United Community Banks in Blairsville, Ga., has agreed to buy Four Oaks Fincorp in North Carolina.
The $10.7 billion-asset United said in a press release Tuesday that it will pay $124 million in cash and stock for the $737 million-asset Four Oaks. The deal, which is expected to close in the fourth quarter, values Four Oaks at 177% of its tangible book value.
Four Oaks has 14 branches, including a dozen around Raleigh, N.C.; it has $513 million in loans and $560 million in deposits.
United said it expects the acquisition to be less than 1% dilutive to its tangible book value per share, including $11.8 in merger-related expenses. The deal should be 2% accretive to United’s fully diluted earnings per share in 2018, excluding one-time costs.
“This transaction is yet another example of our growth strategy into new, fast-growing markets,” Jimmy Tallent, United’s chairman and CEO, said in the release. “Four Oaks provides a strong customer base and an excellent springboard for additional growth in metropolitan Raleigh. It will also greatly assist us in attracting strong, in-market bankers to grow in this new market area.”
United also hopes to take advantage of market disruption from the sale of other North Carolina banks, Tallent said. In recent months, BNC Bancorp and Yadkin Financial have been bought, while Paragon Commercial Bank and Park Sterling have agreed to be sold to out-of-state banks.
United plans to cut about 35% of Four Oaks’ annual noninterest expenses, or roughly $8.4 million.
United was advised by Banks Street Partners and Troutman Sanders. Four Oaks was advised by Sandler O’Neill and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan.