United Community Banks, Inc. (NASDAQ: UCBI) (“UCBI”) and Three Shores Bancorporation, Inc. (“Three Shores”) announced today a definitive agreement for UCBI to acquire Three Shores, including its wholly-owned subsidiary, Seaside National Bank & Trust (“Seaside”).
Headquartered in Orlando, Florida, Seaside is a premier commercial lender with a strong wealth management platform. Its high-touch customer service is delivered to high net worth individuals and middle-market businesses through a network of 14 branches located in key Florida metro markets. As of December 31, 2019, Seaside reported outstanding loans totaling approximately $1.4 billion, comprised of a diversified group of small business borrowers operating in multiple industries in Florida. Additionally, Seaside operates a wealth management platform with more than $900 million of client assets under advisement.
Three Shores and Seaside were founded in 2006 by Gideon Haymaker, who continues to lead the company today as President and Chief Executive Officer. In Mr. Haymaker’s prior experience, he served as Executive Vice President of Private Client Services for SunTrust Banks for the State of Florida. Overall, he has more than 38 years of executive experience in regional banking. Following completion of the acquisition, Mr. Haymaker will become a key part of United’s team and continue to lead the Florida market.
“This transaction is consistent with our commitment to grow our commercial lending business and to deepen our client offerings,” said Lynn Harton, Chairman and Chief Executive Officer of UCBI. “Seaside adds the ability to supplement our traditional retail branch and commercial model with a “branch lite” C&I focus. Our larger balance sheet and low cost funding brings capital needed to continue to grow Seaside’s business and relationships. Additionally, the financial returns of the transaction are not reliant on high cost savings or on revenue synergies. However, we do believe these opportunities will exist as we will be able to offer expanded products and services through our combined franchise. The business will continue to be run by Seaside’s experienced and proven management team, and our cultural compatibility and shared relationship-based approach makes this a great fit.”
Gideon Haymaker, President and Chief Executive Officer of Seaside, stated, “Since its inception, Seaside has focused on developing a business model with the right products, services and delivery methods that fit our target markets and client base. We believe that we have been successful at that. However, to continue growing and to become more profitable, we needed to access more permanent capital and lower cost funding. Our partnership with the United team provides just that, as well as the opportunity to expand the products and services that both United and Seaside bring to the partnership. I believe that the synergies that exist between our commercial lending businesses will result in tremendous success for both sides.”
The transaction value is estimated to total approximately $180 million, including approximately $25 million being paid to holders of options and follow-on rights to acquire Three Shores common stock. The stock portion of the merger consideration is based upon .3300 shares of UCBI common stock being issued in exchange for each share of Three Shores common stock. The acquisition is expected to be accretive to UCBI’s earnings per share by approximately $0.12 to $0.14 in the first full year of operations and is consistent with UCBI’s stated acquisition criteria pertaining to tangible book value and targeted internal rates of return. The transaction is expected to be completed in the third quarter of 2020 and is subject to customary conditions, including regulatory approval as well as the approval of Three Shores’ shareholders.
“I am excited to work with Gideon as we have developed a relationship over the past few years and have been looking for an opportunity to enter the Florida markets. This is an exceptional opportunity for us, and we look forward to what the future holds together,” added Mr. Harton.
Morgan Stanley & Co. LLC acted as financial advisor to UCBI, and Nelson Mullins Riley & Scarborough LLP served as its legal advisor. Piper Sandler & Co. served as Three Shores’ financial advisor, and Smith Mackinnon, PA served as its legal advisor.
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