Trust’s board reviewed with its outside financial and legal advisors, including:
○ | Community Bankers Trust’s ability, under certain circumstances specified in and prior to the time Community Bankers Trust’s shareholders approve the merger agreement (i) to provide non-public information in response to a written acquisition proposal from a third party and (ii) participate in discussions or negotiations with a third party making such proposal, if (A) the board concludes in good faith, after consultation with and based upon the advice of outside legal counsel, that the failure to take such actions would be reasonably likely to constitute a breach ofits fiduciary duties to its shareholders under applicable law, (B) before taking such actions, Community Bankers Trust receives an executed confidentiality agreement providing for reasonable protection of confidential information, and (C) the board concludes in good faith, after consultation with its outside legal counsel and financial advisors, that the acquisition proposal constitutes or is reasonably likely to result in a superior proposal; |
○ | the fact that the outside date for completing the merger under the merger agreement allows for sufficient time to complete the merger; |
○ | the board’s understanding that the proposed merger with United Bankshares will generally be a tax-free transaction to Community Bankers Trust’s shareholders with respect to United Bankshares common stock received by virtue of the merger; |
○ | the level of effort that United Bankshares must use under the merger agreement to obtain required regulatory approvals, and the prospects for such approvals being obtained in a timely fashion and without the imposition of any adverse conditions; |
the board’s review of the potential costs associated with executing the merger agreement, including change in control, severance and related costs, as well as estimated advisor fees, which the board concluded were reasonable and would not affect the advice from, or the work performed by senior management of Community Bankers Trust or Community Bankers Trust’s financial advisor in connection with the evaluation of the merger and the merger agreement by Community Bankers Trust’s board;
the complementary aspects of the Community Bankers Trust and United Bankshares businesses, including customer focus, geographic coverage, business orientation and compatibility of the companies’ management operating styles;
the potential expense-saving and revenue-enhancing opportunities in connection with the merger, the related potential impact on the combined company’s earnings and the fact that the stock form of merger consideration would allow former Community Bankers Trust shareholders to participate in the potential future stock price value and higher dividends as United Bankshares shareholders;
the anticipated effect of the acquisition on Community Bankers Trust’s retained employees and the terms of severance for employees who would not be retained;
the long-term and short-term interests of Community Bankers Trust and its shareholders, and the interests of Community Bankers Trust’s employees, customers, creditors and suppliers, and the community and societal considerations of the communities in which Community Bankers Trust maintains offices;
the financial analyses provided by Piper Sandler, Community Bankers Trust’s financial advisor, regarding the merger, and its opinion, delivered to Community Bankers Trust’s board on June 2, 2021, to the effect that, as of that date, the exchange ratio under the terms of the merger agreement was fair, from a financial point of view, to holders of Community Bankers Trust common stock;
the board’s knowledge of the current environment in the financial services industry, including national, regional and local economic conditions, continued industry consolidation, increased regulatory burdens, evolving trends in technology and increasing nationwide and global competition, the current financial market conditions, the current environment for community banks, particularly in Virginia and Maryland, and the likely effects of these factors on Community Bankers Trust’s and the combined company’s potential growth, development, productivity, profitability and strategic options, and the historical prices of Community Bankers Trust and United Bankshares common shares;
the board’s knowledge of Community Bankers Trust’s prospects as an independent entity, including challenges relating to increasing regulatory burdens and both the costs associated with them and their impact on Community Bankers Trust’s financial results, increasing overhead expenses, such as technology costs to mitigate cyber security threats, vulnerabilities and evolving threats to physical and information security in the financial services industry, the increasing need to create additional efficiencies in the current and prolonged interest rate environment, and business continuity issues surrounding the current and possible other pandemic events;
the board’s knowledge of the strategic alternatives available to Community Bankers Trust, including the challenges for organic growth by a financial institution of Community Bankers Trust’s size; and
the board’s belief that the merger is more favorable to Community Bankers Trust’s shareholders than the alternatives to the merger, which belief was formed based on the careful review undertaken by
Community Bankers Trust’s board of directors, with the assistance of its management and outside legal and financial advisors. |
Community Bankers Trust’s board also considered potential risks and a variety of potential negative factors in connection with its deliberations concerning the merger agreement and the merger, including the following material factors (not in any relative order of importance):
the fact that, while Community Bankers Trust expects that the merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to complete the merger agreement will be satisfied, including the risk that certain regulatory approvals, the receipt of which are conditions to the consummation of the merger, might not be obtained, and, as a result, the merger may not be consummated;
the restrictions on the conduct of Community Bankers Trust’s business prior to the completion of the merger, which are customary for public company merger agreements involving financial institutions, but which, subject to specific exceptions, could delay or prevent Community Bankers Trust from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the integrityoperations of Community Bankers Trust absent the pending completion of the Company’smerger;
the significant risks and costs involved in connection with entering into or completing the merger, or failing to complete the merger in a timely manner, or at all, including as a result of any failure to obtain required regulatory approvals or approval of Community Bankers Trust shareholders, such as the risks and costs relating to diversion of management and employee attention from other strategic opportunities and operational matters, potential employee attrition, and the potential effect on business and customer relationships;
fluctuations in the trading price of United Bankshares common stock that, because the exchange ratio is fixed, will change the value of the shares of United Bankshares common stock that Community Bankers Trust shareholders receive in the merger;
the fact that Community Bankers Trust would be prohibited from soliciting acquisition proposals after execution of the merger agreement, and the possibility that the $12,132,000 termination fee payable by Community Bankers Trust upon the termination of the merger agreement under certain circumstances could discourage other potential acquirers from making a competing bid to acquire Community Bankers Trust;
the fact that some of Community Bankers Trust’s directors and executive officers have other interests in the merger that are different from, or in addition to, their interests as Community Bankers Trust shareholders; and
the possibility of litigation in connection with the merger.
Based on the factors described above, the board of Community Bankers Trust determined that the merger with United Bankshares and the merger of Essex Bank with United Bank would be advisable and in the best interests of Community Bankers Trust and adopted the merger agreement and resolved to recommend its approval to the shareholders of Community Bankers Trust.
The foregoing discussion of the information and factors considered by the Community Bankers Trust board of directors is not intended to be exhaustive but includes the material factors considered by the Community Bankers Trust board of directors. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Community Bankers Trust board of directors did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, the individual members of the Community Bankers Trust board of directors may have given different weight to different factors. The Community Bankers Trust board of directors conducted an overall analysis of the factors described above including through discussions with, and questioning
of, Community Bankers Trust’s management and Community Bankers Trust’s legal and financial statements,advisors, and considered the factors overall to be favorable to, and to support, its determination to adopt the merger agreement and recommend its approval to Community Bankers Trust’s shareholders.
United Bankshares’ Reasons for the Merger
The United Bankshares board of directors considers the strategic direction of United Bankshares, including an evaluation of strategic growth opportunities, on a regular basis. This consideration includes periodic discussions with United Bankshares management with respect to business combination opportunities. In its evaluation of potential acquisition targets, the United Bankshares board of directors considers numerous factors, including among other things the strength of the fit between the target and United Bankshares’ existing business, the accretive or dilutive impact of the acquisition on United Bankshares’ earnings per share and other measures of profitability, the projected strength of the combined enterprise, the expected pro forma effects of the transaction on the balance sheet of the combined enterprise, and the impacts of the transaction on United Bankshares shareholders, employees, customers and other stakeholders.
In reaching its decision to adopt and approve the merger agreement, the merger, the issuance of United Bankshares common stock in connection with the merger and the other transactions contemplated by the merger agreement, the United Bankshares board of directors evaluated the merger agreement, the merger, the issuance of United Bankshares common stock and the other transactions in consultation with United Bankshares management, as well as United Bankshares’ financial and legal advisors, and considered a number of factors, including the following material factors:
United Bankshares’, Community Bankers Trust’s and the combined entity’s business, operations, financial condition, risk profile, asset quality, earnings and prospects. In reviewing these factors, the United Bankshares board of directors considered its view that Community Bankers Trust’s business and operations complement those of United Bankshares and that the merger would result in a combined company with a more diversified revenue stream and an attractive funding base;
The combined entity will be the leading independent auditor’scommunity bank operating throughout the most attractive markets in Virginia and Washington, D.C.;
Community Bankers Trust’s familiarity with the Virginia and Maryland markets;
The board’s understanding of the current and prospective environment in which United Bankshares and Community Bankers Trust operate, including national and local economic conditions, the competitive environment for financial institutions generally and the likely effect of these factors on United Bankshares both with and without the proposed transaction;
Management’s expectation regarding cost synergies, accretion, tangible book value dilution and internal rate of return;
Its review and discussions with United Bankshares management concerning the due diligence examination of Community Bankers Trust;
Sensitivity of the proposed transaction’s economic returns to a variety of factors, including changes to the amount of cost synergies, Community Bankers Trust’s pro forma earnings, Community Bankers Trust’s rates of growth and estimated mark-to-market of the associated loan portfolio;
The market for alternative merger or acquisition transactions in the banking industry and the likelihood and timing of other material strategic transactions;
The complementary nature of the cultures and product mix of the two companies that management believes should facilitate integration and implementation of the transaction;
Management’s expectation that the strong capital position maintained by each separate company prior to the completion of the merger will contribute to a strong capital position for the combined entity upon completion of the merger;
The opinion, dated June 2, 2021, of Performance Trust to the United Bankshares board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to United Bankshares of the exchange ratio in the proposed merger;
The terms of the merger agreement, including the fixed exchange ratio, tax treatment and mutual deal protection and termination fee provisions, which it reviewed with its outside legal and financial advisors;
The potential risks associated with and management’s recent experience in achieving anticipated cost synergies and savings and successfully integrating Community Bankers Trust’s business, operations and workforce with those of Community Bankers Trust;
The nature and amount of payments to be received by Community Bankers Trust management in connection with the merger and the merger-related costs and restructuring charges that will be incurred in connection with the merger;
The potential risk of diverting management attention and resources from the operation of United Bankshares’ business and towards the completion of the merger; and
The regulatory and other approvals required in connection with the merger.
The foregoing discussion of the information and factors considered by the United Bankshares board of directors is not intended to be exhaustive, but includes the material factors considered by the United Bankshares board of directors. In reaching its decision to approve the merger agreement, the merger, the issuance of United Bankshares common stock to Community Bankers Trust shareholders in connection with the merger, and the other transactions contemplated by the merger agreement, the United Bankshares board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The United Bankshares board of directors considered all these factors as a whole, including discussions with, and questioning of, United Bankshares management and United Bankshares’ financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.
Opinion of Community Bankers Trust’s Financial Advisor
Community Bankers Trust retained Piper Sandler to act as financial advisor to Community Bankers Trust’s board of directors in connection with Community Bankers Trust’s consideration of a possible business combination. Community Bankers Trust selected Piper Sandler to act as its financial advisor because Piper Sandler is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Piper Sandler is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.
Piper Sandler acted as financial advisor to Community Bankers Trust’s board of directors in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the merger agreement. At the June 2, 2021 meeting at which Community Bankers Trust’s board of directors considered the merger and the merger agreement, Piper Sandler delivered to the board of directors its oral opinion, which was subsequently confirmed in writing on June 2, 2021, to the effect that, as of such date, the exchange ratio was fair to the holders of Community Bankers Trust’s common stock from a financial point of view. The full text of Piper Sandler’s opinion is attached as Appendix B to this prospectus and proxy statement. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and independence,limitations on the performancereview undertaken by Piper Sandler in rendering its opinion. The description of the Company’s internal audit function and independent auditors,opinion set forth below is qualified in its entirety by reference to the effectivenessfull text of the Company’s internal control over financial reporting and compliance byopinion. Holders of Community Bankers Trust common stock are urged to read the Companyentire opinion carefully in connection with legal and regulatory requirements. The Audit Committee also provides oversighttheir consideration of the Company’s risk management programs and activities and reviewsproposed merger.
Piper Sandler’s opinion was directed to the effectivenessboard of directors of Community Bankers Trust in connection with its consideration of the Company’s processmerger and the merger agreement and does not constitute a recommendation to any shareholder of Community Bankers Trust as to how to vote at the special meeting. Piper Sandler’s opinion was directed only to the fairness, from a financial point of view, of the exchange ratio to the holders of Community Bankers Trust common stock and did not address the underlying business decision of Community Bankers Trust to engage in the merger, the form or structure of the merger or any other transactions contemplated in the merger agreement, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for managingCommunity Bankers Trust or the effect of any other transaction in which Community Bankers Trust might engage. Piper Sandler also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director or employee of Community Bankers Trust or United Bankshares, or any class of such persons, if any, relative to the compensation to be received in the merger by any other shareholder. Piper Sandler’s opinion was approved by Piper Sandler’s fairness opinion committee.
In connection with its opinion, Piper Sandler reviewed and assessing risk. Aconsidered, among other things:
an execution copy of the Audit Committee’s charter ismerger agreement;
certain publicly available onfinancial statements and other historical financial information of Community Bankers Trust and its banking subsidiary, Essex Bank, that Piper Sandler deemed relevant;
certain publicly available financial statements and other historical financial information of United Bankshares that Piper Sandler deemed relevant;
certain internal financial projections for Community Bankers Trust for the “Corporate Overview – Corporate Governance” pageyears ending December 31, 2021 and December 31, 2022 with an estimated long-term annual balance sheet and net income growth rate for the years ending December 31, 2023 through December 31, 2025, as well as estimated dividends per share for Community Bankers Trust for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of Community Bankers Trust;
publicly available median analyst GAAP net income estimates for United Bankshares for the years ending December 31, 2021 and December 31, 2022 and an estimated annual net income growth rate for the years ending December 31, 2023 through December 31, 2025, as confirmed by the senior management of United Bankshares, as well as estimated dividends per share for United Bankshares for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of United Bankshares;
the pro forma financial impact of the Company’s internet website atwww.cbtrustcorp.com.merger on United Bankshares based on certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings, as well as estimated net income for Community Bankers Trust for the years ending December 31, 2021 and December 31, 2022 with an estimated long-term annual net income growth rate for the years ending December 31, 2023 and December 31, 2024, as provided by the senior management of United Bankshares;
Thethe publicly reported historical price and trading activity for Community Bankers Trust common stock and United Bankshares common stock, including a comparison of certain stock trading information for Community Bankers Trust common stock and United Bankshares common stock and certain stock indices, as well as similar publicly available information for certain other companies, the securities of which are publicly traded;
a comparison of certain financial and market information for Community Bankers Trust and United Bankshares with similar financial institutions for which information is publicly available;
the financial terms of certain recent business combinations in the bank and thrift industry (on a nationwide basis), to the extent publicly available;
the current market environment generally and the banking environment in particular; and
such other information, financial studies, analyses and investigations and financial, economic and market criteria as Piper Sandler considered relevant.
Piper Sandler also discussed with certain members of the Audit Committee are Mr. Barber (Chair), Messrs. Hardy, Peerysenior management of Community Bankers Trust and Rawlsits representatives the business, financial condition, results of operations and Ms. Williams. The Company’s Boardprospects of Directors has determinedCommunity Bankers Trust and held similar discussions with certain members of the senior management of United Bankshares and its representatives regarding the business, financial condition, results of operations and prospects of United Bankshares.
In performing its review, Piper Sandler relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by Piper Sandler from public sources, that was provided to Piper Sandler by Community Bankers Trust or United Bankshares or their respective representatives, or that was otherwise reviewed by Piper Sandler, and Piper Sandler assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Piper Sandler relied on the assurances of the respective managements of Community Bankers Trust and United Bankshares that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading. Piper Sandler was not asked to and did not undertake an independent verification of any of such information and Piper Sandler did not assume any responsibility or liability for the accuracy or completeness thereof. Piper Sandler did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of Community Bankers Trust or United Bankshares, nor was Piper Sandler furnished with any such evaluations or appraisals. Piper Sandler rendered no opinion or evaluation on the collectability of any assets or the future performance of any loans of Community Bankers Trust or United Bankshares. Piper Sandler did not make an independent evaluation of the adequacy of the allowance for loan losses of Community Bankers Trust or United Bankshares, or of the combined entity after the merger, and Piper Sandler did not review any individual credit files relating to Community Bankers Trust or United Bankshares. Piper Sandler assumed, with Community Bankers Trust’s consent, that the respective allowances for loan losses for both Community Bankers Trust and United Bankshares were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.
In preparing its analyses, Piper Sandler used certain internal financial projections for Community Bankers Trust for the years ending December 31, 2021 and December 31, 2022 with an estimated long-term annual balance sheet and net income growth rate for the years ending December 31, 2023 through December 31, 2025, as well as estimated dividends per share for Community Bankers Trust for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of Community Bankers Trust. In addition, Piper Sandler used publicly available median analyst GAAP net income estimates for United Bankshares for the years ending December 31, 2021 and December 31, 2022 and an estimated annual net income growth rate for the years ending December 31, 2023 through December 31, 2025, as confirmed by the senior management of United Bankshares, as well as estimated dividends per share for United Bankshares for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of United Bankshares. Piper Sandler also received and used in its pro forma analyses certain assumptions relating to purchase accounting adjustments and cost savings, as well as estimated net income for Community Bankers Trust for the years ending December 31, 2021 and December 31, 2022 with an estimated long-term annual net income growth rate for the years ending December 31, 2023 and December 31, 2024, as provided by the senior management of United Bankshares. With respect to the foregoing information, the senior managements of Community Bankers Trust and United Bankshares confirmed to Piper Sandler that such information reflected (or, in the case of the publicly available analyst estimates referred to above, were consistent with) the best currently available projections, estimates and judgments of those respective managements as to the future financial performance of Community Bankers Trust and United Bankshares, respectively, and the other matters covered thereby, and Piper Sandler assumed that the future financial performance reflected in such information would be achieved. Piper Sandler expressed no opinion as to such information, or the assumptions on which such information was based. Piper Sandler also assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of Community Bankers Trust or United Bankshares since the date of the
most recent financial statements made available to Piper Sandler. Piper Sandler assumed in all respects material to its analysis that Community Bankers Trust and United Bankshares would remain as going concerns for all periods relevant to its analysis.
Piper Sandler also assumed, with Community Bankers Trust’s consent, that (i) each of the parties to the merger agreement would comply in all material respects with all material terms and conditions of the merger agreement and all related agreements, that all of the representations and warranties contained in such agreements were true and correct in all material respects, that each of Messrs. Barber and Hardy qualifies as an audit committee financial expert, as defined by the rules and regulationsparties to such agreements would perform in all material respects all of the Securitiescovenants and Exchange Commission,other obligations required to be performed by such party under such agreements and that each member of the Audit Committee is independent, as independence for audit committee members is defined by the Nasdaq Stock Market’s listing standards.
The Audit Committee met eight timesconditions precedent in 2018. For additional information regarding the Audit Committee, see the “Report of the Audit Committee” section beginning on page 47 of this proxy statement.
Compensation Committee
The Compensation Committee assists the Boardsuch agreements were not and would not be waived, (ii) in the fulfillmentcourse of its oversight responsibilitiesobtaining the necessary regulatory or third party approvals, consents and releases with respect to the Company’s executive compensation. The primary purposemerger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Community Bankers Trust, United Bankshares, the merger or any related transactions, and (iii) the merger and any related transactions would be consummated in accordance with the terms of the Compensation Committee ismerger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Finally, with Community Bankers Trust’s consent, Piper Sandler relied upon the advice that Community Bankers Trust received from its legal, accounting and tax advisors as to ensure thatall legal, accounting and tax matters relating to the compensation and benefits for senior managementmerger and the Boardother transactions contemplated by the merger agreement. Piper Sandler expressed no opinion as to any such matters.
Piper Sandler’s opinion was necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to Piper Sandler as of, Directors are fairthe date thereof. Events occurring after the date thereof could materially affect Piper Sandler’s opinion. Piper Sandler has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof. Piper Sandler expressed no opinion as to the trading value of Community Bankers Trust common stock or United Bankshares common stock at any time or what the value of United Bankshares common stock will be once it is actually received by the holders of Community Bankers Trust common stock.
In rendering its opinion, Piper Sandler performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Piper Sandler’s opinion or the presentation made by Piper Sandler to Community Bankers Trust’s board of directors, but is a summary of the material analyses performed and appropriate, are alignedpresented by Piper Sandler. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the interestsaccompanying text. The tables alone do not constitute a complete description of the Company’s shareholders and do not posefinancial analyses. The preparation of a riskfairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial healthanalysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Piper Sandler believes that its analyses must be considered as a whole and that selecting portions of the Companyfactors and analyses to be considered without considering all factors and analyses, or its affiliates. A copyattempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the Compensation Committee’s charterevaluation process underlying its opinion. Also, no company included in Piper Sandler’s comparative analyses described below is availableidentical to Community Bankers Trust or United Bankshares and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or transaction values, as the case may be, of Community Bankers Trust and United Bankshares and the companies to which they were compared. In arriving at its opinion, Piper Sandler did not attribute any particular weight to any analysis or factor that it considered. Rather, Piper Sandler made qualitative judgments as to the significance and relevance of each analysis and factor. Piper Sandler did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion, rather, Piper Sandler made its determination as to the fairness of the exchange ratio to the holders of Community Bankers Trust common stock on the “Corporate Overview – Corporate Governance” page of the Company’s internet website atwww.cbtrustcorp.com.
The current members of the Compensation Committee are Mr. Putnam (Chair) and Messrs. Fain, Peery and Watkins. The Company’s Board of Directors has determined that each member of the Compensation Committee is independent, as defined by the Nasdaq Stock Market’s listing standards. The Compensation Committee met four times in 2018.
The Company’s compensation program consists generally of salary, annual cash bonus and incentives, equity-based long-term compensation and pre- and post-retirement benefits. The Compensation Committee is responsible for the review and approval of the Company’s compensation plans, compensation for senior management, salary and bonus ranges for other employees and all employment, severance, change in control and retirement agreements. The Compensation Committee also reviews and approves compensation for the directors of the Company and its banking subsidiary. The Compensation Committee recommends that its determinations be ratified by the independent members of the Company’s Board of Directors. The Compensation Committee has not delegated anybasis of its authority to other persons.experience and professional judgment after considering the results of all its analyses taken as a whole.
In makingperforming its determinationsanalyses, Piper Sandler also made numerous assumptions with respect to compensation,industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the Compensation Committee has reliedcontrol of Community Bankers Trust, United Bankshares, and Piper Sandler. The analyses performed by Piper Sandler are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Piper Sandler prepared its analyses solely for purposes of rendering its opinion and provided such analyses to Community Bankers Trust’s board of directors at its June 2, 2021 meeting. Estimates on recommendations from the Company’s Presidentvalues of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and Chief Executive Officeractual values may be materially different. Accordingly, Piper Sandler’s analyses do not necessarily reflect the value of Community Bankers Trust common stock or United Bankshares common stock or the prices at which Community Bankers Trust or United Bankshares common stock may be sold at any time. The analyses of Piper Sandler and its opinion were among a number of factors taken into consideration by Community Bankers Trust’s board of directors in making its determination to approve the merger agreement and the analyses described below should not be viewed as determinative of the decision of Community Bankers Trust’s board of directors with respect to the salariesfairness of the Company’sexchange ratio.
Summary of Proposed Merger Consideration and Implied Transaction Metrics.
Piper Sandler reviewed the financial terms of the proposed merger. As set forth in the merger agreement, at the effective time, each share of Community Bankers Trust common stock issued and outstanding immediately prior to the effective time, except for certain shares of Community Bankers Trust common stock as specified in the merger agreement, shall become and be converted into the right to receive, subject to the limitations set forth in the merger agreement, 0.3173 of a share, which we refer to as the exchange ratio, of United Bankshares common stock. Piper Sandler calculated an aggregate implied transaction value of approximately $309.0 million and an implied purchase price per share of $13.24 consisting of the implied value of 22,454,926 shares of Community Bankers Trust common stock and 1,901,500 Community Bankers Trust options outstanding at a weighted average strike price of $7.01, and based on the closing price of United Bankshares’ common stock on June 1, 2021. Based upon financial information for Community Bankers Trust as of or for the last twelve months, or LTM, ended March 31, 2021 and the closing price of Community Bankers Trust’s common stock on June 1, 2021, Piper Sandler calculated the following implied transaction metrics:
Transaction Price / Tangible Book Value Per Share | 171% | |||
Transaction Price / LTM Earnings Per Share | 14.4x | |||
Transaction Price / 2021 Est. Median Consensus Earnings Per Share | 13.8x | |||
Transaction Price / 2022 Est. Median Consensus Earnings Per Share | 17.4x | |||
Transaction Price / 2021 Est. Community Bankers Trust Projected Earnings Per Share¹ | 15.8x | |||
Transaction Price / 2022 Est. Community Bankers Trust Projected Earnings Per Share¹ | 16.8x | |||
Tangible Book Premium / Core Deposits (CDs > $100K)2 | 12.1% | |||
Tangible Book Premium / Core Deposits (CDs > $250K)3 | 10.3% | |||
Market Premium as of June 1, 2021 | 49.7% |
1 | as provided by Community Bankers Trust senior management |
2 | Core deposits defined as total deposits less time deposits with balances greater than $100,000 |
3 | Core deposits defined as total deposits less time deposits with balances greater than $250,000 |
Stock Trading History.
Piper Sandler reviewed the publicly available historical reported trading prices of Community Bankers Trust common stock and United Bankshares common stock for the one-year and three-year periods ended June 1, 2021. Piper Sandler then compared the relationship between the movements in the price of Community Bankers Trust common stock and United Bankshares common stock, respectively, to movements in their respective peer groups (as described below) as well as certain stock indices.
Community Bankers Trust’s One-Year Stock Performance
Beginning Value June 1, 2020 | Ending Value June 1, 2021 | |||||||
Community Bankers Trust | 100 | % | 161.3 | % | ||||
Community Bankers Trust Peer Group | 100 | % | 160.2 | % | ||||
S&P 500 Index | 100 | % | 137.5 | % | ||||
Nasdaq Bank Index | 100 | % | 179.3 | % |
Community Bankers Trust’s Three-Year Stock Performance
Beginning Value June 1, 2018 | Ending Value June 1, 2021 | |||||||
Community Bankers Trust | 100 | % | 89.7 | % | ||||
Community Bankers Trust Peer Group | 100 | % | 108.3 | % | ||||
S&P 500 Index | 100 | % | 153.7 | % | ||||
NASDAQ Bank Index | 100 | % | 112.9 | % |
United Bankshares’ One-Year Stock Performance
Beginning Value June 1, 2020 | Ending Value June 1, 2021 | |||||||
United Bankshares | 100 | % | 144.8 | % | ||||
United Bankshares Peer Group | 100 | % | 170.6 | % | ||||
S&P 500 Index | 100 | % | 137.5 | % | ||||
Nasdaq Bank Index | 100 | % | 179.3 | % |
United Bankshares’ Three-Year Stock Performance
Beginning Value June 1, 2018 | Ending Value June 1, 2021 | |||||||
United Bankshares | 100 | % | 112.7 | % | ||||
United Bankshares Peer Group | 100 | % | 104.3 | % | ||||
S&P 500 Index | 100 | % | 153.7 | % | ||||
Nasdaq Bank Index | 100 | % | 112.9 | % |
Comparable Company Analyses.
Piper Sandler used publicly available information to compare selected financial information for Community Bankers Trust with a group of financial institutions selected by Piper Sandler. The group, which we refer to as the Community Bankers Trust Peer Group included major-exchange traded (NYSE, NYSEAM, Nasdaq) banks and thrifts headquartered in the Southeast region or Maryland with total assets between $1.0B and $3.0B, but excluded targets of announced mergers, and also excluded Shore Bancshares, Inc. due to its pending merger with Severn Bancorp, Inc.. The Community Bankers Trust Peer Group consisted of the following companies:
C&F Financial Corporation | MetroCity Bankshares, Inc. | |
Capital Bancorp, Inc. | MVB Financial Corp. | |
Citizens Holding Company | National Bankshares, Inc. | |
Colony Bankcorp, Inc. | Old Point Financial Corporation | |
First Community Corporation | Partners Bancorp | |
First National Corporation | Peoples Bancorp of North Carolina, Inc. | |
First United Corporation | Professional Holding Corp. | |
FVCBankcorp, Inc. | Southern First Bancshares, Inc. | |
Howard Bancorp, Inc. | The Community Financial Corporation | |
MainStreet Bancshares, Inc. |
The analysis compared publicly available financial information for Community Bankers Trust with corresponding data for the Community Bankers Trust Peer Group as of or for the year ended March 31, 2021 (unless otherwise noted) with pricing data as of June 1, 2021. The table below sets forth the data for Community Bankers Trust and the median, mean, low and high data for the Community Bankers Trust Peer Group.
Community Bankers Trust Comparable Company Analysis
Community Bankers Trust | Community Bankers Trust Peer Group Median | Community Bankers Trust Peer Group Mean | Community Bankers Trust Peer Group Low | Community Bankers Trust Peer Group High | ||||||||||||||||
Total assets ($mm) | 1,699 | 1,799 | 1,888 | 1,028 | 2,646 | |||||||||||||||
Loans / Deposits (%) | 85.1 | 78.6 | 79.5 | 52.0 | 106.9 | |||||||||||||||
Non-performing assets / Total assets (%)1 | 0.71 | 0.61 | 0.57 | 0.08 | 1.33 | |||||||||||||||
Tangible common equity/Tangible assets (%) | 10.15 | 8.77 | 8.63 | 6.05 | 11.42 | |||||||||||||||
Tier 1 Leverage Ratio (%)2 | 10.43 | 9.70 | 9.79 | 6.93 | 12.23 | |||||||||||||||
Total RBC Ratio (%)3 | 13.83 | 14.83 | 15.30 | 12.51 | 19.88 | |||||||||||||||
CRE / Total RBC Ratio (%)4 | 301.1 | 233.3 | 237.8 | 51.6 | 375.5 | |||||||||||||||
LTM Return on average assets (%) | 1.28 | 0.96 | 0.98 | -0.56 | 2.23 | |||||||||||||||
LTM Return on average equity (%) | 12.45 | 10.09 | 10.20 | -4.71 | 21.25 | |||||||||||||||
LTM Net interest margin (%) | 3.51 | 3.33 | 3.48 | 2.62 | 5.12 | |||||||||||||||
LTM Efficiency ratio (%) | 56.78 | 62.08 | 62.86 | 41.71 | 83.23 | |||||||||||||||
Price/Tangible book value (%) | 114 | 122 | 133 | 104 | 213 | |||||||||||||||
Price/LTM Earnings per share (x) | 9.6 | 11.6 | 13.4 | 7.2 | 33.3 | |||||||||||||||
Price/2021 Est. Earnings per share (x)5 | 9.2 | 11.4 | 11.7 | 6.8 | 19.9 | |||||||||||||||
Price/2022 Est. Earnings per share (x)5 | 11.6 | 12.1 | 12.2 | 7.4 | 19.8 | |||||||||||||||
Current Dividend Yield (%) | 2.7 | 2.1 | 1.8 | 0.0 | 5.0 | |||||||||||||||
Market value ($mm) | 196 | 186 | 228 | 90 | 495 |
1 | Bank level regulatory data shown for Citizens Holding Company. |
2 | Bank level regulatory data shown for MVB Financial Corp., FVCBankcorp, Inc., MainStreet Bancshares, Inc., Partners Bancorp, Inc., First Community Corporation, Old Point Financial Corporation, First National Corporation, and Community Bankers Trust. |
3 | Not Reported for MVB Financial Corp. and FVCBankcorp, Inc. given that the companies have elected into the Community Bank Leverage Ratio Framework; Bank level regulatory data shown for MainStreet Bancshares, Inc., Partners Bancorp, First Community Corporation, Old Point Financial Corporation, First National Corporation, and Community Bankers Trust. |
4 | Bank level regulatory data shown for all but Southern First Bancshares, Inc., First United Corporation, and Peoples Bancorp of North Carolina, Inc. |
5 | Based on median consensus analyst estimates |
Piper Sandler used publicly available information to perform a similar analysis for United Bankshares by comparing selected financial information for United Bankshares with a group of financial institutions selected by Piper Sandler. The group, which we refer to as the United Bankshares Peer Group, included nationwide major-exchange traded (NYSE, NYSEAM, Nasdaq) banks and thrifts with total assets between $20.0 billion and $35.0 billion, but excluded targets of announced mergers, Bank OZK due to its unique business model, and Webster Financial Corporation, BancorpSouth Bank and Old National Bancorp due to their pending mergers with Sterling Bancorp, Cadence Bancorporation and First Midwest Bancorp, Inc., respectively. The United Bankshares Peer Group consisted of the following companies:
Ameris Bancorp | Investors Bancorp, Inc. | |
Associated Banc-Corp | Pacific Premier Bancorp, Inc. | |
Bank of Hawaii Corporation | PacWest Bancorp | |
Commerce Bancshares, Inc. | Simmons First National Corporation | |
First Hawaiian, Inc. | UMB Financial Corporation | |
Fulton Financial Corporation | Umpqua Holdings Corporation |
The analysis compared publicly available financial information for United Bankshares with corresponding data for the United Bankshares Peer Group as of or for the year ended March 31, 2021 (unless otherwise noted) with pricing data as of June 1, 2021. The table below sets forth the data for United Bankshares and the median, mean, low and high data for the United Bankshares Peer Group.
