A round of layoffs is in store for dozens of local bank employees as a sizable merger heads to the finish line.
Essex Bank, headquartered in Henrico, plans to eliminate 51 positions as part of its pending deal to be acquired by larger peer United Bank. The deal, announced in June, will combine Essex’s $1.7 billion in total assets with United’s $27 billion.
The terminations are to begin Dec. 28 and will continue through Jan. 31, according to a notice the bank filed with the state in accordance with the WARN Act.
The affected positions all are based at Essex’s main office at Deep Run III at 9954 Mayland Drive. They include back office positions as well as upper-level executive positions such as the bank’s CFO, COO, chief risk officer and general counsel.
Such layoffs are common with big mergers, as the deals are often driven by cost savings of duplicative positions.
Essex CEO Rex Smith, who will stay on with United as a regional president, said employees have already been notified and some have already landed new jobs elsewhere.
With the deal expected to close Dec. 3, affected Essex employees will continue on the United Bank payroll until the layoffs begin Dec. 28.
The company said additional severance benefits will be announced to employees at a later date.
“United was generous with their severance payments and they have outplacement services they’re offering up to six month,” Smith said.
Aside from the pain of the layoffs, Smith said the deal is on track to close as expected. Both banks received regulatory approval for the deal and now await shareholder votes on Nov. 16.
“I don’t anticipate any issues,” Smith said. “We’re moving full steam ahead.”
The deal will mark the entrance for United into the Richmond market. The bank, based in both West Virginia and Washington, D.C., will acquire 100 percent of the stock of Essex’s parent company, Community Bankers Trust, for 0.31 shares of United stock.
Shares of United’s parent company closed at $38.37 on Wednesday. Community Bankers Trust stock closed at $12.11.
While the Essex brand will be eliminated in favor of the United Bank brand, Smith said United plans to retain Essex’s current operations in Deep Run III, as well as about two dozen Essex branches, save for two in Maryland that will be shuttered.
The Essex branches will add to United’s 223.