United Community Banks, Inc. UCBI has agreed to acquire Aquesta Financial Holdings, Inc., including its wholly owned subsidiary, Aquesta Bank. The deal is expected to close in the fourth quarter of 2021, subject to necessary approvals. Shares of United have gained 2.3% following the deal announcement on May 27, before the markets opened.

The transaction is worth about $131 million, including around $12 million in value for outstanding options and warrants to acquire Aquesta common stock. Per the terms, the deal structure includes an election for Aquesta stockholders to receive their consideration in cash, subject to a limitation that no more than 30% of the total consideration paid will be in cash.

Also, the stock portion of the merger consideration is based upon 0.6386 shares of United common stock being issued in exchange for each share of Aquesta common stock.

The deal is likely to be accretive to United’s earnings per share by nearly 6 cents to 9 cents in 2022. Notably, the benefits will depend upon the mix of United shares and cash elected by Aquesta stockholders and is consistent with United’s stated acquisition criteria pertaining to tangible book value and targeted internal rates of return.

Headquartered in Cornelius, NC, Aquesta’s high-touch customer service is delivered to retail and business customers through a network of nine branches located in Charlotte’s most attractive markets and also in the coastal city of Wilmington, NC. As of Mar 31, 2021, Aquesta had total assets of $752 million, with total loans of $576 million. Additionally, $586 million, or 92%, of its deposit base consists of non-CD core deposits.

“This transaction is consistent with our desire to expand into attractive and fast-growing markets that we know well,” said Lynn Harton, chairman and CEO of United.

Shares of United have rallied 39.5% compared with the industry’s growth 52.5% over the past six months

Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Undertaking Similar Moves

Huntington Bancshares Incorporated HBAN and TCF Financial Corporation TCF entered an all-stock acquisition deal, per which the former will merge with the latter with a total market value of about $22 billion. This has been approved by both the regulators and shareholders.

In order to further strengthen its insurance business, Truist Insurance Holdings, a subsidiary of Truist Financial Corporation TFC, has announced a deal with RedBird Capital Partners to acquire the insurance distribution platform, Constellation Affiliated Partners.

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Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report
 
United Community Banks, Inc. (UCBI) : Free Stock Analysis Report
 
TCF Financial Corporation (TCF) : Free Stock Analysis Report
 
Truist Financial Corporation (TFC) : Free Stock Analysis Report
 
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