Mergers and Acquisitions

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Mergers and Acquisitions

NOTE B—MERGERS AND ACQUISITIONS

At the close of business on January 31, 2014, United acquired 100% of the outstanding common stock of Virginia Commerce Bancorp, Inc. (Virginia Commerce), a Virginia corporation headquartered in Arlington, Virginia. The results of operations of Virginia Commerce will be included in the consolidated results of operations from the date of acquisition.

At consummation, Virginia Commerce had assets of approximately $2.77 billion, loans of $2.10 billion and deposits of $2.02 billion. The transaction will be accounted for under the purchase acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged will be recorded at estimated fair value on the acquisition date.

In accordance of the merger agreement, each outstanding share of common stock of Virginia Commerce, par value $1.00 per share (other than shares held by United or its subsidiaries, in each case except for shares held by them in a fiduciary capacity or in satisfaction of a debt previously contracted) were converted into the right to receive 0.5442 shares of United common stock, par value $2.50 per share, plus cash in lieu of fractional shares. Shares of Virginia Commerce restricted stock that were outstanding immediately prior to the merger converted into the right to receive 0.5442 shares of United common stock, par value $2.50 per share, plus cash in lieu of fractional shares. Almost all of the shares of Virginia Commerce restricted stock fully vested upon the merger under the terms of the restricted stock agreements. Those shares of Virginia Commerce restricted stock that did not fully vest upon the merger were converted into restricted shares of United common stock in accordance with the exchange ratio. Also under the terms of the merger agreement, outstanding Virginia Commerce stock options, whether vested or not, converted into fully vested and exercisable stock options with respect to shares of United’s common stock, with appropriate adjustments to reflect the exchange ratio. As a result of the Merger, United issued approximately 18.3 million shares of its common stock for all of Virginia Commerce’s outstanding common stock and restricted stock, and issued options to purchase approximately 441 thousand shares of its common stock upon conversion of Virginia Commerce’s stock options. United paid approximately $8 thousand in cash to holders of Virginia Commerce common stock and restricted stock in lieu of fractional shares of United common stock. The cash was funded by cash on hand. Effective January 31, 2014, the warrant held by the U.S. Department of the Treasury (the Treasury) issued by Virginia Commerce in connection with the TARP Capital Purchase Program was purchased by United for $33.263 million. The repurchase price was based on the fair market value of the warrant as agreed upon by United and the Treasury. As a result of the repurchase by United, the warrant has been canceled.

Because the merger occurred on January 31, 2014, the initial accounting for the business combination is incomplete at this time. United is in the process of determining the fair values which are subject to refinement for up to one year after the closing date of the acquisition. United is using an independent third party to help determine the fair values of the acquired assets and liabilities. The resulting goodwill will not be deductible for income tax purposes as the acquisition is accounted for as a tax-free exchange for tax purposes.