United Bankshares Comparable Company Analysis
United Bankshares | United Bankshares Peer Group Median | United Bankshares Peer Group Mean | United Bankshares Peer Group Low | United Bankshares Peer Group High | ||||||||||||||||
Total assets ($mm) | 27,031 | 25,858 | 27,293 | 20,173 | 34,669 | |||||||||||||||
Loans / Deposits (%) | 81.2 | 72.8 | 75.9 | 58.3 | 109.8 | |||||||||||||||
Non-performing assets / Total assets (%)1 | 0.44 | 0.40 | 0.43 | 0.13 | 0.83 | |||||||||||||||
Tangible common equity/Tangible assets (%) | 9.93 | 7.95 | 8.24 | 6.06 | 10.39 | |||||||||||||||
Tier 1 Leverage Ratio (%) | 10.38 | 9.07 | 8.76 | 6.61 | 10.43 | |||||||||||||||
Total RBC Ratio (%) | 15.68 | 14.50 | 14.87 | 13.60 | 17.50 | |||||||||||||||
CRE / Total RBC Ratio (%) | 228.0 | 226.2 | 230.4 | 89.3 | 435.8 | |||||||||||||||
LTM Return on average assets (%) | 1.38 | 1.07 | 1.13 | 0.55 | 1.85 | |||||||||||||||
LTM Return on average equity (%) | 8.44 | 9.65 | 10.64 | 3.98 | 16.85 | |||||||||||||||
LTM Net interest margin (%) | 3.22 | 2.83 | 3.02 | 2.42 | 3.89 | |||||||||||||||
LTM Efficiency ratio (%) | 48.74 | 55.98 | 55.38 | 44.66 | 66.37 | |||||||||||||||
Price/Tangible book value (%) | 215 | 206 | 202 | 133 | 288 | |||||||||||||||
Price/LTM Earnings per share (x) | 15.0 | 13.7 | 14.5 | 9.7 | 21.7 | |||||||||||||||
Price/2021 Est. Earnings per share (x)2 | 15.1 | 13.6 | 14.1 | 11.0 | 20.3 | |||||||||||||||
Price/2022 Est. Earnings per share (x)2 | 17.0 | 15.0 | 15.0 | 11.1 | 22.2 | |||||||||||||||
Current Dividend Yield (%) | 3.4 | 2.9 | 2.7 | 1.1 | 4.4 | |||||||||||||||
Market value ($mm) | 5,388 | 3,825 | 4,362 | 2,828 | 9,143 |
1 | Bank level regulatory data shown for Ameris Bancorp. |
2 | Based on median consensus analyst estimates. |
Analysis of Precedent Transactions.
Piper Sandler reviewed a group of recent nationwide merger and acquisition transactions. The group, which we refer to as the Nationwide Precedent Transactions, consisted of nationwide bank and thrift transactions announced between January 1, 2020 and June 1, 2021 with disclosed deal values with the target’s total assets between $1.0 billion and $3.0 billion, but excluded mergers-of-equals and take-private transactions.
The Nationwide Precedent Transactions group was composed of the following transactions:
Acquiror | Target | |
First Bancorp. | Select Bancorp, Inc. | |
Enterprise Financial Services Corp | First Choice Bancorp | |
Nicolet Bankshares, Inc. | Mackinac Financial Corporation | |
VyStar Credit Union | Heritage Southeast Bancorporation, Inc. | |
Peoples Bancorp Inc. | Premier Financial Bancorp, Inc. | |
Banc of California, Inc. | Pacific Mercantile Bancorp | |
Stock Yards Bancorp, Inc. | Kentucky Bancshares, Inc. | |
First Busey Corporation | Cummins-American Corp. | |
First Mid Bancshares, Inc. | LINCO Bancshares, Inc. | |
Dollar Mutual Bancorp | Standard AVB Financial Corp. | |
Enterprise Financial Services Corp | Seacoast Commerce Banc Holdings |
Acquiror | Target | |
Provident Financial Services, Inc. | SB One Bancorp | |
United Community Banks, Inc. | Three Shores Bancorporation, Inc. | |
LendingClub Corporation | Radius Bancorp, Inc. | |
Heartland Financial USA, Inc. | AIM Bancshares, Inc. | |
Business First Bancshares, Inc. | Pedestal Bancshares, Inc. |
Using the latest publicly available information prior to the announcement of the relevant transaction, Piper Sandler reviewed the following transaction metrics: deal value, transaction price to LTM earnings per share, transaction price to median consensus analyst estimated earnings per share, transaction price to tangible book value per share, core deposit premium, and one-day market premium. Piper Sandler compared the indicated transaction metrics for the transaction to the median, mean, low and high metrics of the Nationwide Precedent Transactions group.
Nationwide Precedent Transactions | ||||||||||||||||||||
United Bankshares / Community Bankers Trust | Median | Mean | Low | High | ||||||||||||||||
Deal Value ($M) | 309 | 211 | 228 | 145 | 398 | |||||||||||||||
Transaction Price / LTM Earnings Per Share (x) | 14.4 | 14.9 | 16.9 | 9.2 | 29.2 | |||||||||||||||
Transaction Price / Median Consensus Est. Earnings Per Share (x) | 13.8/15.8 | 1 | 14.4 | 15.8 | 8.8 | 24.7 | ||||||||||||||
Transaction Price / Tangible Book Value Per Share (%) | 171 | 154 | 154 | 102 | 210 | |||||||||||||||
Tangible Book Value Premium to Core Deposits (%) | 12.12/10.3 | 3 | 7.1 | 7.1 | 1.4 | 12.7 | ||||||||||||||
1-Day Market Premium (%) | 49.7 | 29.8 | 37.2 | 9.5 | 75.9 |
1 | Earnings per share estimate per Community Bankers Trust management. |
2 | Core deposits defined as total deposits less time deposits with balances greater than $100,000. |
3 | Core deposits defined as total deposits less time deposits with balances greater than $250,000. |
Net Present Value Analyses.
Piper Sandler performed an analysis that estimated the net present value of Community Bankers Trust common stock assuming Community Bankers Trust performed in accordance with certain internal financial projections for Community Bankers Trust for the years ending December 31, 2021 and December 31, 2022 with an estimated long-term annual balance sheet and net income growth rate for the years ending December 31, 2023 through December 31, 2025, as well as estimated dividends per share for Community Bankers Trust for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of Community Bankers Trust. To approximate the terminal value of a share of Community Bankers Trust common stock at December 31, 2025, Piper Sandler applied price to 2025 earnings multiples ranging from 10.0x to 15.0x and bonus levelsmultiples of 2025 tangible book value ranging from 100% to 150%. The terminal values were then discounted to present values using different discount rates ranging from 11.0% to 15.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Community Bankers Trust common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of Community Bankers Trust common stock of $5.90 to $9.75 when applying multiples of earnings and $6.22 to $10.33 when applying multiples of tangible book value.
Earnings Per Share Multiples
Discount Rate | 10.0x | 11.0x | 12.0x | 13.0x | 14.0x | 15.0x | ||||||||||||||||||
11.0% | $ | 6.90 | $ | 7.47 | $ | 8.04 | $ | 8.61 | $ | 9.18 | $ | 9.75 | ||||||||||||
12.0% | 6.63 | 7.18 | 7.72 | 8.27 | 8.82 | 9.37 | ||||||||||||||||||
13.0% | 6.37 | 6.90 | 7.42 | 7.95 | 8.47 | 9.00 | ||||||||||||||||||
14.0% | 6.13 | 6.63 | 7.14 | 7.64 | 8.14 | 8.65 | ||||||||||||||||||
15.0% | 5.90 | 6.38 | 6.86 | 7.35 | 7.83 | 8.31 |
Tangible Book Value Per Share Multiples
Discount Rate | 100% | 110% | 120% | 130% | 140% | 150% | ||||||||||||||||||
11.0% | $ | 7.27 | $ | 7.88 | $ | 8.49 | $ | 9.11 | $ | 9.72 | $ | 10.33 | ||||||||||||
12.0% | 6.99 | 7.57 | 8.16 | 8.74 | 9.33 | 9.92 | ||||||||||||||||||
13.0% | 6.72 | 7.28 | 7.84 | 8.40 | 8.96 | 9.52 | ||||||||||||||||||
14.0% | 6.46 | 7.00 | 7.54 | 8.08 | 8.61 | 9.15 | ||||||||||||||||||
15.0% | 6.22 | 6.73 | 7.25 | 7.76 | 8.28 | 8.80 |
Piper Sandler also considered and discussed with Community Bankers Trust’s board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to earnings. To illustrate this impact, Piper Sandler performed a similar analysis, assuming Community Bankers Trust’s earnings varied from 20.0% above projections to 20.0% below projections. This analysis resulted in the following range of per share values for all employees.Community Bankers Trust’s common stock, applying the price to 2025 earnings multiples range of 10.0x to 15.0x referred to above and a discount rate of 13.20%.
Earnings Per Share Multiples
Annual Budget Variance | 10.0x | 11.0x | 12.0x | 13.0x | 14.0x | 15.0x | ||||||||||||||||||
(20.0%) | $ | 5.28 | $ | 5.70 | $ | 6.12 | $ | 6.53 | $ | 6.95 | $ | 7.36 | ||||||||||||
(10.0%) | 5.80 | 6.27 | 6.74 | 7.21 | 7.68 | 8.15 | ||||||||||||||||||
0.0% | 6.32 | 6.84 | 7.36 | 7.89 | 8.41 | 8.93 | ||||||||||||||||||
10.0% | 6.84 | 7.42 | 7.99 | 8.56 | 9.13 | 9.71 | ||||||||||||||||||
20.0% | 7.36 | 7.99 | 8.61 | 9.24 | 9.86 | 10.49 |
Piper Sandler also performed an analysis that estimated the net present value per share of United Bankshares common stock, assuming United Bankshares performed in accordance with publicly available median analyst GAAP net income estimates for United Bankshares for the years ending December 31, 2021 and December 31, 2022 and an estimated annual net income growth rate for the years ending December 31, 2023 through December 31, 2025, as confirmed by the senior management of United Bankshares, as well as estimated dividends per share for United Bankshares for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of United Bankshares. To approximate the terminal value of a share of United Bankshares common stock at December 31, 2025, Piper Sandler applied price to 2025 earnings multiples ranging from 12.0x to 19.5x and multiples of 2025 tangible book value ranging from 150% to 250%. The Compensation Committeeterminal values were then discounted to present values using different discount rates ranging from 8.0% to 12.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of United Bankshares common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of United Bankshares common stock of $24.38 to $42.87 when applying multiples of earnings and $26.81 to $48.67 when applying multiples of tangible book value.
Earnings Per Share Multiples
Discount Rate | 12.0x | 13.5x | 15.0x | 16.5x | 18.0x | 19.5x | ||||||||||||||||||
8.0% | $ | 28.55 | $ | 31.41 | $ | 34.28 | $ | 37.14 | $ | 40.01 | $ | 42.87 | ||||||||||||
9.0% | 27.43 | 30.17 | 32.91 | 35.65 | 38.40 | 41.14 | ||||||||||||||||||
10.0% | 26.36 | 28.99 | 31.61 | 34.24 | 36.86 | 39.49 | ||||||||||||||||||
11.0% | 25.35 | 27.86 | 30.38 | 32.89 | 35.41 | 37.92 | ||||||||||||||||||
12.0% | 24.38 | 26.80 | 29.21 | 31.62 | 34.03 | 36.44 |
Tangible Book Value Per Share Multiples
Discount Rate | 150% | 170% | 190% | 210% | 230% | 250% | ||||||||||||||||||
8.0% | $ | 31.43 | $ | 34.88 | $ | 38.32 | $ | 41.77 | $ | 45.22 | $ | 48.67 | ||||||||||||
9.0% | 30.18 | 33.48 | 36.78 | 40.08 | 43.38 | 46.68 | ||||||||||||||||||
10.0% | 29.00 | 32.16 | 35.32 | 38.48 | 41.64 | 44.80 | ||||||||||||||||||
11.0% | 27.88 | 30.90 | 33.93 | 36.96 | 39.98 | 43.01 | ||||||||||||||||||
12.0% | 26.81 | 29.71 | 32.61 | 35.51 | 38.41 | 41.31 |
Piper Sandler also considered and discussed with Community Bankers Trust’s board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to earnings. To illustrate this impact, Piper Sandler performed a similar analysis assuming United Bankshares’ earnings varied from 20.0% above estimates to 20.0% below estimates. This analysis resulted in the following range of per share values for United Bankshares common stock, applying the price to 2025 earnings multiples range of 12.0x to 19.5x referred to above and a discount rate of 10.34%.
Earnings Per Share Multiples
Annual Estimate Variance | 12.0x | 13.5x | 15.0x | 16.5x | 18.0x | 19.5x | ||||||||||||||||||
(20.0%) | $ | 21.87 | $ | 23.94 | $ | 26.01 | $ | 28.08 | $ | 30.15 | $ | 32.23 | ||||||||||||
(10.0%) | 23.94 | 26.27 | 28.60 | 30.93 | 33.26 | 35.59 | ||||||||||||||||||
0.0% | 26.01 | 28.60 | 31.19 | 33.78 | 36.37 | 38.95 | ||||||||||||||||||
10.0% | 28.08 | 30.93 | 33.78 | 36.63 | 39.47 | 42.32 | ||||||||||||||||||
20.0% | 30.15 | 33.26 | 36.37 | 39.47 | 42.58 | 45.68 |
Piper Sandler noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the President and Chief Executive Officer work together to finalize these salary and bonus decisions. The Compensation Committee determines the compensationresults thereof are not necessarily indicative of actual values or future results.
Pro Forma Transaction Analysis.
Piper Sandler analyzed certain potential pro forma effects of the Presidentmerger on United Bankshares assuming the transaction closes on December 31, 2021. Piper Sandler utilized the following information and Chief Executive Officer,assumptions: (a) estimated net income for Community Bankers Trust for the years ending December 31, 2021 and December 31, 2022 with an estimated long-term annual net income growth rate for the years ending December 31, 2023 and December 31, 2024, as provided by the senior management of United Bankshares, (b) publicly available median analyst GAAP net income estimates for United Bankshares for the years ending December 31, 2021 and December 31, 2022 and an estimated annual net income growth rate for the years ending December 31, 2023 through December 31, 2025, as confirmed by the senior management of United Bankshares,
as well as estimated dividends per share for United Bankshares for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of United Bankshares, and (c) certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings as provided by the senior management of United Bankshares. The analysis indicated that the transaction could be accretive to United Bankshares’ estimated earnings per share (excluding one-time transaction costs and expenses) in the years ending December 31, 2022 through December 31, 2024 and accretive to United Bankshares’ estimated tangible book value per share at close.
In connection with this analysis, Piper Sandler considered and discussed with the Community Bankers Trust’s board of directors how the analysis would be affected by changes in the underlying assumptions, including the impact of final purchase accounting adjustments determined at the closing of the transaction, and noted that the actual results achieved by the combined company may vary from projected results and the Boardvariations may be material.
Piper Sandler’s Relationship.
Piper Sandler is acting as Community Bankers Trust’s financial advisor in connection with the transaction and will receive a fee for such services in an amount equal to 1.25% of Directors approvesthe aggregate transaction value, which fee is contingent upon the closing of the merger. Based on the estimated aggregate transaction value at the time of announcement of the transaction, Piper Sandler’s fee would be approximately $3.8 million. Piper Sandler also received a $300,000 fee from Community Bankers Trust upon rendering its opinion, which opinion fee will be credited in full towards the transaction fee that will become payable to Piper Sandler upon closing of the transaction. Community Bankers Trust has also agreed to indemnify Piper Sandler against certain claims and liabilities arising out of Piper Sandler’s engagement and to reimburse Piper Sandler for certain of its out-of-pocket expenses incurred in connection with Piper Sandler’s engagement.
Piper Sandler has not provided any other investment banking services to Community Bankers Trust in the two years preceding the date of its opinion. Piper Sandler provided certain investment banking services to United Bankshares in the two years preceding the date of its opinion. In summary, Piper Sandler acted as financial advisor to United Bankshares in connection with its acquisition of Carolina Financial Corporation, which transaction closed in May 2020 and for which Piper Sandler received approximately $2.1 million in compensation. In addition, in the ordinary course of Piper Sandler’s business as a broker-dealer, Piper Sandler may purchase securities from and sell securities to Community Bankers Trust and United Bankshares. Piper Sandler may also actively trade the equity and debt securities of Community Bankers Trust and United Bankshares for its own account and for the accounts of Piper Sandler’s customers.
Certain Unaudited Prospective Financial Information
United Bankshares and Community Bankers Trust do not as a matter of course make public projections as to future performance, revenues, earnings or other financial results due to, among other reasons, the inherent uncertainty of the underlying assumptions and estimates. However, United Bankshares and Community Bankers Trust are including in this determination.prospectus and proxy statement certain unaudited prospective financial information that each of United Bankshares and Community Bankers Trust made available to the other party in connection with the other party’s evaluation of the merger and to Piper Sandler, in its capacity as Community Bankers Trust’s financial advisor. The inclusion of this information should not be regarded as an indication that any of United Bankshares, Community Bankers Trust, Piper Sandler, their respective representatives or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results or that it should be construed as financial guidance, and it should not be relied on as such.
The following unaudited financial information was prepared solely for internal use and is subjective in many respects. The unaudited prospective financial information reflects numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters
During
specific to United Bankshares’ and Community Bankers Trust’s respective businesses, all of which are difficult to predict and many of which are beyond United Bankshares’ and Community Bankers Trust’s control. The unaudited prospective financial information reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Neither United Bankshares nor Community Bankers Trust can give any assurance that the unaudited prospective financial information and the underlying estimates and assumptions will be realized. In addition, since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the unaudited prospective financial information to be inaccurate include, but are not limited to, risks and uncertainties relating to United Bankshares’ and Community Bankers Trust’s respective businesses, industry performance, general business and economic conditions, customer requirements, competition and adverse changes in applicable laws, regulations or rules. For other factors that could cause actual results to differ, please see the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” beginning on page 23 and page 16, respectively, of this prospectus and proxy statement and in United Bankshares’ and Community Bankers Trust’s respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2018,2020, and the Committee engaged Matthews Young – Management Consulting to provide compensation consulting servicesother reports filed by each of United Bankshares and Community Bankers Trust with the SEC.
The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with U. S. generally accepted accounting principles, or GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In addition, the unaudited prospective financial information requires significant estimates and assumptions that make it inherently less comparable to the Committee. The consultant assisted the Committeesimilarly titled GAAP measures in reviewing the competitive marketplace compensation levels for the Company’s executive officers.
In retaining the consultant as the Committee’s advisor, the Committee reviewed the factors necessary for evaluating the consultant’s independence status. These factors were as follows:
For additional information regarding the Compensation Committee, see the “Executive Compensation” section beginning on page 20 of this proxy statement.
Nominating and Governance Committee
The Nominating and Governance Committee (the “Nominating Committee”) assists the Board in the fulfillment of its oversight responsibilitiesUnited Bankshares’ or Community Bankers Trust’s historical GAAP financial statements. Neither United Bankshares’ nor Community Bankers Trust’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the Company’s corporate governance.unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. The Nominating Committee is responsible primarily for making recommendationsindependent registered public accountant reports included in this prospectus and proxy statement relate to historical financial information of each of United Bankshares and Community Bankers Trust. They do not extend to the Board of Directors regardingunaudited prospective financial information and should not be read to do so.
Furthermore, the membership of the Board, including recommending to the Board the slate of director nominees for election at each annual meeting of shareholders, considering, recommending and recruiting candidates to fill any vacancies or new positions on the Board, including candidates that may be recommended by shareholders, establishing criteria for selecting new directors and reviewing the backgrounds and qualifications of possible candidates for director positions. A copy of the Nominating Committee’s charter is available on the “Corporate Overview – Corporate Governance” page of the Company’s internet website atwww.cbtrustcorp.com.
The current members of the Nominating Committee are Mr. Hardy (Chair), Messrs. Bozard and Fain and Ms. Williams. The Company’s Board of Directors has determined that each member of the Nominating Committee is independent, as defined by the Nasdaq Stock Market’s listing standards. The Nominating Committee met five times in 2018.
In identifying potential nominees for service as a director, the Nominating Committee takesunaudited prospective financial information does not take into account such factors asany circumstances or events occurring after the date it deems appropriate, including the current composition of the Board, to ensure diversity among its members. Diversity includes the range of talents, experiences and skills that would best complement those that are already represented on the Board, the balance of management and independent directors and the need for specialized expertise. Diversity also includes education, race, gender and the geographic areas where the individual has resided, worked or served. The Nominating Committee considers candidates for Board membership suggested by Board members and by management, and it will also consider candidates suggested informally by a shareholder of the Company.
Messrs. Fain and Way, who are being presented for election as directors for the first time at the Annual Meeting, were presented to the Nominating Committee by management.
The Nominating Committee considers, at a minimum, the following factors in recommending to the Board of Directors potential new directors, or the continued service of existing directors:
The Nominating Committee may weight the foregoing criteria differently in different situations, depending on the composition of the Board of Directors at the time. In addition, prior to nominating an existing director for re-election to the Board of Directors, the Nominating Committee will consider and review an existing director’s Board and committee attendance and performance, independence, length of board service, and experience, skills and contributions that the existing director brings to the Board.
Shareholders entitled to vote for the election of directors may submit candidates for formal consideration by the Nominating Committee in connection with an annual meeting if the Company receives timely written notice, in proper form, for each such recommended director nominee. If the notice is not timely and in proper form, the nominee will not be considered by the Company. To be timely for the 2020 annual meeting, the notice must be received within the time frame set forth in the “Shareholder Proposals” section on page 48 of this proxy statement. To be in proper form, the notice must include each nominee’s written consent to be named as a nominee and to serve, if elected, and information about the shareholder making the nomination and the person nominated for election. These requirements are more fully described in Section 3.4 of the Company’s Bylaws, a copy of which will be provided, without charge, to any shareholder upon written request to the Secretary of the Company, whose address iswas prepared. Neither United Bankshares nor Community Bankers Trust Corporation, 9954 Mayland Drive, Suite 2100, Richmond, Virginia 23233.
Compensation Committee Interlocks and Insider Participation
No membercan give any assurance that, had the unaudited prospective financial information been prepared as of the Compensation Committee is a currentdate of this prospectus and proxy statement, similar estimates and assumptions would be used. United Bankshares and Community Bankers Trust each do not intend to, and disclaim any obligation to, make publicly available any update or former officerother revision to the unaudited prospective financial information to reflect circumstances existing since their preparation or employeeto reflect the occurrence of unanticipated events, even in the event that any or all of the Companyunderlying assumptions are shown to be in error, or any of its subsidiaries. In addition, there are no compensation committee interlocks withto reflect changes in general economic or industry conditions. The unaudited prospective financial information does not take into account the possible financial and other entities with respect to any such member.
Annual Meeting Attendance
Meetingseffects on either United Bankshares or Community Bankers Trust, as applicable, of the Board of Directorsmerger and its committees are held in conjunction with the annual meeting of shareholders, and the Company expects all directors and nomineesdoes not attempt to attend each annual meeting of shareholders. Allpredict or suggest future results of the Board’s then current directors attended the 2018 annual meeting.
Communications with Directors
Any director may be contacted by writing to him or her in carecombined company. The unaudited prospective financial information of Community Bankers Trust Corporation, 9954 Mayland Drive, Suite 2100, Richmond, Virginia 23233. Communicationsand United Bankshares does not give effect to the non-management directorsimpact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, the potential synergies that may be achieved by the combined company as a group mayresult of the merger, the effect of any business or strategic decision or action that has been or will be senttaken as a result of the merger agreement having been executed, or the effect on either United Bankshares or Community Bankers Trust, as applicable, of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the unaudited prospective financial information does not take into account the
effect on either United Bankshares or Community Bankers Trust, as applicable, of any possible failure of the merger to occur. None of United Bankshares, Community Bankers Trust, Piper Sandler or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any shareholder of United Bankshares or Community Bankers Trust or other person regarding United Bankshares’ or Community Bankers Trust’s ultimate performance compared to the same address, c/oinformation contained in the Secretaryunaudited prospective financial information or that the projected results will be achieved.
The inclusion of the Company.unaudited prospective financial information herein should not be deemed an admission or representation by United Bankshares or Community Bankers Trust that such information is viewed as material information of United Bankshares or Community Bankers Trust, respectively, particularly in light of the inherent risks and uncertainties associated with such information.
In light of the foregoing, and considering that the special meeting will be held several months after the unaudited prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, Community Bankers Trust shareholders are cautioned not to place unwarranted reliance on such information, and all Community Bankers Trust shareholders are urged to review United Bankshares’ most recent SEC filings for a description of United Bankshares’ reported financial results and Community Bankers Trust’s most recent SEC filings for a description of Community Bankers Trust’s reported financial results. See “Where You Can Find More Information” on page 99 of this prospectus and proxy statement.
Certain Unaudited Prospective Financial Information of Community Bankers Trust
For purposes of Piper Sandler’s net present value analysis on Community Bankers Trust performed in connection with its opinion, Piper Sandler used certain internal financial projections for Community Bankers Trust for the years ending December 31, 2021 and December 31, 2022, as well as an estimated long-term annual growth rate of 6% for the years ending December 31, 2023 through December 31, 2025, and estimated dividends per share for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of Community Bankers Trust. The Company promptly forwards, without screening, all such correspondence to the indicated directors.following table summarizes this unaudited prospective financial information used by Piper Sandler for its Community Bankers Trust net present value analysis:
Director Compensation
The Board of Directors approves director compensation on an annual basis following a review of the recommendation of the Compensation Committee. The independent consultant that the Compensation Committee retains reviews the Company’s director compensation and benchmarks it against the director compensation of the Company’s peer banks.
The Company currently compensates its non-employee directors as follows:
For the Years Ended December 31, | ||||||||||||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||
Net Income ($000s) | $ | 18,500 | $ | 17,403 | $ | 18,448 | $ | 19,555 | $ | 20,728 | ||||||||||
Earnings per Share ($) | $ | 0.84 | $ | 0.79 | $ | 0.83 | $ | 0.89 | $ | 0.94 | ||||||||||
Dividends per Share ($) | $ | 0.25 | (1) | $ | 0.29 | $ | 0.33 | $ | 0.37 | $ | 0.41 | |||||||||
Tangible Book Value per Share ($) | $ | 8.03 | $ | 8.52 | $ | 9.01 | $ | 9.51 | $ | 10.03 |
(1) |
Includes estimated dividends totaling $0.19 per share for the |
The total compensationFor purposes of the Company’s non-employee directorsPiper Sandler’s pro forma transaction analysis performed in connection with its opinion, Piper Sandler used net income of $21.6 million and $16.9 million for Community Bankers Trust for the year endedyears ending December 31, 2018 is shown in2021 and December 31, 2022, respectively, as well as a long-term net income growth rate of 4% for the years ending December 31, 2023 and December 31, 2024, as provided by the senior management of United Bankshares. The following table.tables summarize this unaudited prospective financial information used by Piper Sandler for its pro forma transaction analysis:
Name | Fees Earned or ($)(4) | Stock Awards ($)(5) | Nonqualified ($)(6) | Total ($) | ||||||||||||
Barber | 24,580 | 15,984 | — | 40,564 | ||||||||||||
Bozard | 22,975 | 15,984 | — | 38,959 | ||||||||||||
Fain (1) | 7,700 | 11,069 | — | 18,769 | ||||||||||||
Hardy | 25,991 | 15,984 | — | 41,975 | ||||||||||||
Hughes (2) | 9,859 | 4,000 | 3,788 | 17,647 | ||||||||||||
Peery | 18,450 | 15,984 | — | 34,434 | ||||||||||||
Putnam | 23,175 | 15,984 | — | 39,159 | ||||||||||||
Rawls | 24,575 | 15,984 | — | 40,559 | ||||||||||||
Smith (3) | — | — | — | — | ||||||||||||
Watkins | 24,925 | 27,966 | — | 52,891 | ||||||||||||
Way (1) | 9,450 | 11,069 | — | 20,519 | ||||||||||||
Williams | 29,350 | 15,984 | — | 45,334 |
For the Years Ended December 31, | ||||||||||||||||
2021 | 2022 | 2023 | 2024 | |||||||||||||
Net Income ($000s) | $ | 21,600 | $ | 16,900 | $ | 17,600 | $ | 18,300 |
Certain Unaudited Prospective Financial Information of United Bankshares
For purposes of Piper Sandler’s net present value analysis on United Bankshares and its pro forma transaction analysis performed in connection with its opinion, Piper Sandler used publicly available median analyst GAAP net income estimates for United Bankshares for the years ending December 31, 2021 and December 31, 2022, as well as an estimated annual net income growth rate of 4% for the years ending December 31, 2023 through December 31, 2025, and estimated dividends per share for the years ending December 31, 2021 through December 31, 2025, as provided by the senior management of United Bankshares. The following table summarizes this unaudited prospective financial information used by Piper Sandler for its United Bankshares net present value analysis and its pro forma transaction analysis:
For the Years Ended December 31, | ||||||||||||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||
Net Income ($000s) | $ | 355,900 | $ | 313,300 | $ | 325,832 | $ | 338,860 | $ | 352,387 | ||||||||||
Earnings per Share ($) | $ | 2.76 | $ | 2.45 | $ | 2.55 | $ | 2.65 | $ | 2.75 | ||||||||||
Dividends per Share ($) | $ | 1.41 | (1) | $ | 1.44 | $ | 1.45 | $ | 1.48 | $ | 1.49 | |||||||||
Tangible Book Value per Share ($) | $ | 20.28 | $ | 21.31 | $ | 22.41 | $ | 23.58 | $ | 24.84 |
(1) | Includes estimated dividends totaling $1.06 per share for the quarters ending June 30, 2021, September 30, 2021 and |
Certain Unaudited Prospective Pro Forma Financial Information
The following unaudited pro forma financial information reflecting the effect of the merger was provided by senior management of United Bankshares to Piper Sandler for its pro forma transaction analysis and was reviewed by Community Bankers Trust:
Name |
Date of Award |
Number of | Grant Date Fair Value Per Share ($) | |||||||
Each of: | March 1, 2018 | 479 | 8.35 | |||||||
Barber | June 1, 2018 | 406 | 9.85 | |||||||
Bozard | September 1, 2018 | 441 | 9.05 | |||||||
Hardy | December 1, 2018 | 483 | 8.27 | |||||||
Peery | ||||||||||
Putnam | ||||||||||
Rawls | ||||||||||
Williams | ||||||||||
Hughes | March 1, 2018 | 479 | 8.35 | |||||||
Fain | June 22, 2018 | 313 | 9.85 | |||||||
Way | September 1, 2018 | 441 | 9.05 | |||||||
December 1, 2018 | 483 | 8.27 | ||||||||
Watkins | March 1, 2018 | 838 | 8.35 | |||||||
June 1, 2018 | 710 | 9.85 | ||||||||
September 1, 2018 | 772 | 9.05 | ||||||||
December 1, 2018 | 845 | 8.27 |
Cost savings equal to 30% of Community Bankers Trust’s projected non-interest expense;
Approximately $20 million in one-time pre-tax merger costs;
Purchase accounting adjustments of a gross loan credit mark of approximately $24 million, or 2.0% of gross loans; and
Core deposit intangibles of 0.25% of Community Bankers Trust’s non-time deposits, amortized sum-of-years digits method over 10 years.
