Blairsville, Ga.-based United Community Banks Inc. agreed to acquire Huntsville, Ala.-based Progress Financial Corp. and unit Progress Bank and Trust in an all-stock transaction with an aggregate value of approximately $271.5 million, or $23.52 per share of Progress Financial common stock.
Under the terms of the merger agreement, Progress Financial shareholders will receive 0.77 share of United Community Banks common stock for each share of Progress Financial common stock outstanding.
The merger is expected to be accretive to United's EPS, excluding transaction costs, by approximately 7 cents per share, or 2.0% in 2023.
As of March 31, Progress Financial had total assets of $1.9 billion, total loans of $1.3 billion and total deposits of $1.7 billion, according to a news release. The company also offers wealth management and private banking through Progress Financial Services Inc., with approximately $1.2 billion in AUM.
At announcement, S&P Global Market Intelligence calculates the deal value to be 148.27% of common equity, 165.19% of tangible common equity, 14.43% of assets, 16.07% of deposits and 13.24x earnings. The tangible book premium to core deposits ratio is 7.85%.
Market Intelligence valuations for bank and thrift targets in the Southeast region between May 3, 2021, and May 3, 2022, averaged 155.46% of book and 163.41% of tangible book and had a median of 14.49x last-12-months earnings, on an aggregate basis.
The deal is expected to be completed in the fourth quarter.
Based on Market Intelligence data, with the completion of the transaction, United will enter Alabama with nine branches to be ranked No. 17 with a 0.92% share of approximately $141.29 billion in total market deposits. The company will also expand in Florida by three branches to be ranked No. 49 with a 0.20% share of approximately $813.16 billion in total market deposits.
Piper Sandler & Co. acted as financial adviser to United Community Banks, and Nelson Mullins Riley & Scarborough LLP was its legal adviser. Stephens Inc. was financial adviser to Progress Financial, and Maynard Cooper Gale served as its legal adviser.
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