CertusHoldings in Greenville, S.C., has agreed to sell its small business finance unit to BankUnited in Miami Lakes, Fla.
The $19.2 billion-asset BankUnited will also acquire a $203 million loan portfolio tied to the unit, which originates, sells and services loans under the Small Business Administration's 7(a) and CDC/504 programs. The unit also lends under two Department of Agriculture programs.
BankUnited said in documents included in a regulatory filing that it will pay about $233 million for the business. The Certus unit, which had about $273 million in originations last year, is expected to earn about $10 million next year.
BankUnited will pay a $20 million premium to the tangible net asset value of the acquired assets and assumed liabilities, subject to adjustment. The deal, which is expected to close in the second quarter, should be accretive to BankUnited's earnings in the first year; it should take less than two years to earn back any expected tangible book value dilution.
"This transaction will significantly improve CertusBank's liquidity and capital positions and allow us to focus our attention on returning to a more traditional community banking structure," John Poelker, Certus' chairman, president and chief executive, said in a press release Monday. "The small business finance unit has consistently been a strong performer and I'm confident our SBF teammates will continue to excel as they make the transition to BankUnited."
"The team's track record and reputation have been impressive and we believe they are a complementary fit to our dynamic and growing organization," John Kanas, BankUnited's chairman, president and chief executive, said.
BankUnited was advised by Cadwalader, Wickersham & Taft. Certus was advised by Keefe, Bruyette & Woods; Sandler O'Neill; and Nelson Mullins Riley & Scarborough.
The $1.5 billion-asset CertusBank is continuing to move past its history of high expenses and heavy losses. The company previously agreed to sell its home loan business to AmeriSave Mortgage, and its brokerage and investment-advisory businesses to Eximius Holdings, in separate transactions.
Poelker was hired after Certus fired its founders last April. The company was founded in 2011 to buy failed banks, but disappointed its backers after recording pretax losses of more than $100 million in 2012 and 2013. The company also lost nearly $70 million last year.
In addition to its losses, Certus faces uncertainty due to the firing of its three founders, Milton Jones, Walter Davis and Angela Webb, who were terminated weeks after an American Banker article focusing on the bank's poor financial performance and conflicts with investors. A fourth founder, Charles Williams, stepped down in late March.
Shortly after being terminated, Jones, Davis and Webb filed a lawsuit against Certus and Benjamin Weinger, a hedge fund investor, for libel and conspiracy, alleging that the plaintiffs were defamed and then fired as part of a racist scheme to seize control of the company. The case is pending in the U.S. District Court for South Carolina.