PROPOSAL ONEPublic Trading Markets
United Bankshares common stock trades on Nasdaq under the symbol “UBSI.” Community Bankers Trust common stock trades on Nasdaq under the symbol “ESXB.” Upon completion of the merger, Community Bankers Trust common stock will be delisted from Nasdaq and deregistered under the Exchange Act. The newly issued United Bankshares common stock issuable pursuant to the merger agreement will be listed on Nasdaq.
ELECTION OF DIRECTORSNo Dissenters’ or Appraisal Rights
In general, dissenters’ appraisal rights are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction.
General
The Company’s BoardSection 13.1-730 of Directors currently consiststhe Virginia Stock Corporation Act provides that shareholders of 11 directorsa Virginia corporation such as Community Bankers Trust have the right, in some circumstances, to dissent from certain corporate action and is divided into three classesto instead demand payment of the fair value of their shares. However, shareholders do not have dissenters’ rights with staggered terms. The directors in Class I serve for a termrespect to shares of any class of stock that expires atare listed on the 2021 annualNew York Stock Exchange or listed on Nasdaq on the record date fixed to determine the shareholders entitled to receive notice of the meeting of shareholders to act upon the corporate action requiring appraisal rights.
Community Bankers Trust common stock is listed on Nasdaq; therefore, holders of Community Bankers Trust common stock will not be entitled to dissenters’ appraisal rights in the merger with respect to their shares of Community Bankers Trust common stock.
Interests of Certain Community Bankers Trust Directors and Executive Officers in the Merger
In considering the recommendations of the Community Bankers Trust board of directors that Community Bankers Trust shareholders vote in Class II servefavor of the Merger Proposal, Community Bankers Trust shareholders should be aware that Community Bankers Trust directors and executive officers may have interests in the merger that differ from, or are in addition to, their interests as shareholders of Community Bankers Trust. The Community Bankers Trust board of directors was aware of these interests and took them into account in its decision to approve and adopt the merger agreement and the transactions contemplated by the merger agreement, including the merger.
Options to Acquire Community Bankers Trust Common Stock
As of the record date for the Community Bankers Trust special meeting, the Community Bankers Trust directors and executive officers owned, in the aggregate, options to purchase 1,072,500 shares of Community Bankers Trust common stock granted under a term that expiresCommunity Bankers Trust equity compensation plan. Under the merger agreement, at the Annual Meeting and the directors in Class III serve for a term that expires at the 2020 annual meeting of shareholders. In June 2018, the Company appointed Hugh M. Fain, III to the Board and designated him as a Class I director, and the Company appointed Oliver L. Way to the Board and designated him as a Class II director
The Board, upon the recommendation of the Nominating Committee, has nominated Gerald F. Barber, Mr. Fain, Eugene S. Putnam, Jr. and Mr. Way for election to the Board at the Annual Meeting. All of the nominees presently serve as directors – the terms of Messrs. Barber and Putnam will expire at the Annual Meeting, and Messrs. Fain and Way, as directors appointed since the 2018 annual meeting of shareholders, are being presented to the shareholders for the first time. The Company is asking shareholders to elect Mr. Fain for a two-year term that expires at the 2021 annual meeting of shareholders and Messrs. Barber, Putnam and Way for a three-year term that expires at the 2022 annual meeting of shareholders.
The Board of Directors recommends that the shareholders voteFOR the election of Messrs. Barber, Fain, Putnam and Way. If you sign and return your proxy card in the enclosed envelope or execute a proxy by telephone or through the internet, the persons named in the enclosed proxy card will vote to elect these three nominees unless you indicate otherwise. Your proxy for the Annual Meeting cannot be voted for more than three nominees.
Each of the Company’s nominees has indicated the willingness to serve if elected. If any nominee of the Company is unable or unwilling to serve as a director at theeffective time of the Annual Meeting, then shares represented by properly executed proxiesmerger each such stock option that is outstanding and not yet exercised immediately prior to the merger, whether vested or unvested, will vest pursuant to the terms thereof and will be votedconverted into an option to acquire, on the same terms and conditions as were applicable under such stock option, the number of shares of United Bankshares common stock equal to (a) the number of shares of Community Bankers Trust common stock subject to such stock option multiplied by (b) 0.3173. Such product will be rounded down to the nearest whole number. The exercise price per share (rounded up to the next whole cent) of each United Bankshares stock option issued for the Community Bankers Trust stock option will equal (y) the exercise price per share of shares of Community Bankers Trust common stock that were purchasable pursuant to such Community Bankers Trust stock option divided by (z) 0.3173.
As of the record date for the special meeting, shares underlying options that will vest at the discretioneffective time of the persons named in those proxies for such other person asmerger held by the Board may designate. The Company does not presently expect that any of the nominees will be unavailable.
The election of each nominee for director requires the affirmative vote of the holders of a plurality of the shares of common stock voted in the election of directors. Thus, those nominees receiving the greatest number of votes cast will be elected.
The term of Troy A. Peery, Jr. as a Class II director expires at the Annual Meeting, and Mr. Peery cannot stand for re-election under the age restrictions set forth in the Company’s Corporate Governance Guidelines. The Guidelines provide that a director not stand for re-election if the director is 73 or older at the end of his or her expiring term. The Company expresses its sincere gratitude to Mr. Peery for his service as a director of TransCommunity Financial Corporation, which the Company acquired in 2008 (“TransCommunity Financial”), and its successors since 1999.
The following information sets forth the business experience for at least the past five years and other information for all nominees and all other directors whose terms will continue after the Annual Meeting. Such information includes each director’s service on the boards of TransCommunity Financial and BOE Financial, as the case may be. References to a director’s service on the board of BOE Financial include service on the board of its predecessor, the Bank.
Nominee for Election to a Two-Year Term (Class I Director)
Hugh M. Fain, 61, has been a director of the Company since June 2018. Mr. Fain is President and a director of Spotts Fain PC, a law firm in Richmond, Virginia, where he has been a lawyer since 1992. He has 35 years of experience as a civil trial attorney in a broad range of commercial and business matters. Mr. Fain’s representative clients include both public and private companies, as well as individual entrepreneurs, many of whom rely on him for general business counsel.
In addition to his strategic planning and management skills, Mr. Fain has been active with numerous organizations and provides the Board with expertise in corporate governance and fiduciary duties. He also has significant community ties to the Bank’s central Virginia market areas that support its business development initiatives.
Nominees for Election to a Three-Year Term (Class II Directors)
Gerald F. Barber, 67, has been a director of the Company since 2014. Mr. Barber is a finance professional with over 40 years of experience in accounting, auditing and consulting. He has worked with organizations of all sizes from start-up businesses to multi-national corporations and has delivered services to organizations in numerous industries, including banking, financial services, consumer/industrial products, retail and technology. He was a Transaction Services Partner with PricewaterhouseCoopers LLP (“PwC”) from 2001 to 2012 and led the U.S. Latin America Transaction Services Practice in Washington, D.C. and Miami, Florida from 2004 to 2012. Since his retirement from PwC in 2012, Mr. Barber has continued advising both middle market and multi-national corporations. He served as an adjunct professor at the University of Virginia’s McIntire School of Commerce during 2012 and 2013. He has been in the audit and accounting field since 1975.
Mr. Barber brings extensive experience in the areas of accounting and auditing, merger and acquisition transactions, financial services and management. He is a Certified Public Accountant.
Eugene S. Putnam, Jr., 59, has been a director of the Company since 2005 and served as its Chairman of the Board from 2005 to 2008. Mr. Putnam was President and Chief Financial Officer for Universal Technical Institute, Inc., a post-secondary education provider based in Scottsdale, Arizona, from 2011 to 2016. He served as Executive Vice President and Chief Financial Officer for Universal Technical Institute, Inc. from 2008 to 2011, and he served as its interim Chief Financial Officer from 2008 to 2008.
Mr. Putnam brings high level financial expertise as chief financial officer of publicly traded companies and experience in risk management and strategic planning. He also has banking expertise in corporate finance, capital planning and balance sheet management. His background helps him play critical roles on the Board’s committees.
Oliver L. Way, 66, has been a director of the Company since June 2018. From 2005 until his retirement in March 2018, Mr. Way was Executive Vice President and Central and Northern Virginia President of Fulton Bank, N.A., the main banking subsidiary of Fulton Financial Corporation based in Lancaster, Pennsylvania. At Fulton Bank, he oversaw banking operations, planning and strategic initiatives in its central and northern Virginia markets. Mr. Way has over 40 years’ experience in the financial services industry, including 23 years with Wachovia Bank and its predecessor, Central Fidelity Bank.
Mr. Way brings many years of experience and expertise in leadership, business development, risk management and credit analysis. He also has significant community and financial industry ties to the Bank’s central Virginia market areas.
Directors Whose Terms Do Not Expire This Year (Class I and Class III Directors)
Richard F. Bozard, 72, has been a director of the Company since 2008. He had previously served as a director of TransCommunity Financial since 2006. Mr. Bozard was Vice President and Treasurer of Owens & Minor, Inc., a medical and surgical supplies distributor based in Mechanicsville, Virginia, from 1991 until his retirement in 2009. He had also been Senior Vice President and Treasurer of Owens & Minor Medical, Inc., a subsidiary of Owens & Minor, Inc., from 2004 until his retirement.
Mr. Bozard brings broad experience in the areas of management and oversight of public companies. He also has significant experience in asset and liability management, finance, strategic planning and mergers and acquisitions, which provides both the Board and management with a substantial resource, and thus he serves as Chair of the Board’s Asset and Liability Committee.
William E. Hardy, 63, has been a director of the Company since 2017. Mr. Hardy is a certified public accountant with over 35 years of accounting and auditing experience in the central Virginia market. He is a partner and the Chief Executive Officer of Harris, Hardy & Johnstone, P.C., an accounting firm in Richmond, Virginia, that he founded in 1987. Mr. Hardy’s expertise covers numerous industries, including hotels, real estate, manufacturing, construction contractors and wholesale and retail operations. He has been in the audit and accounting field since 1983.
In addition to his accounting and auditing background, Mr. Hardy provides the Board with financial insight into many diverse industries. He also has significant community ties to the Bank’s central Virginia market areas.
S. Waite Rawls III, 70, has been a director of the Company since 2011. Mr. Rawls has been President of the American Civil War Museum Foundation in Richmond, Virginia, since 2016. He was Co-Chief Executive Officer of the American Civil War Museum in Richmond, Virginia, from 2013 to 2016. He was President of the Museum of the Confederacy in Richmond, Virginia, from 2004 to 2013.
Mr. Rawls has numerous years of leadership positions in, among others, the technology, financial management and capital market fields, all of which underscore the insight that he has as a director. Mr. Rawls also has 18 years of working experience in the banking industry, serving as Vice Chairman of Continental Bank in Chicago, Illinois for four years and as Managing Director of Chemical Bank in New York, New York for 14 years. While the banking industry has changed, Mr. Rawls remains very familiar with the issues facing banks and the regulatory environment in which they operate.
Rex L. Smith, III, 61, has been a director of the Company since 2011. Mr. Smith has been President and Chief Executive Officer of the Company and the Bank since 2011. He served as the Bank’s Executive Vice President and Chief Banking Officer from 2010 to 2011, and he held the responsibilities of President and Chief Executive Officer of the Company and the Bank, including serving as Executive Vice President of the Company, for eight months in 2010 and 2011. From 2009 to 2010, he was the Bank’s Executive Vice President and Chief Administrative Officer. From 2007 to 2009, he was the Central Virginia President for Gateway Bank and Trust and, from 2000 to 2007, he was President and Chief Executive Officer of The Bank of Richmond.
Mr. Smith has over 38 years of experience in the banking industry and a unique perspective from the management experiences that he has had with different banks. He is also intimately aware of the particular opportunities and challenges facing the Company and the Bank, as he has been a member of executive management for 10 years.
John C. Watkins, 72, has been a director of the Company since 2008 and has served as Chairman of the Board since 2011. He had previously served as a director of TransCommunity Financial and its predecessor, Bank of Powhatan, N.A., since 1998. Senator Watkins was President of Watkins Nurseries, Inc., a landscape design firm and wholesale plant material grower based in Midlothian, Virginia, from 1998 to 2008, and he currently serves as the Chairman of its board of directors. He has also been Manager and Development Director for Watkins Land, LLC, a real estate company based in Midlothian, Virginia, since 1999. He was a member of the Virginia House of Delegates from 1982 to 1998, a member of the Senate of Virginia from 1998 to 2016 and a member of the Powhatan County Economic Development Authority since 2016.
Senator Watkins brings long-term corporate management experience as a small business owner and entrepreneur, through his ownership and operation of successful businesses in the Company’s market areas. He also brings substantial government and public policy expertise and leadership knowledge to the Company due to his long service in the Virginia state government. He has significant community ties to the Bank’s central Virginia market areas.
Robin Traywick Williams, 68, has been a director of the Company since 2008. She had previously served as a director of TransCommunity Financial since 2002. Mrs. Williams is a writer and, from 2009 to 2011, she served as president of the Thoroughbred Retirement Foundation. From 1998 to 2003, she served as Chairman of the Virginia Racing Commission in Richmond, Virginia.
Mrs. Williams brings regulatory and governance leadership to the Board through her experience with Virginia government and regulatory agencies and community organizations. She also has significant community ties to the Bank’s central Virginia market areas.
The Company’s executive officers as of March 20, 2019 and their respective ages and positions are set forth in the following table.
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The following information sets forth the business experience for at least the past five years and other information for the executive officers. Such information with respect to Mr. Smith is set forth above in the “Proposal One – Election of Directors” section.
Mr. Thomas has been Executive Vice President and Chief Financial Officer of the Company since 2010, and he was Senior Vice President and Chief Financial Officer of the Company from 2008 to 2010. From 2000 to 2008, he was Senior Vice President and Chief Financial Officer of BOE Financial. He has been employed in various positions with the Bank since 1990.
Mr. Cantrell has been the Bank’s Executive Vice President and Chief Operating Officer since 2012, and he was the Bank’s Senior Vice President and Senior Financial Officer from 2009 to 2012. From 2008 to 2009, he was Executive Vice President, Chief Financial Officer and Chief Operating Officer for North Metro Financial LLC, the organizational entity for a bank in organization in Georgia. From 1984 to 2008, he was employed with Regions Bank, where he most recently served in the position of Senior Vice President and East Region Financial Manager.
Ms. Davis has been the Bank’s Executive Vice President and Chief Credit Officer since 2014. From 2011 to 2014, she served as the Bank’s Senior Vice President and Senior Credit Officer. From 2009 to 2011, she served as the Bank’s Loan Review Officer. Ms. Davis has over 30 years of experience in the banking industry, the last 18 of which have been in credit risk management, including executive management roles at First Charter Bank in Charlotte, North Carolina, which was acquired by Fifth Third Bank in 2008.
Mr. Oakey has been General Counsel and Secretary of the Company and the Bank since 2009, with the titles of General Counsel since 2010 and Senior Legal Counsel from 2009 to 2010. He was named Executive Vice President in 2011. From 2007 to 2009, he was Director and Assistant General Counsel for Circuit City Stores, Inc. Until 2007, he was a partner at the law firm of Williams Mullen, where he began practicing in 1995.
Mr. Saunders has been the Bank’s Executive Vice President and Chief Risk Officer since 2011. From 2010 to 2011, he served as the Bank’s Executive Vice President and Chief Operating Officer. From 2008 to 2010, he served as the Bank’s Senior Vice President – Chief Risk Officer. From 2004 to 2008, he was the Bank’s Vice President – Risk Management. Mr. Saunders has 32 years of experience in the banking industry, including experience with regulatory work, audit and operations.
Compensation Committee Report
The Compensation Committee of the Board of Directors reviews and establishes the compensation program for the Company’s senior management, including the named executive officers in the Summary Compensation Table below, and provides oversight of the Company’s compensation program. A discussion of the principles, objectives, components, analyses and determinations of the Committee with respect to executive compensation is included in the Compensation Discussion and Analysis that follows this Committee report. The Compensation Discussion and Analysis also includes discussion with respect to the Committee’s review of officer and employee compensation plans and specifically any features that may encourage employees to take unnecessary and excessive risks. The specific decisions of the Committee regarding the compensation of the named executive officers are reflected in the compensation tables and narrative that follow the Compensation Discussion and Analysis.
The Compensation Committee certifies that:
(1) it reviewed with the Chief Risk Officer the senior executive officer compensation plans and made all reasonable efforts to ensure that these plans do not encourage the senior executive officers to take unnecessary and excessive risks that threaten the value of the Company;
(2) it reviewed with the Chief Risk Officer the employee compensation plans and made all reasonable efforts to limit any unnecessary risks these plans pose to the Company; and
(3) it reviewed the employee compensation plans to eliminate any features of these plans that would encourage the manipulation of reported earnings of the Company and the Bank to enhance the compensation of any employee.
The Committee has reviewed the Compensation Discussion and Analysis and discussed it with the Company’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 and the Company’s 2019 proxy statement.
Compensation Committee
Eugene S. Putnam, Jr., Chair
Hugh M. Fain, III
Troy A. Peery, Jr.
John C. Watkins
Date: March 15, 2019
Compensation Discussion and Analysis
General
The Compensation Committee of the Company’s Board of Directors reviews and establishes the compensation program for the Company’s senior management, including the named executive officers in the Summary Compensation Table below, and provides oversight of the Company’s compensation program. The Committee consists entirely of non-employee, independent members of the Board and operates under a written charter approved by the Board.
The Committee specifically discharges Board oversight responsibilities with respect to
The Company’s compensation program generally consists of salary, annual cash bonus and incentives, equity-based long-term compensation and benefits. Benefits include participation in the Company’s 401(k) plan and health insurance benefits. The Company also has a defined benefit pension plan, which has been frozen, and a supplemental retirement plan, which has been frozen to new entrants. In 2016, the Company established a non-qualified defined contribution retirement plan for and executed change in control agreements with the named executive officers. In addition, the Company offers perquisites to certain executive officers suchwere as use of Company-owned vehicles.
The Company recognizes that competitive compensation is critical for attracting, motivating, rewarding and retaining qualified executives. One of the fundamental objectives of the Company’s compensation program is to offer competitive compensation and benefits for all employees, including executive officers, in order to compete for and retain talented personnel who will lead the Company in achieving levels of financial performance that enhance shareholder value. The Company also recognizes the importance of setting compensation levels in line with the Company’s overall performance.
The Committee has engaged Matthews Young – Management Consulting as the independent consultant to assist it in carrying out certain responsibilities with respect to executive compensation. Matthews Young satisfies the standards that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) established, and that the Nasdaq Stock Market adopted, with respect to the independence of compensation consultants.
The following discussion explains the material elements of compensation paid to the Company’s named executive officers and provides the material factors underlying its compensation policies and practices. The information in this discussion specifically provides context for the compensation disclosures in the tables that follow it and should be read along with those disclosures.
Compensation Program
The Committee approves the compensation of all members of senior management, including the named executive officers. In making its determinations, the Committee has detailed discussions with both its compensation consultant and the Chief Executive Officer on appropriate levels of compensation, primarily in the context of relevant peer group data, for the Company and the specific positions of its senior officers. In addition, the Committee evaluates not only each component of compensation, as discussed further below, but also the overall total package of compensation for each senior officer.
In connection with its annual approvals, the Committee reviews, with the Company’s Chief Risk Officer, all components of the Company’s compensation program. The Committee has determined that none of these components contain any feature that would encourage the senior officers to take unnecessary and excessive risks that would threaten the value of the Company. In addition, the Committee has determined that there is no element in any senior management or other employee compensation plan that would encourage the senior officers or employees to manipulate reported earnings in order to enhance compensation.
The following information discusses the compensation decisions for the named executive officers for the 2018 year, supplemented by the same decisions for the 2019 year.
Salary
The base salary of the named executive officers is designed to be competitive with that of the Company’s peer banks, as described further below. In establishing the base salary for the named executive officers, the Committee relies on an evaluation of the officers’ level of responsibility and performance and on comparative information. In establishing the base salary, other than for the Chief Executive Officer, the Committee also receives and takes into account the individual compensation recommendations from the Chief Executive Officer. The salary of the Chief Executive Officer is also approved by the independent members of the Board of Directors, upon recommendation of the Committee.
In January 2018, the Committee reviewed and determined salaries for the 2018 year. The Committee received and reviewed recommendations fromfollows: Rex L. Smith, III, for increases105,000; Bruce E. Thomas, 52,500; Jeff R. Cantrell, 52,500; and John M. Oakey, III, 52,500. The foregoing share amounts do not include any reduction in salaries for the other named executive officers. The Committee considered the reasons for the proposed increases, including the value that each officer has contributed to the Company and Mr. Smith’s desire to keep salaries in line with the mid-range levelvesting required either as a result of Section 280G of the Company’s peer group. The Committee and Mr. Smith based their analysis on peer group data that the Committee had reviewed for 2015 salaries, which had been prepared by the Committee’s compensation consultant and was derived from a peer group of publicly reporting financial institutions of similar asset size to the Company and inCode or close to the Company’s market area, with adjustments for cost of living. Memberscertain provisions of the peer group were identified in the Company’s proxy statement for the 2016 annual meeting of shareholders. The information that the Committee reviewed for the 2018 year included only salary range averages from that data and did not include the names of any banks included in the peer group. The proposed increases also reflected cost of living adjustments. Mr. Smith also recommended that Ms. Davis receive a slightly higher percentage increase in salary in order to be closer in line with the peer group data for her position, due to her service time as Chief Credit Officer. As a result, the Committee determined to make, at Mr. Smith’s recommendation and supported by the peer group data, the salary increases for the named executive officers as set forth below effective as of January 1, 2018.
Name | 2017 Salary | 2018 Salary | Percentage Increase | |||||||||
Bruce E. Thomas | $ | 210,000 | $ | 215,000 | 2.38 | % | ||||||
Jeff R. Cantrell | $ | 210,000 | $ | 215,000 | 2.38 | % | ||||||
Patricia M. Davis | $ | 197,000 | $ | 203,000 | 3.06 | % | ||||||
John M. Oakey, III | $ | 210,000 | $ | 215,000 | 2.38 | % |
Also in January 2018, the Committee reviewed and determined a salary for Mr. Smith for the 2018 year. The Committee considered the financial performance of the Company during 2017 from the standpoint of both earnings and credit quality. The Committee also considered reasons for an increase, including the value that Mr. Smith’s performance and service contributed to the Company in 2017 and expectations for 2018. The Committee acknowledged its desire to continue to keep his salary in line with the Company’s peer group, consistent with the other executive officers of the Company. As a result, the Committee approved a salary increase for Mr. Smith from $410,000 to $420,000, effective January 1, 2018, and this increase was subsequently approved by the Board of Directors.
In January 2019, the Committee reviewed and determined salaries for the 2019 year. As it did the previous year, the Committee received and reviewed recommendations from Mr. Smith for increases in salaries for the other named executive officers. The Committee continued to consider Mr. Smith’s desire to keep salaries in line with the mid-range level of the Company’s peer group, with an emphasis more on cost of living adjustments, and supplemented more by the performance-based annual incentives. The peer group data was updated for 2018 information, as provided by the Committee’s compensation consultant and derived from a peer group of publicly reporting financial institutions of similar asset size to the Company and in or close to the Company’s market area. The information that the Committee reviewed for the 2019 year included only salary range averages from that data and did not include the names of any banks included in the peer group. Mr. Smith recommended that each of Mr. Cantrell and Ms. Davis receive a slightly higher percentage increase in salary in order to be closer in line with the peer group data and with internal salary levels. As a result, the Committee determined to make, at Mr. Smith’s recommendation and supported by the peer group data, the salary increases for the named executive officers as set forth below effective as of January 1, 2019.
Name | 2018 Salary | 2019 Salary | Percentage Increase | |||||||||
Thomas | $ | 215,000 | $ | 219,000 | 1.86 | % | ||||||
Cantrell | $ | 215,000 | $ | 220,000 | 2.33 | % | ||||||
Davis | $ | 203,000 | $ | 210,000 | 3.45 | % | ||||||
Oakey, III | $ | 215,000 | $ | 219,000 | 1.86 | % |
Also in January 2019, the Committee reviewed and determined a salary for Mr. Smith for the 2019 year. The Committee considered the financial performance of the Company during 2018 from the standpoint of earnings, credit quality and overall operational performance. The Committee also considered reasons for an increase, including the value that Mr. Smith’s performance and service contributed to the Company in 2018 and expectations for 2019. The Committee acknowledged its desire to continue to keep his salary in line with the Company’s peer group, consistent with the other executive officers of the Company, with an emphasis more on cost of living adjustments, and supplemented more by the performance-based annual incentives. As a result, the Committee approved a salary increase for Mr. Smith from $420,000 to $427,500 (a 1.79% increase), effective January 1, 2019, and this increase was subsequently approved by the Board of Directors.
Annual Incentives
The Committee believes that executive compensation should be meaningfully linked to the Company’s performance. Accordingly, the Company annually adopts an objectives-based incentive plan for the Company’s named executive officers that ties incentive payments to specific operating metrics of the Company. The Committee carefully reviews operating metrics that Mr. Smith has recommended in order to select those metrics that drive growth and earnings and thus overall shareholder value.
For the 2018 year, the metrics in the incentive plan were net income, the amount of non-performing assets as a percentage of total assets at 2018 year end, non-interest-bearing deposit growth and a job-related discretionary component; the four metrics were assigned weights of 80%, 10%, 5% and 5%, respectfully. The plan included threshold, target, stretch and maximum levels of performance for each metric and a corresponding payout, weighted as a percentage of salary, to each of the named executive officers based on the achievement of a specific level, as set forth in the following table.
The proportionate percentage payouts for each of the four operating metrics was determined by the level that the Company achieved with respect to the metric in 2018. In addition, the proportionate percentage payouts were prorated between metric achievement levels.
For 2018, each of the Company’s net income and the amount of non-performing assets as a percentage of total assets were between the target amount and the stretch amount, and non-interest-bearing deposit growth exceeded the maximum amount. Mr. Smith recommended an additional one percent of salary for the named executive officers with respect to the job-related discretionary component under the plan. As a result, on January 17, 2019, the Committee approved incentive awards to the Company’s executive officers (other than Mr. Smith) under the 2018 annual incentive plan, in the aggregate amount of 15.75% of salary, as set forth in the following table.
Name | 2018 Incentive Award | |||
Thomas | $ | 33,863 | ||
Cantrell | $ | 33,863 | ||
Davis | $ | 31,973 | ||
Oakey | $ | 33,863 |
On January 18, 2019, the Board of Directors, upon the recommendation of the Committee, approved an incentive award to Mr. Smith in the amount of $99,225 (23.63% of salary) under the 2018 annual incentive plan, due to the achievement of the performance metrics set forth in that plan, as discussed above.
For the 2019 year, the Company has adopted an incentive plan for the named executive officers that is similar in structure to the plan for the 2018 year. The 2019 plan retains three of the four metrics from the 2018 plan (net income, asset quality and the job-related discretionary component, but not the deposit growth metric), and the three metrics have been assigned weights of 80%, 10% and 10%, respectively. The range of the payout for Mr. Smith and the other named executive officers remains the same as the 2018 plan, as noted in the table above. The Board of Directors of the Company approved this plan on January 18, 2019.
The Committee considers, as appropriate, the recovery of incentive-based compensation that should not have been awarded in the event of a future restatement of financial results or similar event. The Committee expressly included such a clawback policy in the proposedCommunity Bankers Trust 2019 Stock Incentive Plan that is being presented tolimit the shareholders atnumber of awards thereunder that may have a vesting schedule of less than one year. Patricia M. Davis resigned as executive vice president and chief credit officer of Community Bankers Trust effective February 28, 2021.
Restricted Stock Units of Community Bankers Trust Common Stock
As of the Annual Meeting.
Long-Term Incentives
In 2009, the Company adopted and its shareholders approvedrecord date for the Community Bankers Trust Corporation 2009 Stock Incentive Plan. The purposespecial meeting, the Community Bankers Trust directors and executive officers owned, in the aggregate, 35,000 restricted stock units of Community Bankers Trust common stock granted under a Community Bankers Trust equity compensation plan. At the effective time of the merger, each restricted stock unit granted under a Community Bankers Trust stock plan that is outstanding immediately prior to further the long-term stability and financial successeffective time of the Company by attracting and retaining employees and directors throughmerger will vest only in accordance with the use of stock incentivesformula and other rights that promote and recognize the financial success and growthterms of the Company. The Company believessuch stock plan (which generally will result in pro-rata vesting), be cancelled and converted automatically into the right to receive shares of United Bankshares common stock based on the 0.3173 exchange ratio. Any unvested restricted stock units that ownershipdo not vest in accordance with a Community Bankers Trust equity compensation plan will be converted into restricted stock units of CompanyUnited Bankshares, as adjusted to take into account the exchange ratio.
Based on restricted stock will stimulate the efforts of such employees and directors by further aligning their interests with the interestsunit awards outstanding as of the Company’s shareholders. The plan is to be used to grantrecord date for the special meeting, shares underlying restricted stock awards, stock options inunits that Community Bankers Trust expects to vest at the formeffective time of incentive stock options and non-statutory stock options and other stock-based awards to employees and directors ofthe
merger held by the Company. As adopted, the plan makes available up to 2,650,000 shares of common stock for issuance to participants under the plan.
