United Community Banks in Blairsville, Ga., has agreed to buy Palmetto Bancshares in Greenville, S.C.
The $7.7 billion-asset United Community said in a press release Wednesday that it will pay $240.5 million in cash and stock for the $1.2 billion-asset Palmetto in a deal that is expected to close in the fourth quarter. United Community said that 70% of the consideration will involve stock.
United Community said that it expects the acquisition to be immediately accretive to its earnings per share, with mid- to high-single-digit accretion next year and double-digit accretion in 2017. Any estimated tangible book value dilution is expected to be earned back within five years, including merger-related costs.
"We are growing our presence in southeastern metro markets, including and particularly Greenville and the upstate South Carolina area," Jimmy Tallent, United Community's chairman and chief executive, said in the release. "Joining forces with Palmetto will greatly enhance our presence in these markets, creating value for shareholders and customers of both organizations."
Sandler O'Neill and Nelson Mullins Riley & Scarborough advised Palmetto. Morgan Stanley and Troutman Sanders advised United Community.
United Community has finally returned to M&A after a long hiatus, agreeing in January to buy MoneyTree Corp., the parent of the $425 million-asset First National Bank in Lenior City, Tenn., for $52 million.
Separately, United Community announced that its first-quarter earnings rose 18% from a year earlier, to $17.7 million, largely because of increased revenue, including the sale of U.S. Small Business Administration loans.
Palmetto reported Wednesday that its earnings rose 35% from a year earlier, to $2.7 million, largely because of lower expenses and an increase in mortgage-banking income.