- Why it matters: Seller Peach State Bancorp has a sub-80% loan-to-deposit ratio, giving UCB plenty of capital to fuel future growth in Atlanta.
- Supporting data: The deal for Peach State would be UCB's seventh whole-bank transaction since 2020.
- Expert quote: "If we saw the right deal, which would have similar metrics and conditions to Peach State, I'd be more than happy to move forward with that." — UCB Chairman and CEO Lynn Harton
United Community Banks in South Carolina has agreed to pay $100.8 million in cash and stock for Gainesville, Georgia-based Peach State Bancshares. The deal, announced Tuesday, will end two decades of competition between the companies and give the combined bank the number-one market share in fast-growing Hall County, Georgia.
The sales price amounts to 194% of Peach State's tangible book value, which is substantially higher than the 149% average for 2026 mergers, according to Seaport Research Partners.
UCB's long familiarity with the seller, along with Hall County's strong growth characteristics, explains the premium, UCB CEO Lynn Harton said on a conference call with analysts.
"We know each other personally," Harton said. "We work in the community together. We go to school together. We go to church together. … There's a tremendous amount of mutual respect between the two teams, and I'm very excited to see them come together and continue to win in this market."
"As we considered potential partners to help move us into the next phase of our growth, it became clear that United Community was by far the best strategic fit," Peach State CEO Ron Quinn said in a press release.
UCB, the $28.2 billion-asset holding company for United Community Bank, also reported first-quarter 2026 earnings on Tuesday.
Net income totaled $84.3 million, up 18% from the same period in 2025. Year-over-year loan growth totaled 6%, while deposit costs fell 38 basis points to 1.67% on March 31. Quarterly total revenue of $277 million was essentially level with the fourth quarter of 2025 and up 11.7% from a year ago.
Credit quality remained solid, with net chargeoffs totaling 0.22% of average loans for the three months ending March 31. That total was roughly level with the first quarter of 2025, but down from the 0.34% net chargeoff rate reported for the fourth quarter.
Hall County, which includes the city of Gainesville, located about 55 miles northeast of Atlanta, ranks among Georgia's fastest-growing counties.
Its population has increased nearly 12% since 2020 to 227,000, according to the Census Bureau. Peach State Bank opened its doors in 2005, the same year that United Community Banks built its first branch there.
The $788 million-asset Peach State reported a 73% loan-to-deposit ratio at year-end 2025, another key factor behind the deal premium, according to Brean Capital analyst Christopher Marinac.
UCB "is hiring new commercial lenders in the Atlanta [metropolitan statistical area] who can utilize this excess liquidity," Marinac wrote in a research note.
UCB Chief Financial Officer Jefferson Harralson told analysts that Peach State's loan-to-deposit ratio was "nice to have in this acquisition."
"We see this as a valuable addition given the growth in the market and the connectivity to the rest of our North Georgia franchise," Harralson said in an interview following the conference call.
UCB is forecasting 3%-4% earnings-per-share accretion next year resulting from the Peach State acquisition, which is expected to close in the third quarter. UCB hopes to achieve cost savings amounting to 40% of Peach State's operating expenses, which totaled $15.7 million in 2025, according to Federal Deposit Insurance Corp. statistics.
Piper Sandler analyst Stephen Scouten described the merger in a research note as "a small but nicely accretive deal."
UCB has been an acquisitive bank historically, completing six whole-bank deals since 2020. The largest of those transactions, for the $3.1 billion-asset Reliant Bancorp in Brentwood, Tennessee, was announced in July 2021. But the past three deals, including the pending purchase of Peach State, have involved sellers with less than $1 billion of assets.
UCB is open to bigger deals, but years of consolidation have reduced the number of regional-bank targets, Harton said Tuesday. In the meantime, the company has seen good success with smaller combinations and expects to continue the trend with Peach State, he added.
"This is a great example of what we want to do in the merger-and-acquisition space," Harton said. "It is in-market, manageable size, a history of strong performance, great upside potential, and an attractive way to leverage capital and continue to grow our business and our brand."
Peach State reported net income of $10.1 million in 2025. Its 1.36% return on assets was higher than the industry average of 1.24%, according to data from the FDIC.
UCB, which reported a 13.4% Common Equity Tier 1 capital ratio on March 31, has the means to do additional deals, Harton said.
"If we saw the right deal, which would have similar metrics and conditions to Peach State, I'd be more than happy to move forward with that," Harton said.