The Committee has considered specifically awards of restricted stock and stock options to the named executive officers and the benefits and disadvantages of each type of award to both the Company and the officer. The Committee believes that stock options have been the most effective type of award for the purposes of its compensation program in recent years in order to align management interests with shareholder interests by rewarding long-term stock price appreciation.
In January 2018, the Committee approved stock option awards to the named executive officers. In taking these actions, the Committee considered recommendations from both the Chief Executive Officer (except with respect to his award) and the Committee’s compensation consultant with respect to the form of the award and the amounts. In determining the specific amounts for the stock option awards, the Committee considered that such awards would motivate individual long-term performance. In addition, the exercise price for each stock option award was set at a price equal to the common stock’s closing sales price on the date of the award. The specific amounts of the awards for theCommunity Bankers Trust named executive officers are set forth in the “Grants of Plan-Based Awards” table on page 30 below. The Committee granted stock option awards to 36 employees, including the named executive officers, in January 2018.
In January 2019, the Committee approved stock option awards to the named executive officers. In taking these actions, the Committee considered recommendations from the Chief Executive Officer (except with respect to his award) with respect to the form of the award and the amounts. The award granted to each of Messrs. Thomas, Cantrell and Oakey and Ms. Davis was an option to acquire 25,000 shares of common stock. In addition, the Committee reviewed a proposed award foras follows: Mr. Smith, 3,071; Mr. Thomas, 1,535; Mr. Cantrell, 1,535; and considered a level that would be consistent with peer group data from the standpoint of a total compensation packageMr. Oakey, 1,535. The foregoing share amounts do not include any reduction in line with Mr. Smith’s years of service to the Company. Asvesting required as a result at the recommendation of the Committee, the Board approved for Mr. Smith a stock option award to acquire 50,000 shares of common stock. In determining the specific amounts for the stock option awards, the Committee considered that such awards would motivate individual long-term performance. The Committee granted stock option awards to 38 employees, including the named executive officers, in January 2019.
In the future, the Company expects that any stock option grants and restricted stock awards to executive officers and other key employees will be approved at regularly scheduled Committee meetings, and subsequently approved by the Board of Directors. The Company’s Chief Executive Officer will provide the Committee with a recommendation concerning the recipients (other than himself), the reason for the award and the number of shares to be awarded. The grant date will generally be the date of the meeting at which the Board approves awards presented by the Committee. The Company will not tie the timing of the issuance of stock options or restricted stock awards to the release or withholding of material non-public information.
Retirement Program
The Company believes that a meaningful retirement program, one that is designed to provide executive officers with an appropriate level of financial security and income, following retirement, relative to their pre-retirement earnings, is a valuable tool in attracting and retaining highly qualified employees.
The Company’s retirement program includes four components, including the following three components that have been in place since its acquisition of BOE Financial and TransCommunity Financial:
In establishing a full compensation program for executive officers, the Committee recognized that the retirement program prior to 2016 did not adequately serve the purpose of attracting and retaining highly qualified employees. In particular, the Committee acknowledged that four of the Company’s six executive officers were only participants in one of the retirement program’s components, the 401(k) employee savings plan.
In response to the limitations of the retirement program, the Company implemented in 2016 a non-qualified defined contribution retirement plan for its named executive officers. The purpose of the plan is to enhance the retirement benefits that the Company provides to each named executive officer and to recognize each officer for overall performance through additional incentive-based compensation. As noted earlier, the Committee believes that executive compensation should be meaningfully linked to the Company’s performance. Accordingly, the plan is a performance driven plan, and the Company makes contributions to the plan on a discretionary basis based on payouts under the Company’s annual incentive plan, which in turn is based on the achievement of various performance metrics that the Company establishes through the Committee, as discussed above. The plan is unfunded and unsecured.
Additional information with respect to the components of the Company’s retirement program, including the value of participant’s accounts, is set forth in the “Post-Employment Compensation” section on page 32 below.
Perquisites and Fringe Benefits
Perquisites and fringe benefits are designed to provide certain personal benefits and to fund certain expenditures that are common among executive officers in many companies. The Committee believes that this component of compensation is a valuable tool in attracting, motivating, rewarding and recruiting highly qualified employees. The Committee reviews the level of these benefits on an annual basis.
The Company provides each of Mr. Smith and Mr. Thomas with the use of a company automobile. The Company provides Mr. Cantrell with an automobile allowance.
Post-Termination Compensation
The Company is aware of constant opportunities for mergers and other consolidations in the banking industry, and the Board of Directors encourages management to seek out such opportunities that are in the best interest of shareholders. The Committee is also mindful of the inherent difficulty that management may have in pursuing opportunities that could result in the loss of their jobs.
In order to support management in such strategic endeavors, in 2016, the Company provided each of the named executive officers with a change in control agreement with terms and pay-outs consistent with both the officer’s position and responsibilities and similar arrangements in place at the Company’s peer banks. Any pay-outs from such an agreement, and other compensation that the officer may receive under other Company plans, will be subject to the limitations of Section 280G of the Internal Revenue Code of 1986, as amended (the “IRC”). The Company’s historical compensation arrangements have not provided for the Company to make “gross-up” payments that would cover the reimbursement of excise taxes that may arise under Section 280G, and accordingly each changeCode.
Change in control agreement similarly does not contain such a “gross-up” provision.
Additional information with respect to the Company’s change in control agreements is set forth beginning on page 34 below.
Summary Compensation Table
The table below sets forth, for the years ended December 31, 2018, December 31, 2017 and December 31, 2016, the compensation earned by the following named executive officers:
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock ($) | Option Awards ($) (1) | Non- sation ($) (2) | Change in Pension Qualified ($) (3) | All Other ($) (4) | Total ($) | ||||||||||||||||||||||||||
Rex L. Smith, III | 2018 | 420,000 | — | — | 146,000 | 99,225 | — | 277,449 | 942,674 | ||||||||||||||||||||||||||
President and Chief | 2017 | 410,000 | — | — | 234,000 | 47,638 | — | 214,973 | 906,611 | ||||||||||||||||||||||||||
Executive Officer | 2016 | 402,000 | — | — | 100,800 | 30,150 | — | 346,946 | 879,896 | ||||||||||||||||||||||||||
Bruce E. Thomas | 2018 | 215,000 | — | — | 73,000 | 33,863 | 13,907 | 48,637 | 384,407 | ||||||||||||||||||||||||||
Executive Vice President | 2017 | 210,000 | — | — | 62,400 | 16,267 | 76,199 | 32,723 | 397,589 | ||||||||||||||||||||||||||
and Chief Financial Officer | 2016 | 204,000 | — | — | 50,400 | 10,200 | 56,845 | 36,455 | 357,900 | ||||||||||||||||||||||||||
Jeff R. Cantrell | 2018 | 215,000 | — | — | 73,000 | 33,863 | — | 59,461 | 381,324 | ||||||||||||||||||||||||||
Executive Vice President | 2017 | 210,000 | — | — | 62,400 | 16,267 | — | 43,946 | 332,613 | ||||||||||||||||||||||||||
and Chief Operating Officer, Essex Bank | 2016 | 204,000 | — | — | 50,400 | 10,200 | — | 57,636 | 322,236 | ||||||||||||||||||||||||||
Patricia M. Davis | 2018 | 203,000 | — | — | 73,000 | 31,973 | — | 49,344 | 357,317 | ||||||||||||||||||||||||||
Executive Vice President | 2017 | 197,000 | — | — | 62,400 | 15,260 | — | 33,972 | 308,632 | ||||||||||||||||||||||||||
and Chief Credit Officer, Essex Bank | 2016 | 190,000 | — | — | 50,400 | 9,500 | — | 52,217 | 302,117 | ||||||||||||||||||||||||||
John M. Oakey, III | 2018 | 215,000 | — | — | 73,000 | 33,863 | — | 52,875 | 374,738 | ||||||||||||||||||||||||||
Executive Vice President, | 2017 | 210,000 | — | — | 62,400 | 16,267 | — | 36,610 | 325,277 | ||||||||||||||||||||||||||
General Counsel and Secretary | 2016 | 204,000 | — | — | 50,400 | 10,200 | — | 50,260 | 314,860 |
Control Employment Agreements
The Company does not currently have employment agreements with any of its executive officers. Information with respect to the Company’s change in control agreements is set forth in the “Post-Employment Compensation” section below.
Pay Ratio Disclosure
For the year ended December 31, 2018, the total compensation for Rex L. Smith, III, the Company’s President and Chief Executive Officer, was $942,674, as presented in the “Summary Compensation Table” above. For the same period, the median of the total compensation of all employees of the Company was $50,766. Accordingly, the ratio of the total compensation of Mr. Smith to the median employee for the 2018 year was 18.57 to 1.
The Company identified the median employee based on a review of the total compensation, as calculated in the same manner for the President and Chief Executive Officer, for the year ended December 31, 2018 of each of the 261 employees who were employed in a full-time or part-time capacity by the Company as of December 31, 2018.
The rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Grants of Plan-Based Awards
The following table shows potential annual performance-based cash bonuses and awards of restricted stock and non-statutory stock options under the Company’s 2009 Stock Incentive Plan during the year ended December 31, 2018.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | All Other Stock | All Other Option Awards: | Exercise | Grant Date Fair | ||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Number of (#) | Number of Underlying (#) (2) | or Base ($/Sh) | Value of ($) (3) | ||||||||||||||||||||||||
Smith | 1/19/2018 | — | — | — | — | 40,000 | 8.45 | 146,000 | ||||||||||||||||||||||||
— | 31,500 | 63,000 | 157,500 | — | — | — | — | |||||||||||||||||||||||||
Thomas | 1/19/2018 | — | — | — | — | 20,000 | 8.45 | 73,000 | ||||||||||||||||||||||||
— | 10,750 | 21,500 | 53,750 | — | — | — | — | |||||||||||||||||||||||||
Cantrell | 1/19/2018 | — | — | — | — | 20,000 | 8.45 | 73,000 | ||||||||||||||||||||||||
— | 10,750 | 21,500 | 53,750 | — | — | — | — | |||||||||||||||||||||||||
Davis | 1/19/2018 | — | — | — | — | 20,000 | 8.45 | 73,000 | ||||||||||||||||||||||||
— | 10,150 | 20,300 | 50,750 | — | — | — | — | |||||||||||||||||||||||||
Oakey | 1/19/2018 | — | — | — | — | 20,000 | 8.45 | 73,000 | ||||||||||||||||||||||||
— | 10,750 | 21,500 | 53,750 | — | — | — | — |
Outstanding Equity Awards
In 2009, the Company adopted the Community Bankers Trust Corporation 2009 Stock Incentive Plan. The plan is to be used to grant restricted stock awards, stock options in the form of incentive stock options and non-statutory stock options, stock appreciation rights and other stock-based awards to employees and directors of the Company. As adopted, the plan makes available up to 2,650,000 shares for issuance to participants under the plan.
The following table shows outstanding stock awards and option awards held by theCommunity Bankers Trust named executive officers as of December 31, 2018. The Company has not adopted an objectives-based equity incentive plan under which it makes option awards or stock awards.
Options Awards | Stock Awards | |||||||||||||||||||||
Name | Number of Securities (#) Exercisable | Number of (#) Unexercisable | Option ($) | Option | Number of (#) | Market Value ($) | ||||||||||||||||
Smith | 20,000 | — | 2.78 | 5/20/2020 | — | — | ||||||||||||||||
50,000 | — | 1.25 | 10/20/2021 | — | — | |||||||||||||||||
56,250 | 18,750 | (1) | 4.37 | 1/16/2025 | — | — | ||||||||||||||||
20,000 | 20,000 | (2) | 5.07 | 1/22/2026 | — | — | ||||||||||||||||
18,750 | 56,250 | (3) | 7.40 | 1/20/2027 | — | — | ||||||||||||||||
— | 40,000 | (4) | 8.45 | 1/19/2028 | — | — | ||||||||||||||||
Thomas | 3,750 | — | 3.80 | 1/17/2024 | — | — | ||||||||||||||||
5,000 | 5,000 | (1) | 4.37 | 1/16/2025 | — | — | ||||||||||||||||
5,000 | 10,000 | (2) | 5.07 | 1/22/2026 | — | — | ||||||||||||||||
5,000 | 15,000 | (3) | 7.40 | 1/20/2027 | — | — | ||||||||||||||||
— | 20,000 | (4) | 8.45 | 1/19/2028 | — | — | ||||||||||||||||
Cantrell | 15,000 | — | 2.86 | 1/17/2023 | — | — | ||||||||||||||||
15,000 | — | 3.80 | 1/17/2024 | — | — | |||||||||||||||||
15,000 | 5,000 | (1) | 4.37 | 1/16/2025 | — | — | ||||||||||||||||
10,000 | 10,000 | (2) | 5.07 | 1/22/2026 | — | — | ||||||||||||||||
5,000 | 15,000 | (3) | 7.40 | 1/20/2027 | — | — | ||||||||||||||||
— | 20,000 | (4) | 8.45 | 1/19/2028 | — | — | ||||||||||||||||
Davis | 10,000 | — | 1.25 | 1/19/2022 | — | — | ||||||||||||||||
10,000 | — | 2.86 | 1/17/2023 | — | — | |||||||||||||||||
10,000 | — | 3.80 | 1/17/2024 | — | — | |||||||||||||||||
15,000 | 5,000 | (1) | 4.37 | 1/16/2025 | — | — | ||||||||||||||||
10,000 | 10,000 | (2) | 5.07 | 1/22/2026 | — | — | ||||||||||||||||
5,000 | 15,000 | (3) | 7.40 | 1/20/2027 | — | — | ||||||||||||||||
— | 20,000 | (4) | 8.45 | 1/19/2028 | — | — | ||||||||||||||||
Oakey | 20,000 | — | 2.78 | 5/20/2020 | — | — | ||||||||||||||||
25,000 | — | 1.25 | 1/19/2022 | — | — | |||||||||||||||||
15,000 | — | 2.86 | 1/17/2023 | — | — | |||||||||||||||||
15,000 | — | 4.37 | 1/17/2024 | — | — | |||||||||||||||||
15,000 | 5,000 | (1) | 5.07 | 1/16/2025 | — | — | ||||||||||||||||
10,000 | 10,000 | (2) | 7.40 | 1/22/2026 | — | — | ||||||||||||||||
5,000 | 15,000 | (3) | 7.40 | 1/20/2027 | — | — | ||||||||||||||||
— | 20,000 | (4) | 8.45 | 1/19/2028 | — | — |
Option Exercises and Stock Vested
There were no exercises of stock options by any of the named executive officers during the year ended December 31, 2018. In addition, no restricted stock awards held by any such officers vested during the year ended December 31, 2018, and there are no such outstanding awards.
Post-Employment Compensation
401(k) Employee Savings Plan
The Company sponsors a 401(k) plan for all of its eligible employees. The executive officers of the Company participate in the 401(k) plan on the same basis as all other eligible employees of the Company.
Pension Plan and Supplemental Executive Retirement Plan
The Bank maintains a non-contributory defined benefit pension plan for all full-time employees who are 21 years of age or older and who(other than Ms. Davis) each have completed one year of eligibility service. The plan, which was a benefit available only to employees of the Bank prior to the merger of BOE Financial with and into the Company, was frozen to new entrants prior to the merger. Effective December 31, 2010, the Company froze the plan benefits for all participants in the pension plan.
Mr. Thomas is a participant in this plan. Benefits payable under the plan are based on years of credited service, average compensation over the highest consecutive five years, and the plan’s benefit formula (1.60% of average compensation times years of credited service up to 20 years, plus 0.75% of average compensation times years of credited service in excess of 20 years, plus 0.65% of average compensation in excess of Social Security Covered Compensation times years of credited service up to a maximum of 35 years). For 2018, the maximum allowable annual benefit payable by the plan at age 65 (the plan’s normal retirement age) was $220,000 and the maximum compensation covered by the plan was $275,000. Reduced early retirement benefits are payable on or after age 55 upon completion of 10 years of credited service. Amounts payable under the plan are not subject to reduction for Social Security benefits.
In 2006, the Bank adopted a non-tax qualified supplemental executive retirement plan (“SERP”) for certain executives to supplement the benefits that such executives can receive under the Bank’s other retirement programs and social security. Mr. Thomas is a participant in the SERP. Retirement benefits under the SERP vary by individual and are payable at age 65 for 15 years or life, whichever is longer. In the event of termination prior to age 65, annual benefits commence immediately and are payable for 15 years only, and are equal to the full retirement benefit discounted by 5.0% annually for each year that such benefits commence prior to age 65. No benefits are payable in the event that termination is for cause.
The following table provides the present value of each named executive officer’s total accumulated benefit under the pension plan and the SERP as of December 31, 2018.
Name | Plan Name | Number of Years (#) | Present Value of ($) | Payments ($) | ||||||||||||
Smith | — | — | — | — | ||||||||||||
Thomas | Pension Plan | 20 | 444,635 | — | ||||||||||||
SERP | — | 283,117 | — | |||||||||||||
Cantrell | — | — | — | — | ||||||||||||
Davis | — | — | — | — | ||||||||||||
Oakey | — | — | — | — |
Non-Qualified Defined Contribution Retirement Plan
In 2016, the Company commenced a non-qualified defined contribution retirement plan for each of the named executive officers. The purpose of the plan is to enhance the retirement benefits that the Company provides to each officer and to recognize each officer for overall performance through additional incentive-based compensation. The terms of the plan are set forth in a Performance Driven Retirement Agreement (the “Retirement Agreement”) between the Company and each officer.
Under each Retirement Agreement, the Company will determine annual contributions to an individual deferred account for the officer on a discretionary basis. For all contributions made to the plan to date, the Company has based the amount of the contributions on the payouts made under its annual incentive plan. The range of the Company’s contributions to the deferred accounts for the named executive officers have been as follows:
All contributions are fully vested when credited.
The Retirement Agreement provides that all benefits will be forfeited by an officer in the event that the officer separates from the Company and joins a competing entity within two years from the separation date. Early termination benefits are payable commencing at age 65, and normal retirement benefits are payable at the later of age 65 and separation of service. Change in control benefits are payable upon a separation of service following a change in control and such benefits will be reduced as necessary in order to complyemployment agreement with the limitations of IRC Section 280G.Community Bankers Trust. The Retirement Agreement also provides for the payment of benefits in the event of the officer’s death during employment.
The following table provides specific information for each named executive officer for the non-qualified defined contribution retirement plan as of December 31, 2018.
Name | Executive ($) | Registrant ($) (1) | Aggregate ($) (2) | Aggregate ($) | Aggregate ($) (3) | |||||||||||||||
Smith | — | 252,000 | 20,355 | — | 793,883 | |||||||||||||||
Thomas | — | 32,250 | 1,466 | — | 71,245 | |||||||||||||||
Cantrell | — | 43,000 | 2,705 | — | 114,987 | |||||||||||||||
Davis | — | 40,600 | 2,516 | — | 107,566 | |||||||||||||||
Oakey | — | 43,000 | 2,705 | — | 114,987 |
Change in Control Agreements
In 2016, the Company entered into a change in control arrangement with each of the named executive officers. The terms of each arrangementemployment agreements are set forth in a Change in Control Employment Agreement (the “CIC Agreement”) that is substantially identical for the five individual officers.
The CIC Agreementidentical. Each agreement is for a term that expires on December 31, 2025, with automatic renewals on that date and every 10th anniversary of that date, unless non-renewal notice is sent by the September 30 prior to the applicable December 31 ten-year renewal date. The CIC AgreementEach agreement provides for the employment of the officer following a “change in control”, as (as defined in the CIC Agreement,each agreement) of Community Bankers Trust for a period of two years. During such period, the officer will receive a base salary that is equal to at least the same base salary that the officer received for the 12 months before the change in control. In addition, the officer will be entitled to participateparticipation opportunities in incentive, savings, retirement and benefit plans at the same level as other similarly situated officers, andwith such participation opportunities to be at least at the level ofas favorable as the officer’s participation opportunities in such plans during the six months prior to the change in control.
The CIC Agreement provides for specified payments Also during such period, the officer will be entitled to participation in welfare benefit plans, fringe benefits and vacation pay, at the same level as other similarly situated officers, with such benefits to be at least as favorable, in the aggregate, as the most favorable of such plans during the six months prior to the officer under certain termination scenarios duringchange in control, with six months continuation of family hospitalization, health and dental plan participation after retirement or expiration of the two-year employmenttwo year period.
If the officer is terminated “without cause” or terminates for “good reason”, each as (as defined in the CIC Agreement,each agreement), in each case within two years following a change in control of Community Bankers Trust, the officer will receive (i) as “accrued obligations,” salary, bonuses (including, but not limited to, bonus for the most recently completed year, and a pro-rated portion thereof for the current year), incentives and benefits that would be owed through the date of termination, (ii) a salary continuation benefit that equals a multiple3.0 times the sum of the officer’s highest salary during the 12 months prior to termination plus the officer’s highest annual bonus during the two years prior to termination, minus $1.00, (iii) continuation of welfare benefits, in which the officer or his dependents were participating immediately prior to the termination, for 12 months, and (iv) outplacement services in the amount of up to $25,000. For Messrs. Smith, Thomas, Cantrell and Oakey, the salary continuation benefit is 3.00 times such salary and bonus minus $1.00 and, for Ms. Davis, the salary continuation benefit is 2.00 times such salary and bonus minus $1.00. (William E. Saunders, Jr., the Company’s other executive officer, also has a CIC Agreement with a salary continuation benefit that is 2.00 times salary and bonus minus $1.00.) If the officer’s termination is due to “death” or “disability”, each as (as defined in the CIC Agreement,each agreement), in each case within two years following a change in control of Community Bankers Trust, the officer will receive salary, bonuses, incentives and benefits that would be owed through the date of termination, three months of base salary and continuation of benefits (for dependents only in the case of death) for 12 months.
The CIC AgreementIn connection with the merger, Community Bankers Trust has agreed to terminate each officer’s change in control employment agreement immediately prior to the effective time of the merger in exchange for a lump sum payment equal to the amount that such officer would be due under the agreement if a change in control of Community Bankers Trust occurred and the officer experienced a qualifying termination of employment. Assuming the effective date of the merger and a qualifying termination of employment of each named executive officer occurred on July 15, 2021, the approximate lump sum payments for the named executive officers would be as follows: Mr. Smith, $1,573,706; Mr. Thomas, $786,568; Mr. Cantrell, $789,158; and Mr. Oakey, $785,601; provided, however, that each agreement provides that the amountschange in control payments and benefits payable to the officer will be reduced as necessary, and as may be directed by the officer, so that no such payment or benefit will be nondeductible as an “excess parachute payment” under Section 280G of the Code. Accordingly, the aggregate change in control severance payments and benefits payable to the named executive officers pursuant to the merger are expected to be limited to approximately the following amounts: Mr. Smith, $1,629,040; Mr. Thomas, $844,696; Mr. Cantrell, $850,057; and Mr. Oakey, $707,388.
Community Bankers Trust 2021 Bonus Payments
Immediately prior to the effective time of the merger, in satisfaction of the “accrued obligations” payment provisions described above with respect to the change in control employment agreements, Community Bankers Trust expects to make full-year (rather than pro-rata) bonus payments for the current year based on the achievement of the greater of actual (not to exceed “maximum”) or “target” level performance objectives for 2021 pursuant to the Community Bankers Trust annual objectives-based incentive plan in amounts not to exceed the following: Mr. Smith, $165,375; Mr. Thomas, $56,563; Mr. Cantrell, $56,750; and Mr. Oakey, $56,563. If not for the merger, such bonus amounts would be determined based on full-year 2021 performance against preestablished objectives and would be paid in early 2022.
Employment Agreement between Rex L. Smith, III and United Bank Following the Merger
Mr. Smith has signed a new employment agreement with United Bank, which will be effective on the effective date of the merger, to be employed as a regional president of United Bank for legacy Essex Bank locations in Virginia. Mr. Smith’s new employment agreement with United Bank has a three-year term and provides for an initial annual base salary of $350,000. During the term of the agreement, Mr. Smith will be entitled to receive an annual retention bonus of $100,000 and an annual incentive bonus of $74,250. Mr. Smith will be entitled to participate in all benefit plans (including equity plans) in the same manner as similarly situated employees and to the use of a company-owned automobile under United Bank’s policy for use of company cars as then in effect. Mr. Smith will also be entitled to reimbursement of up to $4,916 per one-year period for long-term care insurance premiums. In addition, if Mr. Smith’s employment terminates within the first five years after the effective time of the merger, United Bank will pay Mr. Smith an amount equal to the monthly cost of his medical and dental coverage, for himself and his spouse, under the current or any successor health plan provided by United Bank to its employees until the earlier of (i) the end of such five-year period, or (ii) the date on which Mr. Smith obtains medical or dental coverage with any subsequent employer.
In the event Mr. Smith’s employment is terminated by United Bank without “cause” (as defined in the agreement) or voluntarily by Mr. Smith for certain limited reasons specified in the agreement, Mr. Smith will be entitled to receive a lump sum payment equal to the remaining base salary payments he would otherwise receive for the remaining term of the agreement and the payments described above respecting post-termination medical and dental coverage. All payments are subject to reduction if needed to avoid application of the excise tax under Code Section 4999.
Mr. Smith will be subject to customary post-employment non-competition, non-piracy and non-solicitation covenants under the agreement for a period of one year beginning after termination of his employment with United Bank for any reason. The geographic area of the non-competition restriction will be limited to 30 miles from United Bank’s main office.
Community Bankers Trust Non-Qualified Defined Contribution Retirement Plan
The Community Bankers Trust named executive officers are participants in the Community Bankers Trust non-qualified defined contribution retirement plan. The purpose of the plan is to enhance the retirement benefits that Community Bankers Trust provides to each officer and to recognize each officer for overall performance through additional incentive-based compensation. The terms of the plan are set forth in a performance driven retirement agreement between Community Bankers Trust and each officer. Under each retirement agreement, Community Bankers Trust determines annual contributions to an individual deferred account for the officer on a discretionary basis. For all contributions made to the plan to date, Community Bankers Trust has based the amount of the contributions on the payouts made under its annual incentive plan. All contributions are fully vested when credited.
Early termination benefits are payable commencing at age 65, and normal retirement benefits are payable at the later of age 65 and “separation from service” (as defined in each agreement). In the event of a separation from service of a named executive officer within 24 months following “change in control” (as defined in each agreement) of Community Bankers Trust, such officer will be entitled to receive the discounted present value of the projected account balance under the plan in a lump sum, subject to any applicable six month delay under the agreements and Code Section 409A. Pursuant to each agreement, such benefits will be reduced as necessary in order to comply with the limitations of IRC Section 280G. 280G of the Code. See “– Certain Compensation for Community Bankers Trust Named Executive Officers – Golden Parachute Compensation.”
In addition, Community Bankers Trust expects to make contributions immediately prior to the effective time of the merger for the benefit of the named executive officers based on the achievement of the greater of actual (not to exceed “maximum”) or “target” level performance objectives for 2021 pursuant to the Community Bankers Trust performance-driven retirement agreements in amounts not to exceed the following: Mr. Smith, $264,600; Mr. Thomas, $33,938; Mr. Cantrell, $45,400; and Mr. Oakey, $45,250. If not for the merger, the amount of such contributions would be determined based on full-year 2021 performance against preestablished objectives and would be made in early 2022 with the contribution effective as of December 31, 2021.
Insurance and Indemnification
For a period of six years after the effective time of the merger, United Bankshares has agreed to provide, to the fullest extent permitted by applicable law and Community Bankers Trust’s articles of incorporation and bylaws, indemnification and advancement of reasonable expenses to each of Community Bankers Trust’s directors, officers and employees against all losses that are incurred in connection with their service with Community Bankers Trust and pertaining to any matter existing at or before the effective time of the merger. In addition, for a period of six years from the effective time of the merger, United Bankshares has agreed to provide director’s and officer’s liability insurance with respect to claims against such directors and officers arising from facts or events that occurred before the effective time of the merger, which insurance will contain at least the same coverage and amounts, and contain terms and conditions no less advantageous, as that coverage currently provided by Community Bankers Trust. In no event will United Bankshares be required to expend, on an annual basis, more than 200% of the current annual amount expended by Community Bankers Trust to maintain such directors’ and officers’ insurance coverage. In lieu of the foregoing, United Bankshares may obtain at or prior to the effective time a six-year “tail” policy under Community Bankers Trust’s existing directors’ and officers’ insurance policy providing equivalent coverage to that described in the preceding sentence if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed 200% of the current annual amount expended by Community Bankers Trust to maintain such directors and officers insurance coverage. See the section entitled “The Merger Agreement – Indemnification; Directors’ and Officers’ Insurance” beginning on page 68.
Advisory Board
United Bankshares will invite all members of the Community Bankers Trust board of directors to serve on United Bank’s Richmond Advisory Board or another appropriate advisory board maintained by United Bankshares or United Bank for the region in which the individual resides.
Certain Compensation for Community Bankers Trust Named Executive Officers
The Company’s currentfollowing table sets forth the information required by Item 402(t) of Regulation S-K promulgated by the SEC regarding certain merger-related compensation arrangementsthat the Community Bankers Trust named executive officers may be entitled to receive pursuant to their existing agreements with Community Bankers Trust. The amounts below were calculated assuming (i) that the effective date of the merger and a qualifying termination of employment of each named executive officer occurred on July 15, 2021, and (ii) a per share value of Community Bankers Trust common stock of $11.90, which is the average closing price per share of Community Bankers
Trust common stock as quoted on The Nasdaq Capital Market over the first five business days following the first public announcement of the merger on June 3, 2021. The amounts below do not provide forinclude (i) the Companyvalue of benefits in which the named executive officers are vested without regard to make “gross-up” payments that would cover the reimbursementoccurrence of excise taxesa change in control, or (ii) certain compensation actions that may ariseoccur following the effective time of the merger, including but not limited to any payments made or benefits received under Mr. Smith’s new employment agreement with United Bankshares. The amounts below also do not reflect the anticipated reductions in payments and benefits so that no such payment or benefit will be nondeductible as an “excess parachute payment” under Section 280G. The CIC Agreement similarly does not contain such a “gross-up” provision. The CIC Agreement also contains a “clawback” provision consistent with the requirements of federal law and the listing standards280G of the Nasdaq Stock Market.
Potential Payments Upon Termination
The table below quantifiesCode. As described above, the expectedaggregate change in control severance payments and benefits payable to the named executive officers in different, specified employment termination circumstances. pursuant to the merger are expected to be limited to approximately the following amounts: Mr. Smith, $1,629,040; Mr. Thomas, $844,696; Mr. Cantrell, $850,057; and Mr. Oakey, $707,388.
The table does not include benefitsmerger-related compensation payable to Mr. Thomas under the pension plan and the supplemental executive retirement plan. Information with respect to the post-employment benefits under those plans is presented above.
The information below assumes that termination of employment occurred on December 31, 2018. The Company does not have any arrangements with any of theCommunity Bankers Trust named executive officers that provideis subject to a non-binding advisory vote of the Community Bankers Trust shareholders, as described under “Proposal No. 2 – Advisory (Non-Binding) Vote on Certain Merger-Related Compensation for payment in employment termination circumstances other than those events presented in the table.Community Bankers Trust Named Executive Officers” beginning on page 31.
