The two banks announced the execution of a definitive merger agreement in which United will acquire Progress, and its wholly owned subsidiary, Progress Bank & Trust, in an all-stock transaction with an aggregate value of approximately $271.5 million, or $23.52 per share of Progress common stock, based on United’s closing stock price of $30.55 on May 3, according to a news release.
Progress operates 14 offices in Southeastern markets, including Huntsville, Birmingham, Daphne and Tuscaloosa in Alabama and the Florida Panhandle, the release said.
As of March 31, Progress had total assets of $1.9 billion, total loans of $1.3 billion, and total deposits of $1.7 billion, the release said. In addition to traditional banking products, Progress offers wealth management and private banking through Progress Financial Services, a division of Progress Bank, with approximately $1.2 billion in assets under management.
Led by President and CEO David Nast, Progress has focused on organic growth by hiring and developing skilled commercial and mortgage banking teams in its markets, according to the release, which said the company, during its expansion across Alabama and Florida, has emphasized a strong credit culture.
“We believe Progress and United to be a great cultural fit and are excited to join forces in Alabama and the Florida panhandle,” Lynn Harton, chairman and CEO of United, said in the release. “Progress bankers and their customers will benefit from the expanded products and resources that we are able to bring to the table. Our M&A focus has continued to be on high-growth markets in the Southeast with attractive demographics and strong in-migration. Progress’ footprint will complement our existing markets and be accretive to our franchise value. We have been investing in Birmingham over the past several years and have SBA and Ssenior care teams already in place. I spent several years as a banker in these markets and know well the potential they represent. I am looking forward to bringing Progress into the United team.”
The merger agreement was approved unanimously by the boards of directors of Progress and United, the release said. The merger is expected to be completed in the fourth quarter this year and is subject to customary conditions, including regulatory approval as well as the approval of Progress’s shareholders.
“I would like to thank the dedicated employees of Progress that have elevated our franchise over the past several years to one of the best performing banks in our region. I am proud of the company we have built together and believe that a partnership with United represents an excellent opportunity for us to continue to serve our customers at the highest level,” David Nast, president and CEO of Progress, said in the announcement. “We also greatly value United’s commitment to communities because that has always been a big part of our Progress culture.”
Under the terms of the merger agreement, Progress shareholders will receive 0.77 shares of United common stock for each share of Progress common stock outstanding. The merger is expected to be accretive to United’s earnings per share, excluding transaction costs, by approximately 7 cents per share, or 2.0% in 2023, the release said. The estimated transaction returns are consistent with United’s stated acquisition criteria pertaining to tangible book value and targeted internal rates of return.
Piper Sandler & Co. acted as financial adviser to United, and Nelson Mullins Riley & Scarborough LLP served as United’s legal adviser. Stephens Inc. served as financial adviser to Progress, and Maynard Cooper Gale served as Progress’ legal adviser.
United Community Bank broke ground on new corporate headquarters in downtown Greenville on March 30. The new building at 200 E. Camperdown is expected to be complete in 2023, according to a news release at the time. The company, which has 650 employees in the state, relocated its headquarters to South Carolina in 2021 and has Midlands locations in Columbia and Lexington as well as a loan office on Columbia's Main Street.