Golden Parachute Compensation
Within 24 Months Following a Change in Control | ||||||||||||||||||
Name | Benefit | Termination Due to Death ($) | Termination Cause or for Good Reason ($) | Termination Due to Death ($) | Termination Due to ($) | |||||||||||||
Smith | Payment under CIC Agreement (1) | — | 1,250,157 | 105,000 | 105,000 | |||||||||||||
Payment under Retirement Agreement (2) | 1,595,005 | 793,883 | 1,595,005 | 793,883 | ||||||||||||||
Health care benefits continuation (3) | — | — | 6,960 | 6,960 | ||||||||||||||
Total Value | 1,595,005 | 2,044,040 | 1,706,965 | 905,843 | ||||||||||||||
Thomas | Payment under CIC Agreement (1) | — | 746,588 | 53,750 | 53,750 | |||||||||||||
Payment under Retirement Agreement (2) | 379,282 | 117,585 | 379,282 | 71,245 | ||||||||||||||
Health care benefits continuation (3) | — | — | 6,960 | 6,960 | ||||||||||||||
Total Value | 379,282 | 864,173 | 439,992 | 131,955 | ||||||||||||||
Cantrell | Payment under CIC Agreement (1) | — | 656,594 | 53,750 | 53,750 | |||||||||||||
Payment under Retirement Agreement (2) | 509,124 | 114,987 | 509,124 | 114,987 | ||||||||||||||
Health care benefits continuation (3) | — | — | 6,960 | 6,960 | ||||||||||||||
Total Value | 509,124 | 771,581 | 569,834 | 175,697 |
Within 24 Months Following a Change in Control | ||||||||||||||||||
Name | Benefit | Termination Due to Death ($) | Termination Cause or for Good Reason ($) | Termination Due to Death ($) | Termination Due to ($) | |||||||||||||
Davis | Payment under CIC Agreement (1) | — | 516,868 | 50,750 | 50,750 | |||||||||||||
Payment under Retirement Agreement (2) | 687,003 | 107,566 | 687,003 | 107,566 | ||||||||||||||
Health care benefits continuation (3) | — | — | 600 | 600 | ||||||||||||||
Total Value | 687,003 | 624,434 | 738,353 | 158,916 | ||||||||||||||
Oakey | Payment under CIC Agreement (1) | — | 605,509 | 53,750 | 53,750 | |||||||||||||
Payment under Retirement Agreement (2) | 946,373 | 114,987 | 946,373 | 114,987 | ||||||||||||||
Health care benefits continuation (3) | — | — | 600 | 600 | ||||||||||||||
Total Value | 946,373 | 720,496 | 1,000,723 | 169,337 |
Name | Cash(1) | Equity (2) | Pension/ NQDC (3) | Perquisites/ Benefits | Tax Reimbursement | Other | Total | |||||||||||||||||||||
Rex L. Smith | $ | 1,739,081 | $ | 403,418 | $ | 21,404 | $ | — | $ | — | $ | — | $ | 2,163,903 | ||||||||||||||
Bruce E. Thomas | $ | 843,130 | $ | 201,715 | $ | 180,781 | $ | — | $ | — | $ | — | $ | 1,225,626 | ||||||||||||||
Jeff R. Cantrell | $ | 845,908 | $ | 201,715 | $ | 226,548 | $ | — | $ | — | $ | — | $ | 1,274,171 | ||||||||||||||
John M. Oakey, III | $ | 842,164 | $ | 201,715 | $ | 445,589 | $ | — | $ | — | $ | — | $ | 1,489,468 |
1) | The |
2) | The |
3) | The amounts represent the discounted present value of the projected account balance under the Community Bankers Trust non-qualified defined contribution retirement plan as of |
Accounting Treatment of the Merger
The merger will be accounted for using acquisition accounting, in accordance with GAAP, for accounting and financial reporting purposes. Under acquisition accounting, the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Community Bankers Trust as of the effective time of the merger will be recorded at their respective fair values and added to those of United Bankshares. Any excess of purchase price over the fair values is recorded as goodwill. Consolidated financial statements of United Bankshares issued after the merger would reflect these fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of Community Bankers Trust.
The following is a summary of the material provisions of the merger agreement. The following description of the merger agreement is subject to, and qualified in its entirety by reference to, the merger agreement, which is attached to this prospectus and proxy statement as Appendix A and is incorporated by reference into this document. This summary may not contain all of the information about the merger agreement that may be important to you. You are urged to read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.
Each of the United Bankshares board of directors and the Community Bankers Trust board of directors has approved and adopted the merger agreement, which provides for the merger of Community Bankers Trust with and into United Bankshares. United Bankshares will be the surviving entity in the merger.
Each share of Community Bankers Trust common stock issued and outstanding immediately prior to the completion of the merger (other than shares held by United Bankshares and its subsidiaries, in each case except for shares held by them in a fiduciary capacity or as a result of debts previously contracted) will be converted into the right to receive 0.3173 shares of United Bankshares common stock, which is referred to herein as the exchange ratio. If the number of shares of common stock of United Bankshares changes before the merger is completed because of a reclassification, recapitalization, stock dividend, stock split, reverse stock split or similar event, then a proportionate adjustment will be made to the exchange ratio.
The United Bankshares articles of incorporation and the United Bankshares bylaws as in effect immediately prior to the completion of the merger will be the articles of incorporation and bylaws of the surviving entity.
After the effective time of the merger and as part of the same overall transaction, Essex Bank, a Virginia banking corporation and wholly-owned subsidiary of Community Bankers Trust, for no additional consideration and pursuant to the agreement and plan of merger dated June 2, 2021, attached as Exhibit 99.4 to the registration
statement on Form S-4 of which this prospectus and proxy statement is a part, will merge with and into United Bank, a Virginia banking corporation, and a wholly-owned subsidiary of United Bankshares, or the bank merger. As a result of the bank merger, the separate existence of Essex Bank will cease and the corporate existence of United Bank, as the merged bank, shall continue unaffected and unimpaired by the bank merger and the merged bank shall be deemed to be the same business and corporate entity as each of Essex Bank and United Bank.
Treatment of Community Bankers Trust Stock Options
Under the merger agreement, at the effective time of the merger, each stock option to buy Community Bankers Trust common stock granted under a Community Bankers Trust equity compensation plan that is outstanding and not yet exercised immediately prior to the merger, whether vested or unvested, will vest pursuant to the terms thereof and will be converted into an option to acquire, on the same terms and conditions as were applicable under such stock option, the number of shares of United Bankshares common stock equal to (a) the number of shares of Community Bankers Trust common stock subject to such stock option multiplied by (b) 0.3173. Such product will be rounded down to the nearest whole number. The exercise price per share (rounded up to the next whole cent) of each United Bankshares stock option issued for a Community Bankers Trust stock option will equal (y) the exercise price per share of shares of Community Bankers Trust common stock that were purchasable pursuant to such Community Bankers Trust stock option divided by (z) 0.3173.
Each Community Bankers Trust stock option that is intended to be an “incentive stock option” (as defined in Section 422 of the Code) will be adjusted in accordance with the requirements of Section 424 of the Code and all Community Bankers Trust stock options will be adjusted in a manner that maintains the options’ exemption from Section 409A of the Code. At or prior to the effective time of the merger, Community Bankers Trust must use its reasonable best efforts to obtain any necessary consents from optionees with respect to the Community Bankers Trust equity compensation plans to permit replacement of the outstanding Community Bankers Trust stock options by United Bankshares and to permit United Bankshares to assume the Community Bankers Trust equity compensation plans. Community Bankers Trust must take all action necessary to amend the Community Bankers Trust equity compensation plans to eliminate automatic grants or awards thereunder following the effective time. At the effective time of the merger, United Bankshares will assume the Community Bankers Trust equity compensation plans, but such assumption will only be with respect to the United Bankshares replacement options granted pursuant to the merger agreement and United Bankshares will have no obligation to make any additional grants or awards under the Community Bankers Trust equity compensation plans.
Treatment of Community Bankers Trust Restricted Stock Units
Under the merger agreement, at the effective time of the merger, each restricted stock unit granted under a Community Bankers Trust stock plan that is outstanding immediately prior to the effective time of the merger shall vest only in accordance with the formula and other terms of the such stock plan, be cancelled and converted automatically into the right to receive shares of United common stock based on the 0.3173 exchange ratio. United shall issue the consideration for such restricted stock unit less applicable tax withholdings within five business days following the effective time of the merger. Any unvested restricted stock units that do not vest in accordance with a Community Bankers Trust equity compensation plan will be converted into restricted stock units of United Bankshares, as adjusted to take into account the exchange ratio.
The respective obligations of United Bankshares and Community Bankers Trust to consummate the merger are subject to the satisfaction of certain mutual conditions, including the following:
The shareholders of Community Bankers Trust approve the merger agreement and the transactions contemplated thereby, described in this prospectus and proxy statement, at the meeting of shareholders for Community Bankers Trust;
All regulatory approvals required by law to consummate the transactions contemplated by the merger agreement are obtained from the Federal Reserve, the Virginia Bureau of Financial Institutions and the other appropriate federal and/or state regulatory agencies, all waiting periods after such approvals required by law or regulation expire and no such approvals contain any conditions or restrictions that the United Bankshares Board determines, using reasonable good faith judgment, would be a materially financially burdensome regulatory condition;
The registration statement (of which this prospectus and proxy statement is a part) registering shares of United Bankshares common stock to be issued in the merger is declared effective and not subject to a stop order and no proceedings suspending the effectiveness of the registration statement shall have been initiated or threatened by the SEC;
The absence of any statute, rule, regulation, judgment, decree, injunction or other order being enacted, issued, promulgated, enforced or entered by a governmental authority effectively prohibiting consummation of the merger; and
Authorization for the listing on Nasdaq of the shares of United Bankshares common stock to be issued in the merger, subject to official notice of issuance.
In addition to the mutual conditions described above, United Bankshares’ obligation to consummate the merger is subject to the satisfaction, unless waived, of the following other conditions:
The representations and warranties of Community Bankers Trust made in the merger agreement are true and correct as of the date of the merger agreement and as of the effective time of the merger and United Bankshares receives a certificate of the chief executive officer and the chief financial officer of Community Bankers Trust to that effect;
Community Bankers Trust performs in all material respects all obligations required to be performed by it under the merger agreement at or prior to the effective time of the merger and delivers to United Bankshares a certificate of its chief executive officer and chief financial to that effect;
United Bankshares shall have received an opinion of Bowles Rice LLP, counsel to United Bankshares, dated as of the effective time of the merger, that the merger will be treated as a “reorganization” under Section 368 of the Code; and
Neither Rex L. Smith, III, President and Chief Executive Officer of Community Bankers Trust and Essex Bank nor United Bank shall have taken any action on or before the effective time of the merger to materially breach or to cancel or terminate the employment agreement dated June 2, 2021 regarding Mr. Smith’s employment with United Bank.
In addition to the mutual conditions described above, Community Bankers Trust’s obligation to complete the merger is subject to the satisfaction, unless waived, of the following other conditions:
The representations and warranties of United Bankshares made in the merger agreement are true and correct as of the date of the merger agreement and as of the effective time of the merger and Community Bankers Trust receives a certificate of the chief executive officer and chief financial officer of United Bankshares to that effect;
United Bankshares performs in all material respects all obligations required to be performed by it under the merger agreement at or prior to the effective time of the merger and delivers to Community Bankers Trust a certificate of its chief executive officer and chief financial officer to that effect; and
Community Bankers Trust shall have received an opinion of Williams Mullen, counsel to Community Bankers Trust, dated as of the effective time of the merger, that the merger will be treated as a “reorganization” under Section 368 of the Code.
Representations and Warranties
The merger agreement contains representations and warranties by United Bankshares and Community Bankers Trust. These representations and warranties are qualified by items previously disclosed and a materiality standard, which means that neither United Bankshares nor Community Bankers Trust is in breach of a representation or warranty unless the existence of any fact, event or circumstance, individually, or taken together with other facts, events or circumstances has had or is reasonably likely to have a material adverse effect on United Bankshares or Community Bankers Trust. These include, among other things, representations and warranties by United Bankshares and Community Bankers Trust to each other as to:
Organization and good standing of each entity and its subsidiaries;
Each entity’s capital structure;
Each entity’s power and authority relative to the execution and delivery of, and performance of its obligations under, the merger agreement;
Litigation and related matters;
Consents and approvals required;
Absence of conflicts between each entity’s obligations under the merger agreement and its charter documents and contracts to which it is a party or by which it is bound;
Accuracy of documents, including financial statements and other reports, filed by each entity with the SEC;
Absence of material adverse changes since December 31, 2020;
Regulatory matters;
Compliance with applicable laws, the Sarbanes-Oxley Act and accounting controls;
Absence of defaults under material contracts and agreements;
Employee benefit plans;
Absence of environmental problems;
Tax matters;
Absence of brokerage commissioners, except as disclosed for financial advisors;
Insurance matters;
Opinions of the parties’ respective financial advisors;
Allowance for loan and lease losses; and
Computer systems and technologies.
In addition to the representations and warranties listed above, Community Bankers Trust also made representations and warranties to United Bankshares with respect to the following:
Labor matters;
Risk management instruments;
The taking of all actions necessary to exempt the merger agreement from any takeover laws;
Books and records being fully and accurately maintained and fairly presenting events and transactions;
Loan matters;
Investment securities;
Assets; and
Investment advisory services.
No representation or warranty contained in the merger agreement shall be deemed untrue or incorrect, and no party hereto shall be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, event or circumstance unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in the merger agreement has had or is reasonably likely to have a “material adverse effect” on the party making the representation.
For the purposes of the merger agreement, a “material adverse effect” means any event, change, effect, development, state of facts, condition, circumstances or occurrence that, individually or in the aggregate, (i) is material and adverse to the financial position, results of operations or business of United Bankshares and its subsidiaries taken as a whole or Community Bankers Trust and its subsidiaries taken as a whole, respectively, or (ii) would materially impair the ability of either United Bankshares or Community Bankers Trust to perform its obligations under the merger agreement or otherwise materially threaten or materially impede the consummation of the merger and the other transactions contemplated by the merger agreement; provided, that the impact of the following items shall not be deemed to be a material adverse effect:
Changes in tax, banking and similar laws of general applicability or interpretations thereof by courts or governmental authorities (including COVID-19 pandemic measures), except to the extent that such changes have a disproportionate impact on United Bankshares or Community Bankers Trust, as the case may be, relative to the overall effects on the banking industry;
Changes in GAAP or regulatory accounting requirements applicable to banks and their holding companies generally, except to the extent that such changes have a disproportionate impact on United Bankshares or Community Bankers Trust, as the case may be, relative to the overall effects on the banking industry;
Changes in economic conditions affecting financial institutions generally, including changes in market interest rates, credit availability and liquidity, and price levels or trading volumes in securities markets, except to the extent that such changes have a disproportionate impact on United Bankshares or Community Bankers Trust, as the case may be, relative to the overall effects on the banking industry;
Any modifications or changes to valuation policies and practices in connection with the merger in accordance with GAAP;
Actions and omissions of United Bankshares or Community Bankers Trust taken with the prior written consent of the other in contemplation of the transactions contemplated by the merger agreement;
Any outbreak or escalation of hostilities or war (whether or not declared) or any act of terrorism, or any earthquakes, hurricanes, tornados or other natural disasters, or any national or global epidemic, pandemic or disease outbreak (including any outbreaks, epidemics or pandemics relating to COVID-19, or any variants or mutations thereof, or any other viruses, and the governmental and other responses thereto), or the material worsening of such conditions threatened or existing as of the date of the merger agreement (including any such changes arising out of the COVID-19 pandemic or any COVID-19 pandemic measures);
Failure of United Bankshares or Community Bankers Trust to meet any internal financial forecasts or any earnings projections (whether made by United Bankshares or Community Bankers Trust or any other person);
The public disclosure of the merger agreement and the impact thereof on relationships with customers or employees; or
The effects of compliance with the merger agreement on the operating performance of the parties, including, expenses incurred by the parties in consummating the transactions contemplated by the merger agreement.
Prior to the effective time of the merger, any provision of the merger agreement may be waived by the party benefited by the provision or amended or modified by an agreement in writing between the parties, except that, after the special meeting, the merger agreement may not be amended if it would violate the Virginia Stock Corporation Act.
Indemnification; Directors’ and Officers’ Insurance
United Bankshares has agreed to indemnify the directors, officers and employees of Community Bankers Trust and its subsidiaries for a period of six years from the effective time of the merger to the fullest extent that Community Bankers Trust or any of its subsidiaries is permitted or required to indemnify (and advance expenses to) its directors and officers under the laws of the Commonwealth of Virginia, the articles of incorporation and bylaws of Community Bankers Trust and/or any of its subsidiaries and any indemnification agreements in effect between Community Bankers Trust and/or any of its subsidiaries and any director, officer or employee thereof. Additionally, United Bankshares has agreed to maintain in effect (i) the current indemnification provisions of the articles of incorporation and bylaws of Community Bankers Trust and/or its subsidiaries and (ii) any indemnification agreements in place with any directors, officers or employees of Community Bankers Trust and/or its subsidiaries, for a period of six years following the effective time of the merger.
United Bankshares has also agreed for a period of six years from the effective time of the merger to provided that portion of director’s and officer’s liability insurance that serves to reimburse the present and former officers and directors of Community Bankers Trust or any of its subsidiaries (determined as of the effective time) (as opposed to Community Bankers Trust) with respect to claims against such directors and officers arising from facts or events which occurred before the effective time, which insurance shall contain at least the same coverage and amounts, and contain terms and conditions no less advantageous, as that coverage currently provided by Community Bankers Trust. United Bankshares is not required to expend, on an annual basis, more than 200% of the current amount expended by Community Bankers Trust to maintain or procure such directors and officers liability insurance coverage. In lieu of the foregoing, United may obtain at or prior to the effective time of the merger a six-year “tail” policy under Community Bankers Trust’s existing directors’ and officers’ insurance policy providing equivalent coverage to that described in the preceding sentence if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed more than 200% of the current amount expended by Community Bankers Trust to maintain or procure such directors’ and officers’ liability insurance coverage.
Special Meeting; Board Recommendation
Community Bankers Trust agrees to take, in accordance with applicable law and its articles of incorporation and bylaws, all action necessary to convene an appropriate meeting of its shareholders to consider and vote upon the approval of the merger agreement and any other matters required to be approved by Community Bankers Trust’s shareholders for consummation of the merger, as promptly as practicable after this registration statement, of which this prospectus and proxy statement is a part, is declared effective.
The Community Bankers Trust board of directors shall recommend that the Community Bankers Trust shareholders approve and adopt the merger agreement and the transactions contemplated thereby. However, the Community Bankers Trust board of directors may fail to make such recommendation, or change, withdraw, qualify or modify, or publicly propose to change, withdraw, qualify or modify, in a manner that is adverse to United, any such recommendation, which we refer to as an adverse recommendation change, if the Community
Bankers Trust board of directors has, after having consulted with its financial advisor with respect to financial matters and having consulted with and considered the advice of its outside legal counsel, determined that the failure to make an adverse recommendation change would be reasonably likely to constitute a breach of the fiduciary duties of the members of the Community Bankers Trust board of directors under applicable law and complied with the terms set forth below.
Prior to making an adverse recommendation change, the Community Bankers Trust board of directors shall provide written notice to United Bankshares of its intent to announce an adverse recommendation change on the fifth business day following delivery of such notice, which notice shall specify any material terms and conditions of any applicable superior proposal (and include a copy thereof with all accompanying documentation, if in writing), and identify the person making such superior proposal, if applicable (it being understood that any amendment to any material term of such superior proposal shall require a new notice of recommendation change, except that, in such case, the five business day period referred to above shall be reduced to three business days following the delivery of such new notice of recommendation change).
After providing such notice of recommendation change, Community Bankers Trust shall negotiate in good faith with United Bankshares (if requested by United Bankshares) and provide United Bankshares reasonable opportunity during the subsequent five business day period to make such adjustments in the terms and conditions of the merger agreement as would enable the Community Bankers Trust board of directors to proceed without an adverse recommendation change (it being understoodthat United Bankshares shall not be required to propose any such adjustments). The Community Bankers Trust board of directors may make an adverse recommendation change, if, following such five business day period, determines in good faith, after consultation with its financial advisors and outside counsel, it determines that the failure to take such action would be reasonably likely to constitute a breach of the fiduciary duties of the members of the Community Bankers Trust board of directors under applicable law.
Community Bankers Trust agrees not to, solicit or encourage inquiries or proposals with respect to, or engage in any negotiations concerning, or provide any confidential information to, or have any discussions with any person relating to, any acquisition proposal. Community Bankers Trust has also agreed to cause its subsidiaries, officers, directors, agents, advisors and affiliates not to do so. Community Bankers Trust agreed to immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of the merger agreement with any parties other than United Bankshares with respect to any of the foregoing and shall use its reasonable best efforts to enforce any confidentiality or similar agreement relating to an acquisition proposal. Community Bankers Trust agreed to inform United Bankshares promptly of all relevant details of any inquiries or contacts by third parties relating to the possible disposition of the business or the capital stock of Community Bankers Trust or any merger, change or control or other business combination involving Community Bankers Trust.
Notwithstanding these commitments, nothing in the merger agreement prohibits Community Bankers Trust, prior to the special meeting of Community Bankers Trust shareholders, and subject to compliance with the other terms of merger agreement, from furnishing nonpublic information to, or entering into discussions or negotiations with, any person that makes an unsolicited, bona fide written acquisition proposal with respect to Community Bankers Trust or any of its significant subsidiaries (that did not result from a breach of the applicable terms of the merger agreement), if, and only to the extent that (i) the Community Bankers Trust board of directors concludes in good faith, after consultation with and based upon the advice of outside legal counsel, that the failure to take such actions would be reasonably likely to constitute a breach ofits fiduciary duties to its shareholders under applicable law, (ii) before taking such actions, Community Bankers Trust receives from such person an executed confidentiality agreement providing for reasonable protection of confidential information, which confidentiality agreement shall not provide such person or entity with any exclusive right to negotiate with Community Bankers Trust and shall contain terms and conditions no less favorable to Community Bankers Trust
with respect to confidentiality than its confidentiality agreement with United Bankshares, and(iii) the Community Bankers Trust board of directors concludes in good faith, after consultation with its outside legal counsel and financial advisors, that the acquisition proposal constitutes or is reasonably likely to result in a superior proposal.
Community Bankers Trust shall promptly notify United Bankshares in writing of Community Bankers Trust’s receipt of any such acquisition proposal or inquiry, the material terms and conditions thereof, the identity of the person making such acquisition proposal or inquiry, and shall keep United Bankshares reasonably informed on a prompt basis, of the status and material terms of any such acquisition proposal and the status of discussions or negotiations with respect thereto, including any material amendments or proposed amendments as to price and other material terms thereof. Any violation of these restrictions by a representative of Community Bankers Trust shall be deemed a breach by Community Bankers Trust.
An “acquisition proposal” means any tender or exchange offer, proposal for a merger, consolidation or other business combination involving Community Bankers Trust or any of its significant subsidiaries or any proposal or offer to acquire equity interests representing 24.99% or more of the voting power of, or at least 24.99% of the assets or deposits of, Community Bankers Trust or any of its significant subsidiaries, other than the transactions contemplated by the merger agreement.
A “superior proposal” means an acquisition proposal that was received and considered by Community Bankers Trust in accordance with the applicable terms of the merger agreement that (i) would, if consummated, result in a transaction that is more favorable to Community Bankers Trust’s shareholders from a financial point of view than the merger, (ii) is fully financed or reasonably capable of being fully financed and (iii) is reasonably likely to receive all required approvals of governmental authorities on a timely basis and otherwise reasonably capable of being completed on the terms proposed.
If Community Bankers Trust, by a majority vote of members of the board of directors of Community Bankers Trust, terminates the merger agreement in order to concurrently enter into an agreement with respect to a superior proposal, provided that United Bankshares does not make a counteroffer that is at least as favorable to such proposal, it is obligated to pay to United Bankshares the termination fee equal to $12,132,000. See “– Effect of Termination; Termination Fee” on page 75.
The merger will be consummated and become effective upon the issuance of a certificate of merger by the Virginia State Corporation Commission and the West Virginia Secretary of State (or on such other date as may be specified in the articles of merger to be filed with the Virginia State Corporation Commission and the West Virginia Secretary of State). Provided that the conditions set forth in the merger agreement have been satisfied or waived, other than those conditions that by their nature are to be satisfied at the effective time of the merger, United Bankshares and Community Bankers Trust shall cause the effective date of the merger to occur on the date immediately prior to the conversion of the data processing systems of Essex Bank with the data processing systems of United Bank. However, if such date has not occurred by December 6, 2021, then the parties shall cause the effective date of the merger to occur on the sooner of (i) five business days thereafter if all of the conditions of the merger have been satisfied or waived as of such date or (ii) five business days following the satisfaction or waiver of the conditions set forth in the merger agreement, unless another date is agreed to by Community Bankers Trust and United Bankshares.
The merger and the bank merger require the approval of the Federal Reserve and the Virginia Bureau of Financial Institutions.
The transactions contemplated by the merger agreement require approval by the Federal Reserve pursuant to Section 3 of the Bank Holding Company Act of 1956, as amended, which we refer to as the BHCA, unless the
Federal Reserve waives that requirement, and pursuant to Section 18(c)(2)(B) of the Federal Deposit Insurance Act, which we refer to as the Bank Merger Act.
The Federal Reserve takes into consideration a number of factors when acting on applications filed under Section 3 of the BHCA and the Bank Merger Act. These factors include the effect of the merger on competitiveness in affected banking markets, the financial and managerial resources (including consideration of the capital adequacy, liquidity, and earnings performance, as well as the competence, experience and integrity of the officers, directors and principal shareholders, and the records of compliance with applicable laws and regulations) and future prospects of the combined organization. The Federal Reserve also considers the effectiveness of the applicant in combatting money laundering, the convenience and needs of the communities to be served, as well as the extent to which the proposal would result in greater or more concentrated risks to the stability of the U.S. banking or financial system. The Federal Reserve has the authority to deny an application if it concludes that the combined organization would have inadequate capital. In addition, the Federal Reserve can withhold approval of the merger if, among other things, it determines that the effect of the merger would be to substantially lessen competition in the relevant market. Further, the Federal Reserve must consider whether the combined organization meets the requirements of the Community Reinvestment Act of 1977, which we refer to as the CRA, by assessing the involved entities’ records of meeting the credit needs of the local communities in which they operate, consistent with the safe and sound operation of such institutions.
In addition, a period of 15 to 30 days must expire following approval by the Federal Reserve before completion of the merger is allowed, within which period the United States Department of Justice may file objections to the merger under the federal antitrust laws.
The merger cannot be consummated prior to receipt of all required approvals. There can be no assurance that required regulatory approvals for the merger will be obtained or that the Federal Reserve will not request that United Bankshares withdraw its application (which it may do if issues arise during processing), and, if the merger is approved, as to the date of such approvals or whether the approvals will contain any unacceptable conditions. There can likewise be no assurance that the United States Department of Justice will not challenge the merger during the waiting period set aside for such challenges after receipt of approval from the Federal Reserve.
Under the merger agreement, United Bankshares is not required to agree to any condition or take any action if such agreement or the taking of such action is reasonably likely to result in any conditions or requirements that the United Bankshares board of directors reasonably determines in good faith would be materially financially burdensome to the business, operations, financial condition or results of operations of United Bankshares or Community Bankers Trust such that, had such condition or requirement been known, United Bankshares would not, in its reasonable good faith judgment, have entered into the merger agreement.
Should any other approval or action be required, it is presently contemplated that such approval or action would be sought. There can be no assurance that any necessary regulatory approvals or actions will be timely received or taken, that no action will be brought challenging such approval or action or, if such a challenge is brought, as to the result thereof, or that any such approval or action will not be conditioned in a manner that would cause the parties to abandon the merger. These approvals could be delayed or not obtained at all for various reasons, including an adverse development in either party’s regulatory standing, governmental or political inquiries, investigations or opposition, or changes in legislation or the political environment generally.
The approval of any application merely implies the satisfaction of regulatory criteria for approval, which does not include review of the merger from the standpoint of the adequacy of the exchange ratio for converting Community Bankers Trust common stock to United Bankshares common stock. Furthermore, regulatory approvals do not constitute an endorsement or recommendation of the merger.
As of the date of this prospectus and proxy statement, United Bankshares and Community Bankers Trust have filed all required applications or waivers thereof for regulatory approval. United Bankshares filed an
application with the Federal Reserve for approval under the Bank Merger Act and filed a request for a waiver of the prior approval requirement under Section 3 of the BHCA using procedures outlined in applicable regulations. Applications were filed by United Bankshares with the Virginia Bureau of Financial Institutions. The Virginia Bureau of Financial Institutions approved the applications on September 7, 2021. The application and request for waiver submitted to the Federal Reserve are still under review by the Federal Reserve. We cannot be certain when or if we will receive approval from the Federal Reserve, or if obtained, whether such approval will contain terms, conditions or restrictions not currently contemplated that will be detrimental to the combined company after completion of the merger.
Conduct of Business Pending the Merger
The merger agreement contains reciprocal forbearances made by Community Bankers Trust and United Bankshares to each other. Community Bankers Trust and United Bankshares have agreed that, until the effective time of the merger, neither of them nor any of their subsidiaries, without the prior written consent of, or as previously disclosed to, the other, will:
Conduct business other than in the ordinary and usual course or fail to use reasonable efforts to preserve intact its business organizations and assets and maintain its rights, franchises and existing relations with customers, suppliers, employees and business associates, or take any action reasonably likely to have an adverse effect upon its ability to perform any of its material obligations under the merger agreement; or
Take any action that would, or is reasonably likely to, prevent or impede the merger from qualifying as a reorganization within the meaning of Section 368 of the Code, or knowingly take any action that is intended or is reasonably likely to result in any of the conditions to the merger not being satisfied, or a material violation of any provision of the merger agreement except, in each case, as may be required by applicable law or regulation.
Community Bankers Trust has also agreed that, prior to the effective time, without the prior written consent of, or as previously disclosed to, United Bankshares, it will not and will cause each of its subsidiaries not to:
Make any capital expenditure in excess of $500,000 in the aggregate;
Other than pursuant to rights previously disclosed and outstanding on the date of the merger agreement, issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of Community Bankers Trust common stock or any rights to purchase Community Bankers Trust common stock, enter into any agreement with respect to the foregoing, or permit any additional shares of Community Bankers Trust common stock to become subject to new grants of employee or director stock options, other rights or similar stock based employee rights (other than equity compensation awards and issuances of Community Bankers Trust common stock, rights, employee or director stock options or similar equity compensation awards under a Community Bankers Trust equity compensation plan in the ordinary course of business consistent with past practice);
Except as previously disclosed, make, declare, pay or set aside for payment any dividend (other than quarterly cash dividends at a rate not to exceed $0.07 per share on Community Bankers Trust common stock and dividends from wholly-owned subsidiaries to Community Bankers Trust, or another wholly-owned subsidiary of Community Bankers Trust) on or in respect of, or declare or make any distribution on, any shares of Community Bankers Trust stock or directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock;
Enter into or amend or renew any employment, change in control employment or similar agreement, consulting, compensation, bonus, severance or similar agreements or arrangements with any director,
officer, employee, consultant or other independent contractor service provider of Community Bankers Trust or its subsidiaries, except as previously disclosed, or grant any salary or wage increase other than normal individual increases in compensation to employees in the |
Enter into, establish, adopt or amend (except (i) as may be required by applicable law, (ii) as previously disclosed or (iii) to satisfy previously disclosed contractual obligations existing as |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the Company’s directors and executive officers are at present, asdate of the merger agreement) any pension, retirement, stock option, stock purchase, or other equity incentive agreement, award or plan, savings, profit sharing, deferred compensation, supplemental employment retirement plan, performance driven retirement or similar agreement, consulting, bonus, group insurance, split dollar agreement or arrangement or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any director, officer, employee, consultant or other independent contractor or other service provider of Community Bankers Trust or its subsidiaries, or take any action to accelerate the past,vesting or exercisability of stock options, restricted stock unit or other compensation or benefits payable thereunder;
Sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its banking customers. As such, the Company, through its banking subsidiary, has had, and expects to have in the future, banking transactions with directors, officers, principal shareholders and their employees. All loans and commitments to lend to such parties have been madeassets, deposits, business or properties except in the ordinary course of business and in a transaction that is not material to it and its subsidiaries taken as a whole;
Except in the ordinary course of business, acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice) all or any portion of the assets, business, deposits or properties of any other entity;
Amend Community Bankers Trust’s articles of incorporation or bylaws or the articles of incorporation or bylaws (or similar governing documents) of any of Community Bankers Trust’s subsidiaries;
Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or its regulatory authorities;
Except in the ordinary course of business consistent with past practice, enter into or terminate any material contract or amend or modify any of its existing material contracts in a manner that is material to Community Bankers Trust and its subsidiaries, taken as a whole;
Except in the ordinary course of business consistent with past practice, settle any claim, action or proceeding, except for any claim, action or proceeding that does not involve precedent for other material claims, actions or proceedings and that involve solely money damages in an amount, individually or in the aggregate for all such settlements, that is not material to Community Bankers Trust and its subsidiaries taken as whole;
Except as required by applicable law or regulation, implement or adopt any material change in its interest rate or other risk management policies, practices or procedures, fail to materially follow existing policies or practices with respect to managing exposure to interest rate and other risk, or fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk;
Incur any indebtedness for borrowed money other than in the ordinary course of business;
Organize or approve the organization of any subsidiaries; or
Agree or commit to do any of the foregoing.
United Bankshares has agreed that, prior to the effective time, without the prior written consent of, or as previously disclosed to, Community Bankers Trust, it will not and will cause each of its subsidiaries not to:
Make, declare, pay or set aside for payment any extraordinary dividend, other than in connection with the United Bankshares stock repurchase program, provided that the foregoing restriction does not restrict United Bankshares from making, declaring or paying its regular quarterly cash dividends and dividends from wholly-owned subsidiaries to United Bankshares or another wholly-owned subsidiary of United Bankshares (which, for the avoidance of doubt, will continue to be paid);
Amend the United Bankshares articles of incorporation or bylaws in a manner that would materially and adversely affect the benefits of the merger to the shareholders of Community Bankers Trust; or
Agree or commit to do any of the foregoing.
Termination of the Merger Agreement
Community Bankers Trust and United Bankshares may mutually agree to terminate the merger agreement at any time upon a vote by a majority of the board of directors of each of Community Bankers Trust and United Bankshares.
Either Community Bankers Trust or United Bankshares may terminate the merger agreement if the merger is not complete by May 31, 2022, unless the failure of the merger to be consummated arises out of or results from the knowing action or inaction of the party seeking to terminate.
Either Community Bankers Trust or United Bankshares may terminate the merger agreement if (i) final action has been taken by any governmental authority whose approval is required for consummation of the merger and the other transactions contemplated by the merger agreement, which final action has become nonappealable and does not approve the merger agreement or the transactions contemplated by the merger agreement, or such governmental authority has approved of the merger agreement or the transactions contemplated by the merger agreement with a materially burdensome regulatory condition, or (ii) an application submitted to any governmental authority whose approval is required for the consummation of the merger has been permanently withdrawn at the request or suggestion of such governmental authority (except to the extent that such action, denial or withdrawal or the imposition of such condition is due to the failure of the party seeking to terminate to perform or observe the covenants of such party).
United Bankshares may terminate the merger agreement if any of the following occurs:
Community Bankers Trust materially breaches any of its representations, warranties, covenants or agreements under the merger agreement and does not or cannot cure the breach within 30 days of written notice of the breach;
The Community Bankers Trust shareholders do not approve the merger agreement;
As of May 31, 2022, (i) the continued accuracy of Community Bankers Trust’s representations and warranties in the merger agreement cannot be confirmed by Community Bankers Trust, (ii) the performance in all material respects of all of its obligations in the merger agreement cannot be confirmed by Community Bankers Trust, or (iii) Rex L. Smith, III, President and Chief Executive Officer of Community Bankers Trust and Essex Bank, has taken action on substantiallyor before the effective time of the merger to materially breach or to cancel or terminate the employment agreement between United Bank and Mr. Smith dated June 2, 2021 (provided that such failure is not a result of United Bankshares’ failure to perform, in any material respect, any of its covenants or agreements contained in the merger agreement or the material breach by United Bankshares of any of its representations or warranties contained in the merger agreement);
The Community Bankers Trust board of directors fails (i) to recommend approval of the merger agreement, or changes, withdraws, qualifies or modifies in a manner that is adverse to United, (ii) to
reaffirm its recommendation for approval of the merger agreement within 10 business days after United requests such reaffirmation in writing at any time following the public announcement of an acquisition proposal, or (iii) to comply in all material respects with its obligations under the merger agreement with respect to an acquisition proposal; or |
Community Bankers Trust enters into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, or other similar agreement constituting or related to, or which is intended to or would be reasonably likely to lead to any tender or exchange offer, proposal for a merger, consolidation or other business combination involving Community Bankers Trust or any of its significant subsidiaries or any proposal or offer to acquire equity interests representing 24.99% or more of the voting power of, or at least 24.99% of the assets or deposits of, Community Bankers Trust or any of its significant subsidiaries.
Community Bankers Trust may terminate the merger agreement if any of the following occurs:
United Bankshares materially breaches any of its representations, warranties, covenants or agreements under the merger agreement and does not or cannot cure the breach within 30 days of written notice of the breach;
As of May 31, 2022, United Bankshares is not able to confirm, (i) the continued accuracy of its representations and warranties in the merger agreement or (ii) the performance in all material respects of all of its obligations in the merger agreement (provided that such failure is not a result of Community Bankers Trust’s failure to perform, in any material respect, any of its covenants or agreements contained in the merger agreement or the material breach by Community Bankers Trust of any of its representations or warranties contained in the merger agreement); or
If both (i) the average of the closing sale prices of United Bankshares common stock, which we refer to as the average United Bankshares stock price, as reported on Nasdaq during the 20 consecutive full trading days ending at the closing of trading on the trading day immediately prior to the latest of (A) the date on which the last regulatory approval necessary is received (and any statutory waiting period in respect thereof has expired) or (B) the date on which the Community Bankers Trust shareholders approve the merger, which we refer to as the determination date, is less than $33.37, and (ii) (1) the quotient of the average United Bankshares stock price divided by $41.71, shall be less than 80% of (2) the quotient of the average of the daily current market price of the KBW Regional Banking Index, which we refer to as the Index, for the 20 consecutive full trading days ending at the closing of trading on the trading day immediately prior to the determination date divided by the closing price for the Index on June 1, 2021 of $129.29. If Community Bankers Trust elects to terminate under the provision described above, United Bankshares shall have the option to increase the per share exchange ratio or pay an additional cash payment to each Community Bankers Trust shareholder as part of the merger consideration.
Additionally, Community Bankers Trust may terminate the merger agreement in order to enter into an agreement with respect to a superior proposal, provided that United Bankshares does not make a counteroffer that the Community Bankers Trust board of directors determines is at least as favorable to such proposal and Community Bankers Trust pays the termination fee described below.
Effect of Termination; Termination Fee
If the merger agreement is validly terminated, the merger agreement will become void without any liability on the part of any party except that provisions relating to expenses and the termination fee will continue in effect and termination will not relieve a breaching party from liability for any willful breach of the merger agreement.
Community Bankers Trust has agreed to pay a termination fee to United Bankshares equal to $12,132,000 if:
Community Bankers Trust terminates the merger agreement in order to concurrently enter into an agreement with respect to a superior proposal, provided United Bankshares does not make a counteroffer that the Community Bankers Trust board of directors determines is at least as favorable to such proposal;
United terminates the merger agreement because Community Bankers Trust enters into a letter of interest, memorandum of understanding, acquisition agreement, merger agreement or other similar agreement constituting or related to, or which is intended to or would be reasonably likely to lead to any proposal for a merger, consolidation or other business combination involving the offer or sale of 50.01% or more of the voting power, assets or deposits of Community Bankers Trust; or
United Bankshares terminates the merger agreement because (i) the Community Bankers Trust board of directors fails to recommend, withdraws, modifies or changes its recommendation of the merger in a manner adverse in any respect to the interests of United Bankshares or (ii) Community Bankers Trust fails to comply in all material respects with (A) its obligations to call a meeting of shareholders to approve the merger agreement and recommend approval of the same terms, including interest ratesor (B) its obligations not to solicit acquisition proposals, and collateralwithin 12 months after the date of termination of the merger agreement, Community Bankers Trust enters into an agreement with respect to another acquisition proposal or consummates another acquisition proposal.
Surrender of Stock Certificates
Computershare Limited will act as exchange agent in the merger and in that role will process the exchange of Community Bankers Trust stock certificates and non-certificated shares of Community Bankers Trust common stock, or book-entry shares, for United Bankshares common stock. The exchange agent, or United Bankshares and Community Bankers Trust if the exchange agent declines to do so, will also be making any computations required by the merger agreement, and all such computations will be conclusive and binding on loans,the holders of Community Bankers Trust common stock in the absence of manifest error. In any event, do not forward your Community Bankers Trust stock certificates with your proxy card.
As soon as those prevailingpracticable after the effective time of the merger, but in no event later than five business days thereafter, United Bankshares shall cause the exchange agent to mail to each holder of record of one or more Community Bankers Trust stock certificates or book-entry shares representing shares of Community Bankers Trust common stock immediately prior to the effective time that have been converted at the effective time with other persons not relatedinto the right to receive the merger consideration, a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Company or the Bank. These transactions do not involve more than the normal risk of collectability or present other unfavorable features. The aggregate outstanding balance of loans to such parties at December 31, 2018 was $10,000.
The Company has not adopted a formal policy that covers the review and approval of related person transactions by its Board of Directors that is separate from the Code of Business Conduct and Ethics, which applies to directors, officers and all employeesCommunity Bankers Trust stock certificates shall pass, only upon proper delivery of the Company and its subsidiaries. The Board reviews all proposed related party transactions for approval. During such a review, the Board will consider, among other things, the related person’s relationshipCommunity Bankers Trust stock certificates or book-entry shares to the Company,exchange agent) and instructions for use in effecting the facts and circumstancessurrender of the proposed transaction,Community Bankers Trust stock certificates or book-entry shares in exchange for book-entry shares representing the aggregate dollarnumber of whole shares of United Bankshares common stock and any cash in lieu of fractional shares that the shares of Community Bankers Trust common stock represented by such Community Bankers Trust stock certificate or book-entry shares have been converted into the right to receive pursuant to the merger agreement, as well as any dividends or distributions to be paid pursuant to the merger agreement.
From and after the effective time, upon proper surrender of a Community Bankers Trust stock certificate or book-entry shares for exchange and cancellation to the exchange agent, together with such properly completed letter of transmittal, duly executed, the holder of such Community Bankers Trust stock certificates or book-entry shares shall be entitled to receive in exchange therefor, as applicable, (i) book-entry shares representing that number of whole shares of United Bankshares common stock to which such holder of Community Bankers Trust common stock shall have become entitled under the merger agreement and (ii) a check representing the amount
of (A) any cash in lieu of fractional shares that such holder has the right to receive in respect of the transaction,Community Bankers Trust stock certificate or book-entry shares surrendered and (B) any dividends or distributions that the related person’s relationshipholder thereof has the right to receive pursuant to the transactionmerger agreement, and the Community Bankers Trust stock certificate or book-entry shares so surrendered shall forthwith be cancelled. Until surrendered, each Community Bankers Trust stock certificate or book-entry shares shall be deemed at any time after the effective time to represent only the right to receive, upon surrender, the merger consideration, any cash in lieu of fractional shares payable, and any cash in respect of dividends or distributions as contemplated by the merger agreement.
No dividends or other material information. Those directors that are involved indistributions declared with respect to United Bankshares common stock shall be paid to the holder of any un-surrendered Community Bankers Trust stock certificate or book-entry shares until the holder thereof has surrendered such Community Bankers Trust Stock Certificate or book-entry shares. After the surrender of a proposed related party transaction are excused fromCommunity Bankers Trust stock certificate or book-entry shares, the Board and/record holder thereof shall be entitled to receive any such dividends or committee meeting during the discussion and voteother distributions, without any interest thereon, with respect to the proposal.
ADVISORY VOTE ON EXECUTIVE COMPENSATION
This proposal is commonly known as the “say on pay” proposal. The Dodd-Frank Act, enacted in 2010, requires that each public company provide its shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, such company’s executive compensation program, as disclosed pursuant to the compensation disclosure ruleswhole shares of the Securities and Exchange Commission.
At the Company’s 2015 annual meeting, the shareholders voted in favor of having the advisory vote on the endorsement of the Company’s executive compensation program every year. Accordingly, the Company is asking you to approve at the Annual Meeting its executive pay programs and policies through the following resolution:
“RESOLVED,United Bankshares common stock that the shareholders approve the compensation of executive officers as disclosed in the proxy statement for the 2019 Annual Meetingshares of Community Bankers Trust Corporationcommon stock represented by such Community Bankers Trust stock certificate or book-entry shares have been converted into (i) with a record date and a payment date on or after the effective time and on or prior to the date of such surrender, and (ii) at the appropriate payment date, with a record date on or after the effective time but prior to the date of such surrender and a payment date subsequent to the date of such surrender.
After the completion of the merger, there will be no further transfers of Community Bankers Trust common stock. Community Bankers Trust stock certificates and book-entry shares presented for transfer after the completion of the merger will be cancelled and exchanged for the merger consideration.
If your Community Bankers Trust stock certificates have been either lost, stolen or destroyed, you will have to prove your ownership of these certificates and that they were lost, stolen or destroyed before you receive any consideration for your shares. Upon request, our exchange agent, Computershare Limited, will send you instructions on how to provide evidence of ownership.
Each holder of shares of common stock exchanged pursuant to the rulesmerger who would otherwise have been entitled to receive a fraction of a share of United Bankshares common stock shall receive, in lieu thereof, cash (without interest) in an amount, without any interest thereon, equal to the product of (i) the volume-weighted average closing price on Nasdaq of United Bankshares common stock for the 20 full trading days ending on the second trading day immediately preceding the date on which the merger is completed multiplied by (ii) the fraction of a share of United Bankshares common stock that such holder would otherwise be entitled to receive. A Community Bankers Trust shareholder whose direct shareholdings are represented by multiple Community Bankers Trust stock certificates will have all shares associated with those stock certificates aggregated for purposes of calculating whole shares and cash in lieu of fractional shares to be received upon completion of the Securities and Exchange Commission.”merger.
Assumption of Community Bankers Trust Trust Preferred Securities
Non-binding approvalAt the effective time of the Company’s executive compensation program would requiremerger, United Bankshares will expressly assume all of Community Bankers Trust’s obligations under the debentures issued by Community Bankers Trust to BOE Statutory Trust I and any trust preferred securities issued by Community Bankers Trust that a majorityare intended to be “qualified trust preferred securities” (as defined in applicable regulatory capital guidelines) or that are eligible for such treatment as grandfathered trust preferred securities. In connection therewith, to the extent applicable, as of the shares present or represented at the Annual Meeting vote in favoreffective time of the proposal. Abstentionsmerger, United Bankshares will be substituted for Community Bankers Trust on such indentures and broker non-votestrust preferred securities and will have executed any and all documents, instruments and agreements, including any supplemental indentures, guarantees or declarations of trust required by the aforementioned indentures or the trust preferred securities issued by BOE Statutory Trust I, or as may reasonably be requested by the trustees
thereunder, and thereafter shall perform all of Community Bankers Trust’s obligations with respect to the trust preferred securities issued by BOE Statutory Trust I.
No Dissenters’ or Appraisal Rights
Shareholders will not have any dissenters’ or appraisal rights in connection with the merger and the other matters described in this prospectus and proxy statement.
The merger will be accounted for using acquisition accounting, in accordance with GAAP. As such, the assets and liabilities of Community Bankers Trust, as of the completion of the merger, will be recorded at their fair values as well as any identifiable intangible assets. Any remaining excess purchase price will be allocated to goodwill, will not be counted as votes castamortized and therefore will not affectbe evaluated for impairment annually. Consolidated financial statements of United Bankshares issued after the determination as to whether the Company’s executive compensation program as disclosed in this proxy statement is approved.
At the Company’s 2018 annual meeting, the shareholders approved this proposal with 96.6%consummation of the votes castmerger will reflect such values. In addition, costs incurred in favorconnection with the business combination will be expensed as incurred unless related to the equity issuance. The operating results of it.Community Bankers Trust will be included in United Bankshares’ consolidated financial statements from the date the merger is consummated and afterwards.
Management and Operations after the Merger; Advisory Board
Because your vote is advisory, it will notThe current directors and senior officers of United Bankshares are expected to continue in their current positions. Information about the current United Bankshares directors and executive officers can be binding uponfound in the documents listed under “Where You Can Find More Information” beginning on page 99.
All of the current members of the Board of Directors overrule any decision made by the Board of Directors or create or imply any additional fiduciary duty by the Board of Directors. The Compensation Committee, however, may take into account the outcome of the vote when considering future executive compensation arrangements.
The Board of Directors recommends that the shareholders voteFOR Proposal Two.
APPROVAL OF THE COMMUNITY BANKERS
TRUST CORPORATION 2019 STOCK INCENTIVE PLAN
General
The Board of Directors has adopted, subject to approval by the Company’s shareholders, the Community Bankers Trust Corporation 2019will be invited to serve on the United Bank’s Richmond Advisory Board or another appropriate advisory board maintained by United Bankshares or United Bank for the region in which such individuals reside.
Resales of United Bankshares Common Stock Incentive Plan (the “2019 Plan”).
The 2019 Plan is designedshares of United Bankshares common stock to promotebe issued to shareholders of Community Bankers Trust under the interestsmerger agreement have been registered under the Securities Act and may be freely traded without restriction by holders, including holders who were affiliates of Community Bankers Trust on the date of the Company and its shareholders by strengtheningspecial meeting (except for such holders who become affiliates of United Bankshares as of the Company’s abilityeffective time of the merger via their appointment to attract, motivate and retain employees,the board of directors of United Bankshares or otherwise). All directors and consultants upon whose judgment, initiative and efforts the financial success and growthexecutive officers of the businessCommunity Bankers Trust are considered affiliates of the Company largely depend.Community Bankers Trust for this purpose.
If approved by shareholders, a total of 2,500,000 shares of common stock will be reserved for issuance under the 2019 Plan. The Company is asking shareholders to approve the 2019 Plan because the stock incentive plan approved by shareholders in 2009 (the “2009 Plan”) will terminate on June 17, 2019. Outstanding awards under the 2009 Plan will be administered in accordance with their terms under such plan, but the Company will not make any further awards under the 2009 Plan following the approval of the 2019 Plan by shareholders.
The material terms of the 2019 Plan are summarized below. Because this is a summary, it may not contain all the information that shareholders may consider important. In order to aid understanding of the plan, the full text of the 2019 Plan, as proposed for adoption and approval by shareholders, is provided as Appendix A to this proxy statement.
Executive SummaryMATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following discussion and legal conclusions contained herein constitute and represent the opinion of Bowles Rice LLP, counsel to United Bankshares, and Williams Mullen, counsel to Community Bankers Trust, as to the material U.S. federal income tax consequences of the merger to “U.S. holders” of Community Bankers Trust common stock who exchange such stock for shares of United Bankshares common stock pursuant to the merger. This discussion is based upon the Code, existing and proposed Treasury Regulations, administrative pronouncements and judicial decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Such a change could affect the continuing validity of this summary. No assurance can be given that the IRS, would not assert, or that a court would not sustain, a position contrary to any of the tax consequences set forth below.
For purposes of this summary, a “U.S. holder” is a summarybeneficial owner of Community Bankers Trust common stock that for U.S. federal income tax purposes is: (1) a citizen or resident of the key provisionsUnited States; (2) a corporation, or an entity treated as a corporation, created or organized in or under the laws of the 2019 Plan, including important features that enableUnited States or any state or political subdivision thereof; (3) a trust (A) if (i) the Company to maintain sound governance practices in granting awards.
Award Types: The following types of awards will be available for issuance under the 2019 Plan:
Eligible Participants: All employees, directors and consultants of the Company and its subsidiaries.
Shares Reserved under the 2019 Plan: A total of 2,500,000 shares of the Company’s common stock are reserved for issuance under the 2019 Plan. The number of shares available for issuance under the 2019 Planadministration thereof is subject to adjustmentthe primary supervision of a court within the United States, and (ii) one or more United States persons have the authority to reflect stock splits, stock dividends and similar events.
Shares Reservedcontrol all substantial decisions of such trust or (B) that has a valid election in effect under the 2019 Planapplicable Treasury Regulations to be treated as a Percentage of Outstanding Common Stock as of March 20, 2019: 11.3%
Minimum Vesting: The 2019 Plan includes a 95% minimum vesting requirement. ThatUnited States person; or (4) an estate that is awards with respectsubject to at least 95%U.S. federal income tax on its income regardless of the shares ofsource.
If a partnership (including for this purpose any entity treated as a partnership for U.S. federal income tax purposes) holds Community Bankers Trust common stock, authorized for issuance under the 2019 Plan, or 2,375,000 shares, must havetax treatment of a vesting or exercise schedule of at least one year. Correspondingly, awards with respect to an aggregate of 125,000 sharespartner generally will not need to have a minimum vesting or exercise schedule.
No Liberal Share Recycling: Underdepend on the 2019 Plan, sharesstatus of the Company’spartner and the activities of the partnership. If you are a partner of a partnership holding Community Bankers Trust common stock, used to pay the exercise price of a stock option or to satisfyyou should consult your tax withholding in connection with an award will not be added back (recycled) to the aggregate plan limit.
No Dividends or Similar Distributions on Unvested Awards or Options: The 2019 Plan prohibits the payment of dividends or similar distributions on awards, whether subject to time-based or performance-based vesting, unless and until the vesting requirements have been met.
No Discounted Stock Options: The 2019 Plan prohibits the grant of stock options with an exercise price less than the fair market value of the Company’s common stock on the grant date.
Protective Provisions: The 2019 Plan provides for the possible forfeiture of outstanding awards upon a participant’s termination for cause and adds provisions subjecting all awards under the plan to the terms of any recoupment or clawback required by law or government regulation (or similar policy in effect at the Company).
Term of the Plan: No awards may be granted under the 2019 Plan after May 16, 2029, the termination date of the plan.
Equity Plan Information
advisor.
The following table provides information relatingsummary addresses only those U.S. holders that hold their Community Bankers Trust common stock as a capital asset within the meaning of Section 1221 of the Code. It does not address all the tax consequences that may be relevant to particular shareholders in light of their individual circumstances or to shareholders that are subject to special rules, including, without limitation: financial institutions; tax-exempt organizations; S corporations, partnerships or other pass-through entities (or an investor in an S corporation, partnership or other pass-through entity); insurance companies; mutual funds; controlled foreign corporations or passive foreign investment companies; regulated investment companies; real estate investment trusts; dealers in stocks or securities, or foreign currencies; non-U.S. holders; a trader in securities who elects the outstanding equity awards, which consistmark-to-market method of only stock options,accounting for the years ended December 31, 2018, December 31, 2017 and December 31, 2016 and the number of full-value awards, which consists of only stock awards, granted during this three-year period.
For the Year Ended December 31, | 2018 | 2017 | 2016 | |||||||||
Stock option awards granted | 279,000 | 293,000 | 263,000 | |||||||||
Full value awards granted: | ||||||||||||
Restricted stock awards | — | — | — | |||||||||
Other stock awards | 18,771 | 19,375 | 28,704 | |||||||||
Basic weighted average shares | 22,103,036 | 22,013,810 | 21,914,270 | |||||||||
Stock option awards outstanding | 1,574,250 | 1,338,750 | 1,135,000 | |||||||||
Weighted average exercise price | $ | 5.18 | $ | 4.45 | $ | 3.58 | ||||||
Weighted average term (in years) | 5.00 | 5.33 | 5.67 | |||||||||
Full value awards outstanding: | ||||||||||||
Restricted stock awards | — | — | — | |||||||||
Other stock awards | — | — | — | |||||||||
Common shares outstanding | 22,132,304 | 22,072,523 | 21,959,648 |
Purpose
The purpose of the 2019 Plan is to further the long-term stability and financial success of the Company by attracting and retaining personnel, including employees, directors and consultants, through the use of stock and stock-based incentives and other rightssecurities; persons that promote and recognize the financial success and growth of the Company. The Company believes that ownership of the Company’s common stock will stimulate the efforts of those persons upon whose judgment, interest and efforts the Company depends for the successful conduct of its business, and will further align those persons’ interests with the interests of the Company’s shareholders.
Shares Available for Issuance
Subject to approval by shareholders, the aggregate number ofhold shares reserved for issuance under the 2019 Plan is 2,500,000. Of this total, all 2,500,000as a hedge against currency risk, a straddle or a constructive sale or conversion transaction; holders who acquired their shares may be issued pursuant to the exercise of incentiveemployee stock options. Ifoptions or otherwise as compensation or through a tax-qualified retirement plan; and holders of Community Bankers Trust stock options, stock warrants or debt instruments. In addition, the discussion does not address any award grantedalternative minimum tax or any state, local or foreign tax consequences of the merger, nor does it address any tax consequences arising under the 2019 Planunearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010.
The merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Consummation of the merger is canceled, forfeited conditioned upon United Bankshares receiving an opinion from Bowles Rice LLP and upon Community Bankers Trust receiving an opinion from Williams Mullen, both to the effect that, based upon facts, representations and assumptions set forth in such opinions, the merger constitutes a reorganization within the meaning of Section 368(a) of the Code. The issuance of the opinions is conditioned on, among other things, such tax counsel’s receipt of representation letters from each of Community Bankers Trust
or expires forUnited Bankshares, in each case in form and substance reasonably satisfactory to such counsel, and on customary factual assumptions. Neither of these opinions of counsel is binding on the IRS or the courts and no ruling has been, or will be, sought from the IRS as to the U.S. federal income tax consequences of the merger. Accordingly, each Community Bankers Trust shareholder should consult its own tax advisor with respect to the particular tax consequences of the merger to such holder. If either Community Bankers Trust or United Bankshares waives the opinion condition after the registration statement of which this proxy statement and prospectus forms a part is declared effective by the SEC, and if the tax consequences of the merger to Community Bankers Trust and United Bankshares shareholders have materially changed, Community Bankers Trust and United Bankshares will recirculate appropriate soliciting materials to resolicit the votes of the Community Bankers Trust shareholders.
Consequences to Community Bankers Trust and United Bankshares
Each of Community Bankers Trust and United Bankshares will be a party to the merger within the meaning of Section 368(b) of the Code, and neither Community Bankers Trust nor United Bankshares will recognize any reason other thangain or loss as a result of exercise, vesting or settlement, the shares associated with such award will be availablemerger.
Exchange of Community Bankers Trust Common Stock for future awards under the 2019 Plan. In contrast, any shares withheld by the Company, delivered by a participant, or otherwise used to pay an option exercise price or withholding taxes associated with an awardUnited Bankshares Common Stock. U.S. holders of Community Bankers Trust common stock that exchange all of their Community Bankers Trust common stock solely for United Bankshares common stock will not be availablerecognize income, gain or loss for future awards under the 2019 Plan. In addition, in the event shares are withheld or delivered by a participant in connection with an option exercise, the number of shares available for future awards will be reduced by the gross number of shares to which the exercise relates, rather than the net number of new shares issued upon exercise.
With certain limitations, the 2,500,000 share limit (including for incentive stock options), the terms of outstanding awards and the individual annual award limits (described below) will be adjusted by the Compensation Committee of the Company’s Board of Directors in an equitable and proportionate manner to prevent dilution or enlargement of benefits or potential benefits intended to be made available under the 2019 Plan in the event of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction suchU.S. federal income tax purposes, except, as any recapitalization, reorganization, merger, spin-off of a subsidiary, or other relevant change in capitalization.
To date, no awards have been granted under the 2019 Plan.
Annual Limit on Awards
The maximum number of sharesdiscussed below, with respect to which awards may be grantedcash received in any calendar year to any individual other than a non-employee director will be 200,000 shares. A non-employee director may onlylieu of fractional shares of United Bankshares common stock.
Cash in Lieu of Fractional Shares. U.S. holders of Community Bankers Trust common stock that receive awards for a maximum numbercash in lieu of 20,000fractional shares of United Bankshares common stock in any calendar year.
Administration
The 2019 Plan will be administered by the Compensation Committee, which is composed entirely of independent directors. The Compensation Committee will have the power to select award recipients and grant awards on terms that the Compensation Committee considers appropriate. In addition, the Compensation Committee will have the authority to interpret the 2019 Plan, to adopt, amend or waive rules and regulations for the 2019 Plan’s administration, and to make all other determinations for administration of the 2019 Plan. The Compensation Committee may delegate all or part of its authority to one or more officers of the Company with respect to awards to individuals not subject to the reporting and other provisions of Section 16 of the Exchange Act.
Eligibility
Any employee or director of, or consultant to, the Company or an affiliate (as defined below) of the Company who, in the judgment of the Compensation Committee, has contributed or can be expected to contribute to the profits or growth of the Company is eligible to become a participant. For this purpose, an affiliate is a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company. The Bank is considered an affiliate of the Company. As of March 31, 2019, the Company and its affiliates employed 262 individuals, and there were 10 non-employee directors of the Company and its affiliates.
Types of Awards
Stock Options.Stock options granted under the 2019 Plan may be incentive stock options (which meet the requirements of IRC Section 422 and options that do not qualify as incentive stock options (“nonstatutory stock options”). A stock option entitles a recipient to purchase shares of common stock at a specified exercise price. The Compensation Committee will fix the exercise price at the time that the stock option is granted, provided that the exercise price cannot be less than 100% of the fair market value of a share of the Company’s common stock on the date of grant (or, in the case of an incentive stock option granted to a 10% shareholder of the Company, 110% of the shares’ fair market value on the date of grant). On March 29, 2019, the closing price of the common stock was $7.32 per share. The exercise price may be paid (i) in cash, (ii) by delivery of previously acquired shares with an aggregate fair market value equal to the exercise price for the number of option shares being acquired, (iii) if and as permitted by an award agreement, through a “net share exercise” whereby the Company withholds and retains sufficient shares issuable in connection with the stock option to cover the exercise price (other than for incentive stock options), (iv) through a “cashless exercise” procedure that enables a participant the opportunity to sell immediately some of the shares underlying the exercised portion of the stock option to generate sufficient cash to pay the exercise price, or (v) through a combination of the foregoing.
Stock options may be exercised at such times and subject to such conditions as may be prescribed by the Compensation Committee, including the requirement that they will not be exercisable after 10 years from the date of grant (or five years in the case of an incentive stock option granted to a 10% shareholder of the Company).
Restricted Stock Awards.The 2019 Plan permits the grant of restricted stock awards that are subject to forfeiture until the restrictions established by the Compensation Committee lapse and the restricted shares vest. A restricted stock award is an award of common stock that may be subject to restrictions on transferability and other restrictions as the Compensation Committee determines in its sole discretion on the date of grant. The restrictions may lapse over a specified period of time based on continued employment or service and/or the achievement of certain performance objectives. Unless a restricted stock award agreement provides otherwise, and except as provided in the next sentence, a participant who receives a restricted stock award will have all the rights of a shareholder as to those shares, including the right to vote. No dividends on shares of restricted stock will be paid to a participant unless and until those shares vest, at which time the accrued dividends will be delivered.
Restricted Stock Unit Awards.The Compensation Committee may also award restricted stock units (“RSU”) under the 2019 Plan. An RSU is an award stated with reference to a number of shares of common stock. The Compensation Committee may place such restrictions on the vesting and settlement of RSUs as the Compensation Committee deems appropriate, including restrictions relating to continued employment or service and/or achievement of certain performance objectives. The RSU may entitle the recipient to receive, upon satisfaction of the vesting conditions set forth in the RSU agreement, cash, shares of common stock or a combination of cash and shares of common stock. Holders of RSUs have no right to vote the shares represented by the units, but may be credited with cash and stock dividends paid by the Company in respect of its common stock. Any such dividends will be paid to the participant, in the form of cash or common stock with an equivalent value, if at all, on vesting and settlement of the related RSU. Subject to any exceptions authorized by the Compensation Committee, RSUs will be forfeited if the restrictions on vesting established with respect to such awards, whether time-based or performance-based, are not satisfied.
Stock Awards.The Compensation Committee may grant a stock award that is fully vested and freely transferable as of the date the award is granted, subject to restrictions under applicable federal or state securities laws. A stock award may be, but is not required to be, granted in settlement of a performance-conditioned award or upon achievement of performance objectives.
Restrictions on Transfer
In general, awards granted under the 2019 Plan may not be assigned, transferred, pledged or otherwise encumbered by a participant, other than by will or the laws of descent and distribution. The plan permits the award of nonstatutory stock options that are transferable to immediate family members (or certain related trusts or entities), in accordance with applicable securities laws.
Change in Control Provisions
In the event of a “change in control” (as defined in the 2019 Plan), the Compensation Committee may, at the time an award is made or thereafter, take such action as it deems appropriate, in its sole discretion and without the consent of a participant, which may include, without limitation, the following actions: (i) provide for the purchase or settlement of any award by the Company for an amount of cash equal to the amount that could have been obtained upon the exercise of such award or realization of such participant’s rights had such award been currently exercisable or payable; (ii) adjust outstanding awards as the Compensation Committee deems appropriate to retain the economic value of the award; or (iii) cause any outstanding award to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation in such change in control. Unless otherwise provided by the Compensation Committee, upon a change in control an award will be vested, earned or become exercisable to the extent provided in the applicable award agreement.
Amendment and Termination
If not sooner terminated by the Board of Directors of the Company, the 2019 Plan shall terminate on May 16, 2029. The Board of Directors may amend or terminate the 2019 Plan at any time, provided that no such amendment will be made without shareholder approval if required by the IRC, pursuant to the rules under Section 16 of the Exchange Act, by any national securities exchange or system on which the common stock is then listed or reported, by any regulatory body having jurisdiction with respect thereto, or under any other applicable laws, rules or regulations. Awards outstanding on the date of any such termination or amendment shall remain valid in accordance with their terms.
Summary of Federal Income Tax Consequences
The following is a general summary of the federal income tax consequences under the 2019 Plan. This summary does not address all matters that may be relevant to a particular participant based on his or her specific circumstances.
Nonstatutory Stock Options. The grant of a nonstatutory stock option will not result in taxable income to a participant. The participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares, and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such sharesmerger generally will be treated as capital gainsif the fractional shares of United Bankshares common stock had been distributed to them as part of the merger, and losses,then redeemed by United Bankshares in exchange for the cash actually distributed in lieu of the fractional shares, with the redemption generally qualifying as an “exchange” under Section 302 of the Code. Consequently, those holders generally will recognize capital gain or loss with respect to the cash payments they receive in lieu of fractional shares measured by the difference between the amount of cash received and the holder’s adjusted tax basis allocable to the fractional shares, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period of such shares is greater than one year. The deductibility of capital losses is subject to limitations.
Basis in United Bankshares Common Stock. Each U.S. holder’s aggregate tax basis in such sharesUnited Bankshares common stock received in the merger will be equal to the fair market valueU.S. holder’s aggregate adjusted tax basis in the Community Bankers Trust common stock exchanged in the merger, decreased by the amount of any tax basis allocable to any fractional share interest for which cash is received (described above). The holding period of United Bankshares common stock received by a U.S. holder in the merger will include the holding period of the shares atCommunity Bankers Trust common stock exchanged in the time of exercise.
Incentive Stock Options. The grant of an incentive stock option will not result in taxable income to a participant. The exercise of an incentive stock option will not result in taxable income to the participant provided that the participant was, without a break in service, an employee of the Company or a subsidiary (as defined for purposes of the relevant tax rules) during the period beginning on the date of the grant of the option and ending on the date three months prior to the date of exercise. This employment period is one year prior to the date of exercisemerger if the participantCommunity Bankers Trust common stock exchanged is “disabled” (as defined in the IRC). The heirs ofheld as a participant are not subject to this tax rule. The difference between the fair market value of the shares on the exercise date over the exercise is taken into account for alternative minimum tax purposes.
If the participant does not sell or otherwise dispose of the stock within two years from the date of the grant or within one year after exercise, then, upon disposition of such shares, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and the Company will not be entitled to any deduction for federal income tax purposes.
If the foregoing holding period requirements are not met, the participant will generally realize ordinary income, and the Company will be allowed a corresponding deduction,asset at the time of the dispositionmerger. If a U.S. holder acquired different blocks of Community Bankers Trust common stock at different times or at different prices, the United Bankshares common stock such holder receives will be allocated pro rata to each block of Community Bankers Trust common stock, and the basis and holding period of each block of United Bankshares common stock such holder receives will be determined on a block-for-block basis depending on the basis and holding period of the shares,blocks of Community Bankers Trust common stock exchanged for such block of United Bankshares common stock.
Backup Withholding and Reporting Requirements
U.S. holders of Community Bankers Trust common stock, other than certain exempt recipients, may be subject to backup withholding at a rate of 24% with respect to any cash payment received in an amount equalthe merger in lieu of
fractional shares. However, backup withholding will not apply to any U.S. holder that either (a) furnishes to United Bankshares a correct taxpayer identification number and certifies that it is not subject to backup withholding and United Bankshares and its exchange agent have not received notice to the lessercontrary or (b) otherwise proves to United Bankshares and its exchange agent that the U.S. holder is exempt from backup withholding.
In addition, U.S. holders of (i)Community Bankers Trust common stock are required to retain permanent records and make such records available to any authorized IRS officers and employees. The records should include the excessnumber of shares of Community Bankers Trust stock exchanged, the number of shares of United Bankshares stock received, the fair market value and tax basis of Community Bankers Trust shares exchanged and the U.S. holder’s tax basis in the United Bankshares common stock received.
If a U.S. holder of Community Bankers Trust common stock that exchanges such stock for United Bankshares common stock is a “significant holder” with respect to Community Bankers Trust, the U.S. holder is required to include a statement with respect to the exchange on or with the federal income tax return of the U.S. holder for the year of the exchange. A U.S. holder of Community Bankers Trust common stock will be treated as a significant holder in Community Bankers Trust if the U.S. holder’s ownership interest in Community Bankers Trust is five percent (5%) or more of Community Bankers Trust’s issued and outstanding common stock or if the U.S. holder’s basis in the shares onof Community Bankers Trust stock exchanged is one million dollars ($1,000,000) or more. The statement must be prepared in accordance with Treasury Regulation Section 1.368-3 and must be entitled “STATEMENT PURSUANT TO §1.368-3(b) BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER], A SIGNIFICANT HOLDER”. The statement must include the names and employer identification numbers of Community Bankers Trust and United Bankshares, the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price. If the amount realized exceeds the value of the shares on the date of exercise, any additional amount will be capital gain. If the amount realized is less than the exercise price, the participant will recognize no income,merger, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.
Special rules apply if a participant pays the exercise price for either type of option using shares previously owned by the participant.
Restricted Stock Awards.A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that time, assuming that the restrictions constitute a “substantial risk of forfeiture” for federal income tax purposes. Upon the vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares, and the Company will be entitled to a corresponding deduction. A participant may make a Section 83(b) election under the IRC to be taxed as compensation income based on the fair market value at timeand tax basis of grant, in which case the Company will be entitled to a corresponding deduction at that time. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting.
Stock Awards. Upon the grant of a stock award, a participant generally will realize ordinary income equal to the then fair market value of those shares, and the Company will be entitled to a corresponding deduction.
Restricted Stock Units. A participant who has been granted restricted stock units will not realize taxable income at the time of grant. Upon receipt of common stock or cash in the future pursuant to such an award, the participant will realize ordinary income equal to the then fair market value of those shares, and/or the amount of any cash received, and the Company will receive a corresponding deduction.
Benefits to Executive Officers and Directors
No new plan benefits table for the 2019 Plan is included in this document. Participation in the 2019 Plan is made at the Compensation Committee’s discretion and is based on the performance of the Company. Accordingly, future awards under the plan are not determinable at this time. See the “Compensation Discussion and Analysis” section beginning on page 21 for detailed information on awards to certain executive officers under the 2009 Plan during the most recent fiscal year.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information about common stock that may be issued upon the exercise of options, warrants and rights under the Community Bankers Trust Corporation 2009 Stock Incentive Plan asshares exchanged (determined immediately before the merger).
The discussion of December 31, 2018. There are no outstanding warrants or rights under that plan, and the Companymaterial U.S. federal income tax consequences set forth above does not have any other planspurport to be a complete analysis or listing of all potential tax effects that provide for the issuancemay apply to a holder of any options, warrants or rights.
Plan Category | Number of Securities Upon Exercise of | Weighted-Average Exercise Price of | Number of Securities First Column) | |||||||||
Equity Compensation Plans Approved by Security Holders 2009 Stock Incentive Plan | 1,574,250 | $ | 5.18 | 411,091 | ||||||||
Equity Compensation Plans Not Approved by Security Holders | — | — | — | |||||||||
Total | 1,574,250 | $ | 5.18 | 411,901 |
Shareholder Vote Required
The Community Bankers Trust Corporation 2019 Stock Incentive Plan will be approved bycommon stock. We strongly encourage shareholders if holders of a majorityCommunity Bankers Trust to consult their tax advisors to determine the particular tax consequences to them of the shares present in person or represented by proxy atmerger, including the Annual Meeting vote in favorapplication and effect of the action.
The Board of Directors recommends that the shareholders voteFOR Proposal Three.
federal, state, local, foreign and other tax laws.
PROPOSAL FOURINFORMATION ABOUT UNITED BANKSHARES AND COMMUNITY BANKERS TRUST
APPOINTMENT OF INDEPENDENT REGISTEREDUnited Bankshares is a West Virginia corporation registered as a bank holding company pursuant to the BHCA. United Bankshares elected to be a financial holding company effective April 2, 2017. United Bankshares was incorporated on March 26, 1982, organized on September 9, 1982, and began conducting business on May 1, 1984 with the acquisition of three wholly-owned subsidiaries. Since its formation in 1982, United Bankshares has acquired 32 banking institutions. United Bankshares’ banking subsidiary, United Bank, a Virginia banking corporation, offers a full range of commercial and retail banking services and products. United Bankshares also owns nonbank subsidiaries that engage in other community banking services such as asset management, real property title insurance, investment banking, financial planning and brokerage services.
PUBLIC ACCOUNTING FIRMAs a financial holding company, United Bankshares’ present business is community banking and mortgage banking. As of June 30, 2021, United Bankshares’ consolidated assets approximated $27.19 billion and total shareholders’ equity approximated $4.39 billion. At June 30, 2021, United Bankshares’ loan portfolio, net of unearned income, was $16.89 billion and its deposits were $21.57 billion.
The principal executive offices of United Bankshares are located in Charleston, West Virginia at 300 United Centre, 500 Virginia Street, East. The telephone number for United Bankshares’ principal executive offices is
General
Yount, Hyde & Barbour, P.C. (“YHB”), an independent registered public accounting firm, served as(304) 424-8800. United Bankshares’ website can be accessed at https://www.ubsi-inc.com. Information contained on the Company’s independent registered public accounting firm during the year ended December 31, 2018,websites of United Bankshares or any subsidiary of United Bankshares does not constitute a part of this prospectus and has been selected by the Audit Committee of the Company’s Board of Directors to serve as the Company’s independent registered public accounting firm for the current fiscal year. Representatives of YHB will be present at the Annual Meeting, will have the opportunity to make aproxy statement if they so desire and will be available to respond to appropriate questions.
Although shareholder ratification is not required byincorporated into other filings that United Bankshares makes with the Company’s Bylaws or otherwise,SEC. United Bankshares’ common stock is traded on Nasdaq under the Board, assymbol “UBSI”.
United Bankshares banking subsidiary, United Bank, operates a mattertotal of good corporate governance, is requesting that shareholders ratify203 full-service and limited service branch offices consisting of 67 branch offices in Virginia, including its main office, 48 branch offices in West Virginia, 44 branch offices in North Carolina, 25 branch offices in South Carolina, 7 branch offices in Maryland, 7 branch offices in the selectionDistrict of YHB as the Company’s independent registered public accounting firm for 2019. If shareholders do not ratify the selection of YHB, the Audit Committee will reconsider its appointment.Columbia, 4 branch offices in Pennsylvania and 1 branch office in Ohio.
The Board of Directors recommends that shareholders voteFOR ratification of the appointment of YHB as the Company’s independent registered public accounting firm for 2019.
Change in Firms
On March 13, 2018, the Audit Committee appointed YHB as the Company’s independent registered public accounting firmFor more information regarding United Bankshares, please see United Bankshares’ Annual Report on Form 10-K for the year ended December 31, 2018. YHB replaced BDO USA, LLC (“BDO”), which2020, its quarterly report on Form 10-Q for the Company dismissed effective March 16, 2018, following the Company’s filingquarter ended June 30, 2021 and its proxy statement for its 2021 Annual Meeting of its audited financial statements with the Securities and Exchange Commission.
BDO served as the Company’s independent registered public accounting firm during the years ended December 31, 2017 and 2016. The reports of BDO on the consolidated financial statements of the Company forShareholders, each of the years ended December 31, 2017which are incorporated into this prospectus and December 31, 2016 did not contain an adverse opinion orproxy statement by reference.
Community Bankers Trust is a disclaimer of opinion and were not qualified or modifiedVirginia corporation registered as to uncertainty, audit scope or accounting principles.
During the years ended December 31, 2017 and December 31, 2016 and during the subsequent interim period from January 1, 2018 through March 16, 2018, (i) there were no disagreements with BDO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures that, if not resolved to BDO’s satisfaction, would have caused BDO to make referencea bank holding company pursuant to the subject matter ofBHCA. Community Bankers Trust is the disagreement in connection with its reports and (ii) there were no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K under the federal securities laws.
During the years ended December 31, 2017 and December 31, 2016 and during the subsequent interim period from January 1, 2018 through March 16, 2018, neither the Company nor anyone on its behalf consulted YHB regarding the application of accounting principles toholding company for Essex Bank, a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided to the Company that YHB concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue. In addition, during the years ended December 31, 2017 and December 31, 2016 and from January 1, 2018 through March 16, 2018, neither the Company nor anyone on its behalf consulted YHB regarding any matterVirginia state commercial bank that was the subjectestablished in 1926.
Essex Bank engages in a general commercial banking business and provides a wide range of financial services primarily to individuals, small businesses and larger commercial companies, including individual and commercial demand and time deposit accounts, commercial and industrial loans, consumer and small business loans, real estate and mortgage loans, investment services, on-line and mobile banking products, and cash management services. Essex Services, Inc. is a “disagreement” orwholly-owned subsidiary of Essex Bank. Essex Services and its financial consultants offer a “reportable event”broad range of investment products and alternatives through an affiliation with Infinex Investments, Inc., each as definedan independent broker-dealer. It also offers insurance products through Essex Bank’s ownership interest in Regulation S-K Item 304(a)(1)(iv)Bankers Insurance, LLC, an independent insurance agency.
As of June 30, 2021, Community Bankers Trust’s consolidated assets approximated $1.75 billion and Item 304(a)(1)(v), respectively.total shareholders’ equity approximated $179.7 million. At June 30, 2021, Community Bankers Trust’s loan portfolio, net of allowances for loan losses was approximately $1.20 billion and its deposits totaled approximately $1.49 billion.
Community Bankers Trust’s and Essex Bank’s executive offices and main branch are located at 9954 Mayland Drive, Richmond, Virginia 23233, and its telephone number is (703) 584-3400. Essex Bank operates a total of 24 branch locations consisting of 18 branch offices in Virginia, including its main office, and 6 branch offices in Maryland.
Fees
The following table presents fees billed to the Company by YHB and BDO with respect to the years ended December 31, 2018 and December 31, 2017.
2018 | 2017 | |||||||||
Audit Fees | YHB | $ | 134,500 | — | ||||||
BDO | $ | 35,000 | $ | 200,000 | ||||||
Audit-Related Fees | YHB | $ | 10,000 | — | ||||||
BDO | — | $ | 10,000 | |||||||
Tax Fees | YHB | $ | 15,000 | — | ||||||
BDO | — | $ | 11,000 | |||||||
All Other Fees | YHB | — | $ | 13,500 | ||||||
BDO | $ | 2,466 | — |
Audit Fees are fees billed for the audit of the Company’s annual consolidated financial statements and management’s assessment of internal control over financial reporting and for reviews of the consolidated financial statements included in the Company’s quarterly reportsFor more information regarding Community Bankers Trust, please see Community Bankers Trust’s Annual Report on Form 10-Q for each year presented. The Company paid YHB an additional $1,376 for travel and related expenses for the 2018 audit work.
BDO’s fees for 2018 reflected the issuance of the firm’s consent and review of reclassifications of prior financial information in connection with the 2018 audited financial statements, and its fees for 2017 included also services with respect to successor auditor review of work papers related to the 2017 audited financial statements. The Company paid BDO an additional $5,000 for travel and related expenses for the 2017 audit work.
Audit-Related Fees are fees billed for services rendered in connection with the audit of the Bank’s 401(k) employee savings plan. The Company paid BDO an additional $196 for expenses billed in 2017.
Tax Fees are fees billed for the preparation of federal tax forms, tax planning and various other tax-related items.
For other fees, in 2018, BDO billed the Company $2,466 for services in connection with new revenue recognition standards. In 2017, YHB billed the Company $13,500 for professional business valuation services in connection with the Company’s analysis of an acquisition opportunity.
Pre-Approval Policies and Procedures
The Audit Committee of the Board of Directors has adopted policies and procedures for the pre-approval of services provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Such policies and procedures provide that the Audit Committee shall pre-approve all auditing and permitted non-audit services (including the fees and terms thereof).
For the 2018 year, the Audit Committee pre-approved the following services provided by YHB:
As permitted under the Sarbanes-Oxley Act of 2002 and its pre-approval policies and procedures, the Audit Committee may delegate pre-approval authority to its Chair. The Chair must then report any pre-approval decisions to the Audit Committee at the next scheduled meeting.
The Audit Committee acts under a written charter adopted by the Board of Directors. The Committee assists the Board of Directors in the fulfillment of its oversight responsibilities with respect to the completeness and accuracy of the Company’s financial reporting and the adequacy of its financial and operating controls. Management is responsible for the preparation, presentation and integrity of the Company’s financial statements; accounting and financial reporting principles; internal controls over financial reporting; and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements and of the Company’s internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board.
The Audit Committee has reviewed and discussedthe Company’s audited financial statements10-K for the year ended December 31, 2018 with2020, its quarterly report on Form 10-Q for the quarter ended June 30, 2021, and its proxy statement for its 2021 Annual Meeting of Shareholders, each of managementwhich are incorporated into this prospectus and proxy statement by reference.
DESCRIPTION OF UNITED BANKSHARES CAPITAL STOCK
The authorized capital stock of United Bankshares consists of 200,000,000 shares of common stock, par value $2.50 per share, and 50,000,000 shares of preferred stock, par value of $1.00 per share. United Bankshares
has 134,165,180 shares of common stock issued (including 4,962,302 shares held as treasury shares) and no shares of preferred stock issued, each as of September 27, 2021. The outstanding shares are held by approximately 8,708 shareholders of record, as well as 39,312 shareholders in street name as of September 27, 2021. All outstanding shares of United Bankshares common stock are fully paid and nonassessable. The unissued portion of United Bankshares’ authorized common stock (subject to registration approval by the SEC) and the independent registered public accounting firm.treasury shares are available for issuance as the board of directors of United Bankshares determines advisable.
On May 12, 2020, United Bankshares’ shareholders approved the 2020 Long-Term Incentive Plan, or the 2020 LTI Plan. The Committee has also discussed with each party2020 LTI Plan became effective May 13, 2020. An award granted under the Company’s compliance with Section 4042020 LTI Plan may consist of any non-qualified stock options or incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units or other-stock-based award. These awards all relate to the common stock of United Bankshares. The maximum number of shares of United Bankshares common stock which may be issued under the 2020 LTI Plan is 2,300,000. The 2020 LTI Plan will be administered by a board committee appointed by United Bankshares’ board of directors. Unless otherwise determined by the board, the compensation committee of the Sarbanes-Oxley Act relativeboard shall administer the 2020 LTI Plan. The maximum number of options and stock appreciation rights, in the aggregate, which may be awarded to testingany individual key employee during any calendar year is 100,000. The maximum number of internaloptions and stock appreciation rights, in the aggregate, which may be awarded to any non-employee director during any calendar year is 10,000 or, if such award is payable in cash, the fair market value equivalent thereof. The maximum number of shares of restricted stock or shares subject to a restricted stock units award that may be granted during any calendar year is 225,000 shares to any individual key employee and 10,000 shares to any individual non-employee director. Subject to certain change in control provisions, the 2020 LTI Plan provides that all awards of will vest as the compensation committee determines in the award agreement, provided that no awards will vest sooner than 1/3 per year over financial reporting. The Committee has further discussed withthe independent registered public accounting firmfirst three anniversaries of the mattersaward. United Bankshares adopted a clawback policy that applies to named executive officers and other executive officers and permits the compensation committee to cancel certain awards and to recoup gains realized from previous awards should United Bankshares be required to be discussedprepare an accounting restatement due to materially inaccurate performance metrics. A Form S-8 was filed on May 29, 2020 with itthe SEC to register all the shares which are available for issuance underPCAOB Auditing Standard AS 1301, Communication with Audit Committees, and Rule 2-07 the 2020 LTI Plan. As of Regulation S-X promulgated bySeptember 27, 2021, the Securities and Exchange Commission, as modified or supplemented.
number of shares of United Bankshares common stock underlying awards issued under the 2020 LTI Plan that remain in effect are 330,484 shares.
The Audit Committee2020 LTI Plan replaces the 2016 Long-Term Incentive Plan, or the 2016 LTI Plan, which expired on May 18, 2021. United Bankshares currently has received the written disclosuresoptions and the letterrestricted stock awards outstanding from the independent registered public accounting firm required2016 LTI Plan and various plans other than the 2020 LTI Plan, or the Prior Plans; however, no shares of United Bankshares common stock are available for grants under the Prior Plans as these plans have expired. Awards outstanding under the Prior Plans will remain in effect in accordance with their respective terms. The maximum term for options granted under the plans is 10 years. As of September 27, 2021, the number of shares of United Bankshares common stock underlying option awards and restricted stock awards issued under Prior Plans that remain in effect are 1,869,061 shares.
In October 2019, the United Bankshares board of directors approved a stock repurchase plan, whereby United Bankshares could buy up to 4,000,000 shares of its common stock in the open market. As of September 27, 2021, United Bankshares had repurchased 966,204 shares under the repurchase plan.
Voting Rights. United Bankshares has only one class of stock issued and outstanding and all voting rights are vested in the holders of United Bankshares common stock. On all matters subject to a vote of shareholders, the shareholders of United Bankshares will be entitled to one vote for each share of common stock owned. United Bankshares does not have a classified board of directors. Shareholders of United Bankshares have cumulative voting rights with regard to election of directors. At the present time, no senior securities of United Bankshares are outstanding, nor does the board of directors presently contemplate issuing senior securities.
Dividend Rights. The shareholders of United Bankshares are entitled to receive dividends when and as declared by PCAOB Rule 3526, Communication with Audit Committees Regarding Independence.its board of directors. Dividends have been paid quarterly. Dividends were $1.05 for the first nine months of 2021, $1.40 per share in 2020, $1.37 per share in 2019 and $1.36 per share in 2018. The Committee has also discussed with the independent registered public accounting firm its independence and has considered whether the provisionpayment of specific non-audit services by the independent registered public accounting firmdividends is compatible with maintaining its independence.
The Audit Committee has discussed with management its assessment of the effectiveness of internal control over financial reporting and has also discussed withthe independent registered public accounting firm its opinion as to the effectiveness of the Company’s internal control over financial reporting.
Based on the review and discussions described in this report, and subject to the restrictions set forth in the West Virginia Business Corporation Act and the limitations imposed by the Federal Reserve.
Payment of dividends by United Bankshares is dependent upon receipt of dividends from its banking subsidiaries. Payment of dividends by United Bankshares’ state member banking subsidiary is regulated by the West Virginia Business Corporation Act and the limitations imposed by the Federal Reserve and generally, the prior approval of the Federal Reserve is required if the total dividends declared by a state member bank in any calendar year exceeds its net profits, as defined, for that year combined with its retained net profits for the preceding two years. Additionally, prior approval of the Federal Reserve is required when a state member bank has deficit retained earnings but has sufficient current year’s net income, as defined, plus the retained net profits of the two preceding years. The Federal Reserve may prohibit dividends if it deems the payment to be an unsafe or unsound banking practice. The Federal Reserve has issued guidelines for dividend payments by state member banks emphasizing that proper dividend size depends on the bank’s earnings and capital.
Liquidation Rights. Upon any liquidation, dissolution or winding up of its affairs, the holders of United Bankshares common stock are entitled to receive pro rata all of the assets of United Bankshares for distribution to shareholders. There are no redemption or sinking fund provisions applicable to the common stock.
Assessment and Redemption. Shares of United Bankshares common stock presently outstanding are validly issued, fully paid and nonassessable. There is no provision for any voluntary redemption of United Bankshares common stock.
Transfer Agent and Registrar. The transfer agent and registrar for United Bankshares common stock is Computershare Limited.
On December 23, 2008, the shareholders of United Bankshares authorized the issuance of preferred stock up to 50,000,000 shares with a par value of $1.00 per share. The authorized preferred stock may be issued by the United Bankshares board of directors in one or more series, from time to time, with each such series to consist of such number of shares and to have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the United Bankshares board of directors. Currently, no shares of preferred stock have been issued.
The authorization of preferred stock will not have an immediate effect on the holders of United Bankshares common stock. The actual effect of the issuance of any shares of preferred stock upon the rights of the holders of common stock cannot be stated until the United Bankshares board of directors determines the specific rights of any shares of preferred stock. However, the effects might include, among other things, restricting dividends on common stock, diluting the voting power of common stock, reducing the market price of common stock or impairing the liquidation rights of the common stock without further action by the shareholders. Holders of the common stock will not have preemptive rights with respect to the preferred stock.
No holder of any share of the capital stock of United Bankshares has any preemptive right to subscribe to an additional issue of its capital stock or to any security convertible into such stock.
Certain Provisions of the Bylaws
Indemnification and Limitations on Liability of Officers and Directors
As permitted by the West Virginia Business Corporation Act, the United Bankshares articles of incorporation contain provisions that indemnify its directors and officers to the fullest extent permitted by West Virginia law. These provisions do not limit or eliminate the rights of United Bankshares or any shareholder to seek an injunction or any other non-monetary relief in the event of a breach of a director’s or officer’s fiduciary duty. In addition, these provisions apply only to claims against a director or officer arising out of his or her role as a director or officer and responsibilities describeddo not relieve a director or officer from liability if he or she engaged in this reportwillful misconduct or a knowing violation of the criminal law or any federal or state securities law.
In addition, the United Bankshares articles of incorporation provide for the indemnification of both directors and officers for expenses that they incur in connection with the defense or settlement of claims asserted against them in their capacities as directors and officers. This right of indemnification extends to judgments or penalties assessed against them. United Bankshares has limited its exposure to liability for indemnification of directors and officers by purchasing directors and officers liability insurance coverage.
The rights of indemnification provided in the United Bankshares articles of incorporation are not exclusive of any other rights that may be available under any insurance or other agreement, by vote of shareholders or disinterested directors or otherwise.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling United Bankshares pursuant to the foregoing provisions, United Bankshares has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Shares Eligible for Future Sale
All of the shares that will be exchanged for shares of United Bankshares common stock upon consummation of the merger will be freely tradable without restriction or registration under the Securities Act.
United Bankshares cannot predict the effect, if any, that future sales of shares of its common stock, or the availability of shares for future sales, will have on the market price prevailing from time to time. Sales of substantial amounts of shares of United Bankshares common stock, or the perception that such sales could occur, could adversely affect the prevailing market price of the shares.
COMPARATIVE RIGHTS OF SHAREHOLDERS
The rights of United Bankshares shareholders are governed by the West Virginia Business Corporation Act. The rights of Community Bankers Trust shareholders are governed by the Virginia Stock Corporation Act. The rights of shareholders under both corporations are also governed by their respective articles of incorporation and bylaws. Following the merger, the rights of Community Bankers Trust shareholders that receive United Bankshares common stock will be governed by the articles and bylaws of United Bankshares. This summary does not purport to be a complete discussion of, and is qualified in its charter, the Audit Committee recommendedentirety by reference to, Community Bankers Trust’s articles of incorporation and bylaws, United Bankshares’ articles of incorporation and bylaws, Virginia law and West Virginia law.
Authorized Capital Stock
United Bankshares | Community Bankers Trust | |
200,000,000 shares of common stock, $2.50 par value per share and 50,000,000 shares of preferred stock, $1.00 par value per share. | 200,000,000 shares of common stock, $0.01 par value per share and 5,000,000 shares of preferred stock, $0.01 par value per share. |
Preemptive Rights
United Bankshares | Community Bankers Trust | |
The United Bankshares articles of incorporation provide that shareholders do not have preemptive rights to purchase, subscribe for, or take any part of any stock, whether unissued or treasury shares, or any part of the notes, debentures, bonds or other securities issued, optioned or sold by United Bankshares. | The articles of incorporation of Community Bankers Trust do not provide for preemptive rights to subscribe to or purchase any shares of any class of stock of Community Bankers Trust. |
Size of Board of Directors
United Bankshares | Community Bankers Trust | |
United Bankshares’ bylaws provide that the board of directors shall consist of at least 5 and no more than 35 directors, provided that the number may be increased or decreased from time to time by an amendment to the bylaws, but no decrease shall have the effect of shortening the term of any incumbent director. The United Bankshares board of directors currently consists of 13 individuals, all of whom are elected annually. | Community Bankers Trust’s bylaws provide that the board of directors shall be as fixed in such manner as may be determined by the vote of a majority of the directors then in office, but shall not be less than one. The Community Bankers Trust board of directors currently consists of 10 individuals. |
Cumulative Voting for Directors
Cumulative voting entitles each shareholder to cast an aggregate number of votes equal to the Boardnumber of voting shares held, multiplied by the number of directors to be elected. Each shareholder may cast all of his or
her votes for one nominee or distribute them among two or more nominees, thus permitting holders of less than a majority of the outstanding shares of voting stock to achieve board representation. Where cumulative voting is not permitted, holders of all outstanding shares of voting stock of a corporation elect the entire board of directors of the corporation.
United Bankshares | Community Bankers Trust | |
United Bankshares shareholders are allowed to cumulate their votes in the election of directors. Each share of United Bankshares stock may be voted for as many individuals as there are directors to be elected. Directors are elected by a plurality of the votes cast by the holders entitled to vote at the meeting. | Community Bankers Trust shareholders are not allowed to cumulate their votes in the election of directors. Directors are elected at any meeting of shareholders at which a quorum is present if the votes cast for such director exceed the votes cast against such director, provided, however, that directors shall be elected by a plurality of the votes cast by the holders entitled to vote at the meeting if the number of director nominees is greater than the number of directors to be elected. |
Classes of Directors
United Bankshares | Community Bankers Trust | |
United Bankshares only has one class of directors. | Community Bankers Trust has three classes of directors, with directors serving staggered three-year terms. |
Qualifications of Directors
United Bankshares | Community Bankers Trust | |
United Bankshares has retirement provisions based on age and minimum requirements for stock ownership for outside directors in its Corporate Governance Policy. | Community Bankers Trust has retirement provisions based on age in its corporate governance guidelines. |
Filling Vacancies on the Board
United Bankshares | Community Bankers Trust | |
United Bankshares’ bylaws provide that each vacancy existing on the board of directors and any directorship to be filled by reason of an increase in the number of directors, unless the articles of incorporation or bylaws provide that a vacancy shall be filled in some other manner, may be filled by the affirmative vote of a majority of the remaining directors at an annual, regular or special meeting of the board of directors. Any directorship to be filled by the board of directors by reason of a vacancy or an increase in the number of directors may be filled for a term of office continuing only until the next election of directors by the shareholders. | Community Bankers Trust’s articles of incorporation and bylaws provide that any vacancy in the board of directors, including vacancies resulting from any increase in the authorized number of directors may be filled by a vote of the remaining directors then in office, although less than a quorum, or by a sole remaining director and the directors so chosen shall hold office until the next annual meeting of shareholders and until their successors are duly elected and qualified, or until their earlier death, resignation or removal. |
Removal of Directors
United Bankshares | Community Bankers Trust | |
Under West Virginia law any member of the board may be removed, with or without cause, by the affirmative vote of a majority of all the votes entitled to be cast for the election of directors; provided, however, that a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the director’s removal. | Community Bankers Trust’s bylaws provide that any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote at an election of directors. The notice calling such meeting shall state the intention to act upon such matter, and the vacancy or vacancies, if any, caused by such removal shall be filled at such meeting by a vote of the holders of a majority of the shares entitled to vote at an election of directors. |
Notice of Shareholder Proposals and Director Nominations
United Bankshares | Community Bankers Trust | |
Shareholders may make a nomination for director provided that such nomination or nominations must be made in writing, signed by the shareholder and received by the Chairman or President of United Bankshares no later than 10 days from the date the notice on the meeting of shareholders was mailed; however, in the event the notice is mailed less than 13 days prior to the meeting, such nomination or nominations must be received no later than three days prior to any meeting of the shareholders wherein directors are to be elected. United Bankshares’ bylaws do not address shareholder proposals except with regard to the nomination of directors. | Community Bankers Trust’s bylaws provide that any shareholder may propose business to be considered at the annual meeting of shareholders, or nominate an individual for election to the board, only if written notice of such proposed business or nomination has been given to, and received by, the Secretary of Community Bankers Trust not less than 60 nor more than 90 days prior to the date of the scheduled annual meeting; provided, however, in the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given or made, notice by the shareholder must be so received not later than the close of business on the 10th day following the earlier of the day on which such notice of the date of the meeting was mailed or the day on which such public disclosure was made. If proposing business, the shareholder’s written notice must include, (a) as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, and (ii) any material interest of the shareholder in such business, and (b) as to the shareholder giving the notice (i) the name and record address of the shareholder and (ii) the class, series and number of shares of capital stock of Community Bankers Trust which are beneficially owned by the shareholder. If nominating a director, the shareholder’s written notice must include, (a) the name, age, business address and residence address of the person, (b) the principal occupation or employment of the person, (c) the class and number |
of shares of capital stock of Community Bankers Trust which are beneficially owned by the person, and (d) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the rules and regulations of the SEC under Section 14 of the Exchange Act, as amended. As to the shareholder giving the notice (a) the name and record address of the shareholder and (b) the class and number of shares of capital stock of Community Bankers Trust which are beneficially owned by the shareholder must be included. |
Anti-Takeover Provisions – Business Combinations
United Bankshares | Community Bankers Trust | |
United Bankshares’ articles of incorporation and bylaws do not contain any anti-takeover provisions. In addition, West Virginia corporate law does not contain statutory provisions concerning restrictions on business combinations. | Community Bankers Trust’s articles of incorporation and bylaws do not contain any anti-takeover provisions. Under Virginia law, there are statutory provisions concerning “affiliated transactions” and “control share acquisitions,” neither of which is applicable to the transactions contemplated by the merger. |
Shareholder Action Without a Meeting
West Virginia law provides that action required or permitted by law to be taken at a shareholders’ meeting may be taken without a meeting and without prior notice, if a written consent which describes the audited financial statements be includedaction is signed by all of the shareholders entitled to vote on the matter and is filed with the records of the shareholder meeting.
Unless otherwise set forth in the Company’s Annual Reportcorporation’s articles of incorporation, Virginia law provides that action required or permitted by law to be adopted or taken at a shareholders’ meeting may be adopted or taken without a meeting and if the action is adopted or taken by all shareholders entitled to vote on Form 10-Kthe action, and any such written consent shall be signed by all shareholders entitled to vote on the action, bear the date of each signature and delivered for inclusion with the year ended December 31, 2018.minutes or corporate records of the corporation.
United Bankshares | Community Bankers Trust | |
United Bankshares’ articles of incorporation and bylaws are silent as to shareholder action without a meeting. Accordingly, West Virginia law would govern. | Community Bankers Trust’s bylaws provide that any action required to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. |
Calling Annual Meetings of Shareholders
United Bankshares | Community Bankers Trust | |
The annual meeting of the shareholders of United Bankshares shall be held on the third Monday in May of each calendar year or on such other date as may be designated in the notice and call of such meeting, at the principal office of United Bankshares, or at such other place either within or without the State of West Virginia as the board of directors shall, from time to time, determine, and the place and the hour at which such meeting shall be held shall be stated in the notice and call of such meeting. | The annual meeting of shareholders for the election of directors and for the transaction of whatever other business may properly come before the meeting, shall be held at such date, time and place, either within or without the Commonwealth of Virginia, as may be designated from time to time by the Board of Directors and stated in the notice of the meeting |
Notice of Meetings
United Bankshares | Community Bankers Trust | |
United Bankshares’ bylaws require that the notice of annual and special meetings be given by mailing to each shareholder a written notice specifying the time and place of such meeting, and, in the case of special meetings, the business to be transacted. The notice must be mailed to the last addresses of the shareholders as they respectively appear upon the books of United Bankshares, and in the case of annual meetings, not less than 10 days, and in the case of special meetings, not less than 5 days, before the date of such meeting. | Notice of any annual or special meeting of Community Bankers Trust shareholders must be mailed postage prepaid, at least 10 days prior to but not more than 60 days prior to the date thereof, addressed to each shareholder at his or her address appearing on the books of Community Bankers Trust unless notice is waived by unanimous consent of all shareholders. However, Virginia law requires that for a meeting of shareholders to act on an amendment to the articles of incorporation, a plan of merger, a share exchange or certain other extraordinary measures specified by Virginia law, notice must be given at least 25 days prior to, but not more than 60 days prior to, the meeting. |
Vote Required for Amendments to Articles of Incorporation and Certain Transactions
West Virginia law and Virginia law provide that on matters other than the election of directors and certain extraordinary corporate actions, if a quorum is present, then action on a matter is approved if the votes cast favoring the action exceed the votes cast opposing the action, unless the vote of a greater number is required by law or the articles of incorporation or bylaws. The articles of incorporation or bylaws of United Bankshares and Community Bankers Trust do not require a greater number. An abstention is not considered a “vote cast” for purposes of the voting requirements, but a shareholder who abstains in person or by proxy is considered present for purposes of the quorum requirement.
United Bankshares | Community Bankers Trust | |
Under West Virginia law, the United Bankshares articles of incorporation may be amended by the affirmative vote of a majority of all votes of shareholders entitled to be cast on the matter, unless a | Under Virginia law, any amendments to a corporation’s articles of incorporation must be approved by a majority of each voting group entitled to vote on the amendment by more than two-thirds of |
different number is specified in the articles of incorporation or required by the board of directors. The United Bankshares articles of incorporation do not specify a different number. Under West Virginia law, a consolidation, merger, share exchange or transfer must be approved by the shareholders of the corporation at a meeting at which a quorum exists consisting of at least a majority of the votes entitled to be cast on the matter. The United Bankshares articles of incorporation do not provide for a different number. | all the votes entitled to be cast by that voting group. The articles of incorporation may provide for a greater or lesser vote or a vote by separate voting groups so long as the vote provided for is not less than a majority of all the votes cast on the amendment by each voting group entitled to vote on the amendment at a meeting at which a quorum of the voting group exists. Community Bankers Trust’s amended and restated articles of incorporation are silent as to voting required for amendments, therefore the two-thirds requirement outlined above is necessary for any amendment to the articles of incorporation. | |
Community Bankers Trust’s articles of incorporation provide that the directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the shareholders or at any meeting of the shareholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of Community Bankers Trust which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of shareholders be there represented in person or by proxy). Any contract or act would include a consolidation, merger, share exchange or transfer. |
Amendment of Bylaws
United Bankshares | Community Bankers Trust | |
Under West Virginia law, the United Bankshares bylaws may be amended by the affirmative vote of a majority of all votes of shareholders entitled to be cast on the matter, unless a different number is specified in the articles of incorporation or required by the board of directors. The United Bankshares articles of incorporation do not specify a different number. Under West Virginia law and United Bankshares’ bylaws, both the board of directors and shareholders have the power to amend the bylaws. | Community Bankers Trust’s bylaws may be amended or repealed at any meeting of the board of directors, by a vote of a majority of the total number of directors present at the meeting at which there is a quorum, or at any special or annual meeting of shareholders, by a vote of a majority of the shares of Community Bankers Trust’s capital stock issued, outstanding and entitled to vote, so represented in person or by proxy at the meeting if there is a quorum. |
Appraisal Rights
United Bankshares | Community Bankers Trust | |
Under West Virginia law, shareholders are generally entitled to object and receive payment of the fair value of their stock in the event of any of the following corporate actions: merger, transfer of all or substantially all of the corporation’s assets, participation in a share exchange as the corporation the stock of which is to be acquired, or an amendment to the articles of incorporation that reduces the number of shares of a class or series owned by shareholders to a fraction of a share if the corporation has the obligation or right to repurchase the fractional shares. However, appraisal rights are not available to shareholders in the event of one of the foregoing corporate actions if the stock is (i) listed on the New York Stock Exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held by 2,000 or more shareholders and the outstanding shares of stock, excluding shares held by affiliates or shareholders holding more than 10% of the outstanding shares, have an aggregate market value of $20 million or more. Appraisal rights will not be available to the shareholders of United Bankshares in connection with the proposed merger of Community Bankers Trust into United Bankshares because the stock of United Bankshares is designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. | Under Virginia law, shareholders are generally entitled to object and receive payment of the fair value of their stock in the event of any of the following corporate actions: merger, transfer of all or substantially all of the corporation’s assets, participation in a share exchange as the corporation the stock of which is to be acquired, or an amendment to the articles of incorporation that reduces the number of shares of a class or series owned by shareholders to a fraction of a share if the corporation has the obligation or right to repurchase the fractional shares. However, appraisal rights are not available to shareholders in the event of one of the foregoing corporate actions if the stock is traded in an organized market or the company has more than 2,000 shareholders. Appraisal rights will not be available to the shareholders of Community Bankers Trust in connection with the proposed merger because the stock of Community Bankers Trust is listed on Nasdaq. |
Dividends
United Bankshares | Community Bankers Trust | |
A West Virginia corporation generally may pay dividends in cash, property or its own shares except when the corporation is unable to pay its debts as they become due in the usual course of business or the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of the dividend, to satisfy any shareholders who have rights superior to those receiving the dividend. | A Virginia corporation generally may pay dividends in cash, property or its own shares except when the corporation is unable to pay its debts as they become due in the usual course of business or the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of the dividend, to satisfy any shareholders who have rights superior to those receiving the dividend. In addition, as is true for Community Bankers Trust, other restrictions may apply under laws and regulations affecting bank holding companies, including the responsibility to maintain adequate capital in its banking subsidiary. |
In performing all
Discharge of these functions,Duties; Exculpation and Indemnification
West Virginia law requires that a director of a West Virginia corporation discharge duties as a director in good faith, in a manner reasonably believed to be in the Audit Committee acts only in an oversight capacity. In its oversight role, the Committee relies on the work andassurances of theCompany’smanagement, which has the primary responsibility for financial statements andreports and the Company’s internal control over financial reporting, and of the independent registered public accounting firmwho, in its reports, expresses opinions on the conformity of the Company’sannual consolidated financial statements with generally accepted accounting principles and on the effectivenessbest interest of the Company’s internal control over financial reporting.corporation and with the care that a person in a like position would reasonably believe appropriate under similar circumstances.
Virginia law requires that a director of a Virginia corporation discharge duties as a director in accordance with his or her good faith business judgment of the best interests of the corporation.
United Bankshares | Community Bankers Trust | |
United Bankshares’ articles of incorporation provide that each director or officer of United Bankshares shall be indemnified for costs and expenses arising out of any criminal or civil suit or proceeding against the director or officer by reason of being a director or officer of United Bankshares. However, a director or officer shall not be indemnified if he or she is adjudged in such suit or proceeding to be liable for gross negligence or willful misconduct in performance of a duty owed to the corporation. | Community Bankers Trust’s articles of incorporation provide that a director or officer of Community Bankers Trust shall not be liable to Community Bankers Trust or its shareholders for monetary damages, except for liability resulting from such person having engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities law. Community Bankers Trust’s articles of incorporation provide that the corporation shall indemnify (a) any person who was or is a party to any proceeding, including a proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, by reason of the fact that he or she is or was a director or officer of the corporation, or (b) any director or officer who is or was serving at the request of the corporation as a director, trustee, partner or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability incurred by him or her in connection with such proceeding unless he or she engaged in willful misconduct or a knowing violation of the criminal law. The directors, by majority vote of a quorum consisting of disinterested directors, may cause the corporation to indemnify or contract to indemnify any person who was, is or may become a party to any proceeding, by reason of the fact that he or she is or was an employee or agent of the corporation, or is or was serving at the request of the corporation as director, officer or employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
Audit CommitteeUNITED BANKSHARES
The following table sets forth certain information as of September 27, 2021, concerning the number and percentage of shares of United Bankshares common stock beneficially owned by each of United Bankshares’ directors and named executive officers and by United Bankshares’ directors and executive officers as a group. In addition, the table includes information with respect to persons known to United Bankshares who own or may be deemed to own more than 5% of United Bankshares common stock as of September 27, 2021. Beneficial ownership includes shares, if any, held in the name of the spouse, minor children or other relatives of the individual living in such person’s home, as well as shares, if any, held in the name of another person under an arrangement whereby the director, or executive officer can vest title in himself or herself at once or at some future time. Except as otherwise indicated, all shares are owned directly, the named person possesses sole voting and sole investment power with respect to all such shares, and none of such shares are pledged as security.
Number of Shares Beneficially Owned (2) | Percentage of Class Beneficially Owned | |||||||
5% Shareholders: | ||||||||
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | 16,623,013 | (3) | 12.87 | % | ||||
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | 12,032,542 | (4) | 9.31 | % | ||||
State Street Corporation One Lincoln Street, Boston, MA 02111 | 9,280,760 | (5) | 7.18 | % | ||||
Directors: | ||||||||
Richard M. Adams(1) | 1,131,740 | * | ||||||
Charles L. Capito, Jr. | 6,009 | * | ||||||
Peter A. Converse | 434,302 | * | ||||||
Michael P. Fitzgerald | 207,813 | * | ||||||
Theodore J. Georgelas | 53,571 | * | ||||||
Patrice A. Harris, MD, MA, FAPA | 5,054 | * | ||||||
J. Paul McNamara | 80,485 | * | ||||||
Mark R. Nesselroad | 70,158 | * | ||||||
Jerold L. Rexroad | 148,280 | * | ||||||
Albert H. Small, Jr. | 9,660 | * | ||||||
Mary K. Weddle | 16,963 | * | ||||||
Gary G. White | 33,984 | * | ||||||
P. Clinton Winter | 521,802 | * | ||||||
Named Executive Officers: | ||||||||
Richard M. Adams, Jr. | 196,448 | * | ||||||
James J. Consagra, Jr. | 171,212 | * | ||||||
W. Mark Tatterson | 126,362 | * | ||||||
Darren K. Williams | 60,709 | * | ||||||
Directors and Executive Officers as a group (18 persons): | 5,993,682 | 4.64 | % |
Gerald F. Barber, Chair
* | Percentage of ownership is less than one percent of the outstanding shares of United Bankshares common stock. |
William E. Hardy
Footnotes:
Troy A. Peery, Jr.
(1) | Richard M. Adams is also a Named Executive Officer. |
(2) | Amounts reflect shares of common stock that could be acquired through the exercise of stock options within 60 days after September 27, 2021. Amounts also Include stock held by United Bank’s Trust Department which shares beneficial ownership as described in this footnote. The following directors each exercise voting authority over the number of shares indicated as follows: Ms. Weddle, 7,787 shares and Mr. Winter, 33,563 shares. United Bank’s Board of Directors exercises voting authority over 2,653,086 shares held by United Bank’s Trust Department. All of these shares are included in the 5,993,682 shares held by all directors and executive officers as a group. Also includes shares pledged as collateral as follows: Mr. Converse, 100,000 shares; Mr. Georgelas, 44,428 shares; and Mr. Winter, 112,412 shares. |
(3) | BlackRock, Inc., or BlackRock, is a global investment management firm that serves institutional and retail clients, including pension funds, foundations, endowments, official institutions, insurance companies, subadvisory relationships, high net worth individuals, family offices and private banks. BlackRock beneficially owns 16,623,013 or 12.87% of United Bankshares’ common stock. BlackRock holds sole dispositive authority for the 16,623,013 shares and sole voting authority over 16,379,199 shares. BlackRock’s address and holdings are based solely on a Schedule 13G filing with the Securities and Exchange Commission dated January 26, 2021 made by BlackRock setting forth information as of December 31, 2020. The Percentage of Class Beneficially owned is based on United Bankshares’ 129,202,878 issued and outstanding shares as of September 27, 2021. |
(4) | The Vanguard Group, or Vanguard, is one of the world’s largest investment management companies, serving individual investors, institutions, employer-sponsored retirement plans, and financial professionals. Vanguard beneficially owns 12,032,542 or 9.31% of United Bankshares’ common stock. Of these beneficially-owned shares, Vanguard holds shared voting authority over 125,219 shares, sole dispositive authority over 11,800,633 shares, and shared dispositive authority over 231,909 shares. Vanguard’s address and holdings are based solely on a Schedule 13G filing with the Securities and Exchange Commission dated February 8, 2021 made by Vanguard setting forth information as of December 31, 2020. The Percentage of Class Beneficially owned is based on United Bankshares’ 129,202,878 issued and outstanding shares as of September 27, 2021. |
(5) | State Street Corporation. or State Street, is a global financial services provider that offers a flexible suite of services that spans the investment spectrum, including investment management, research and trading, and investment servicing. State Street beneficially owns 9,280,760 or 7.18% of United Bankshares’ common stock. State Street holds shared dispositive authority for the 9,280,760 shares and shared voting authority over 8,773,805 shares. State Street’s address and holdings are based solely on a Schedule 13G filing with the Securities and Exchange Commission dated February 11, 2021 made by State Street setting forth information as of December 31, 2020. The Percentage of Class Beneficially owned is based on United Bankshares’ 129,202,878 issued and outstanding shares as of September 27, 2021. |
S. Waite Rawls III
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF COMMUNITY BANKERS TRUST
The following table sets forth certain information as of September 27, 2021, concerning the number and percentage of shares of Community Bankers Trust common stock beneficially owned by each of Community Bankers Trust’s directors and named executive officers and by Community Bankers Trust’s directors and executive officers as a group. No persons known to Community Bankers Trust own or may be deemed to own more than 5% of Community Bankers Trust common stock. Beneficial ownership includes shares, if any, held in the name of the spouse, minor children or other relatives of the individual living in such person’s home, as well as shares, if any, held in the name of another person under an arrangement whereby the director, or executive officer can vest title in himself or herself at once or at some future time. Except as otherwise indicated, the named person possesses sole voting and sole investment power with respect to all such shares, and none of such shares are pledged as security.
Number of Shares of Common Stock Beneficially Owned (2) | Exercisable Options for Common Stock | Percentage of Class Beneficially Owned | ||||||||||
Directors: | ||||||||||||
Gerald F. Barber | 38,094 | — | * | |||||||||
Hugh M. Fain, III | 16,242 | — | * | |||||||||
William E. Hardy | 45,653 | — | * | |||||||||
Ira C. Harris | 3,945 | — | * | |||||||||
Gail L. Letts | 7,151 | — | * | |||||||||
Eugene S. Putnam, Jr. | 115,041 | — | * | |||||||||
S. Waite Rawls III | 58,062 | — | * | |||||||||
Rex L. Smith, III (1) | 128,653 | 255,000 | * | |||||||||
Oliver L. Way | 32,988 | — | * | |||||||||
Robin Traywick Williams | 88,690 | — | * | |||||||||
Named Executive Officers: | ||||||||||||
Bruce E. Thomas | 17,037 | 81,250 | * | |||||||||
Jeff R. Cantrell | 30,875 | 72,500 | * | |||||||||
John M. Oakey, III | 25,475 | 141,250 | * | |||||||||
Current Directors and Executive Officers as a Group (16 persons) | 623,633 | 702,500 | 5.72 | % |
* |
|
(1) | Rex L. Smith, III is also a Named Executive Officer. |
(2) | Amounts reflect whole numbers of shares only. Certain directors and executive officers own a fractional share of common stock as a result of automatic dividend reinvestments. Amounts also include the following shares of common stock that the individual owns directly or indirectly through affiliated corporations, close relatives and dependent children or as custodians or trustees: Barber, 6,347 shares; Letts, 149 shares; Putnam, 3,200 shares; and Williams, 4,260 shares. |
(3) | Amounts reflect shares of common stock that could be acquired through the exercise of stock options within 60 days after September 27, 2021. |
Williams Mullen and Bowles Rice LLP will opine as to the qualification of the merger as a reorganization within the meaning of Section 368(a) of the Code. Bowles Rice LLP will opine as to the legality of the common stock of United Bankshares offered by this prospectus and proxy statement.
The consolidated financial statements of United Bankshares appearing in United Bankshares’ Annual Report (Form 10-K) for the year ended December 31, 2020, and the effectiveness of United Bankshares’ internal control over financial reporting as of December 31, 2020, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Community Bankers Trust appearing in Community Bankers Trust’s Annual Report on Form 10-K for the year ended December 31, 2020, have been audited by Yount, Hyde, & Barbour. P.C., independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
COMMUNITY BANKERS TRUST ANNUAL MEETING SHAREHOLDER PROPOSALS
If the merger is completed, Community Bankers Trust will not have public shareholders and there will be no public participation in any future meeting of shareholders. However, if the merger is not completed or if Community Bankers Trust is otherwise required to do so under applicable law, Community Bankers Trust will hold a 2022 annual meeting of shareholders. Any nominations for directors or proposals for other business intended to be presented at Community Bankers Trust’s next annual meeting must be submitted to Community Bankers Trust as set forth below.
All proposals, including nominations for directors, submitted by shareholders for presentation in the proxy statement for the 2022 annual meeting of shareholders must comply with the SEC’s rules regarding shareholder proposals. In addition, the Community Bankers Trust’s Bylaws require that for any business to be properly brought before an annual meeting by a shareholder, the Community Bankers Trust’s Secretary must have received written notice thereof not less than 60 nor more than 90 days prior to the meeting (or not later than 10 days after a notice or public disclosure of such meeting date if such disclosure occurs less than 70 days prior to the date of the meeting). The notice must set forth:
for nominations for directors, as to each person whom the shareholder proposes to nominate for election as a director
the name, age, business address and residence address of the person;
the principal occupation or employment of the person;
the class and number of shares of capital stock of the Community Bankers Trust that are beneficially owned by the person; and
any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the rules and regulations of the SEC; and
for other business, as to each matter the shareholder proposes to bring before the annual meeting
a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; and
any material interest of the shareholder in such business; and
as to the shareholder giving the notice
the name and record address of the shareholder; and
the class, series and number of shares of capital stock of the Community Bankers Trust that are beneficially owned by the shareholder.
The proxies will have discretionary authority to vote on any matter that properly comes before the meeting if the shareholder has not provided timely written notice as required by the Community Bankers Trust Bylaws.
Any proposal of a shareholder intended to be presented at the Community Bankers Trust’s 2022 annual meeting of shareholders and included in the proxy statement and form of proxy for that meeting must be received by the Corporate Secretary of Community Bankers Trust no later than December 20, 2021.
WHERE YOU CAN FIND MORE INFORMATION
United Bankshares filed with the SEC under the Securities Act the registration statement on Form S-4 to register the shares of United Bankshares common stock to be issued to Community Bankers Trust shareholders in connection with the merger. The registration statement, including the exhibits and schedules thereto, contains additional relevant information about United Bankshares and its common stock. The rules and regulations of the SEC allow United Bankshares to omit certain information included in the registration statement from this prospectus and proxy statement. This prospectus and proxy statement is part of the registration statement and is a prospectus of United Bankshares in addition to being Community Bankers Trust’s proxy statement for its special meeting.
Both United Bankshares (File No. 002-86947) and Community Bankers Trust (File No. 01-32590) file reports, proxy statements and other information with the SEC under the Exchange Act. The SEC maintains a website at http://www.sec.gov where you can access reports, proxy information and registration statements, and other information regarding registrants that file electronically with the SEC. United Bankshares and Community Bankers Trust also post their SEC filings on their respective websites. The website addresses are www.ubsi-inc.com and www.cbtrustcorp.com, respectively. Information contained on the United Bankshares website or the Community Bankers Trust website is not incorporated by reference into this prospectus and proxy statement, and you should not consider information contained in its website as part of this prospectus and proxy statement.
The SEC allows United Bankshares and Community Bankers Trust to “incorporate by reference” information into this prospectus and proxy statement. This means that we can disclose important information to you by referring you to another document filed separately by United Bankshares and Community Bankers Trust with the SEC. The information incorporated by reference is considered to be a part of this prospectus and proxy statement, except for any information that is superseded by information that is included directly in this prospectus and proxy statement or by information contained in documents filed with or furnished to the SEC after the date of this prospectus and proxy statement.
This prospectus and proxy statement incorporates by reference the documents listed below that United Bankshares has previously filed with the SEC, other than, in each case, documents or information deemed to have been furnished and not filed according to the SEC rules:
• Annual Report on Form 10-K | Year ended December 31, 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• Quarterly Reports on Form 10-Q | Filed on May 10, 2021 and August 9, 2021. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Filed on March 30, 2021. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• Current Reports on Form 8-K | Filed on February 26, 2021, May 17, 2021 and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• The description of United Bankshares common stock set forth in United Bankshares’ registration statement on Form 8-A filed pursuant to
This prospectus and proxy statement incorporates by reference the documents listed below that Community Bankers Trust has previously filed with the SEC, other than, in each case, documents or information deemed to have been furnished and not filed according to the SEC rules:
United Bankshares and Community Bankers Trust also incorporate by reference additional documents that may be filed under Sections 13(a) and 15(d) of the Exchange Act with the SEC between the date of this prospectus and proxy statement and the date of Community Bankers Trust’s special meeting of shareholders or the termination of the merger agreement. These include periodic reports such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You can obtain additional copies of the documents incorporated by reference in this prospectus and proxy statement free of charge by requesting them in writing or by telephone from the following address:
If you would like to request any documents, please do so by November 9, 2021, in order to receive them before the Community Bankers Trust shareholder meeting. Neither United Bankshares nor Community Bankers Trust has authorized anyone to give any information or make any representation about the merger or the companies that is different from, or in addition to, that contained in this prospectus and proxy statement or in any of the materials that we have incorporated into this prospectus and proxy statement. United Bankshares or Community Bankers Trust take no responsibility for, and provide no assurances as to the reliability of, any other information that others may give you. Information in this prospectus and proxy statement about United Bankshares has been supplied by United Bankshares and information about Community Bankers Trust has been supplied by Community Bankers Trust. The information contained in this prospectus and proxy statement speaks only as of the date of this prospectus and proxy statement unless the information specifically indicates that another date applies. The representations, warranties and covenants described in this document and included in the merger agreement were made only for purposes of the merger agreement and as of specific dates, are solely for the benefit of United Bankshares and Community Bankers Trust, may be subject to limitations, qualifications or exceptions agreed upon by the parties, including those included in confidential disclosures made for the purposes of, among other things, allocating contractual risk between United Bankshares and Community Bankers Trust rather than establishing matters as facts, and may be subject to standards of materiality that differ from those standards relevant to investors. You should not rely on the representations, warranties or covenants or any description thereof as characterizations of the actual state of facts or condition of United Bankshares, Community Bankers Trust or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in public disclosures by United Bankshares or Community Bankers Trust. The representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this prospectus and proxy statement and in the documents incorporated by reference into this prospectus and proxy statement. See “Where You Can Find More Information” on page 99. Table of Contents
p FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED p
SignatureSignature, if held jointlyDate, 2021 Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. pFOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED p PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS COMMUNITY BANKERS TRUST CORPORATION The undersigned appoints Rex L. Smith, III, Bruce E. Thomas and John M. Oakey, III, and each or any of them, as proxies, each with the power to appoint his substitute, and authorizes each of them to represent and to vote, as designated on the reverse side, all of the shares of common stock of Community Bankers Trust Corporation (the “Company”) held of record by the undersigned at the close of business on September 27, 2021 at the Special Meeting of Shareholders of the Company to be held at the Deep Run 3 Building, 9954 Mayland Drive, Richmond, Virginia 23233 on November 16, 2021 at 10:00 a.m., local time, or at any adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED IN FAVOR OF PROPOSALS 1, 2 AND 3 AND IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS PROXY HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMMUNITY BANKERS TRUST CORPORATION. (Continued, and to be marked, dated and signed, on the other side) |