United in Ga. made fast Progress with Ala. bank deal

The leaders of United Community Banks in Blairsville, Ga., and Progress Financial in Huntsville, Ala., quickly bonded as they discussed what would become United’s agreement to buy Progress. 

The $24 billion-asset United agreed in May to buy the $1.9 billion-asset Progress for $271.5 million in stock. 

Progress, however, has United on a list of potential “upstream partners” well before David Nast, it’s president and CEO, first met with Lynn Harton, United’s chairman and CEO, last September, according to a regulatory filing tied to the merger. 

While the executives’ first meeting was informal, they “quickly developed a strong relationship and determined the two banks would be able to serve clients better and provide shareholders an opportunity for a good return” if the merged, the filing said. 

The banks have similar business lines and each saw a strategic geographic fit because United had yet to enter Alabama or the Florida Panhandle. 

The companies signed a nondisclosure agreement on Feb. 4, and Progress began to send United due diligence information four days later. 

United sent its initial nonbinding letter of intent on March 9. The initial draft of the merger agreement was sent to Progress on April 1. The filing gave no details on the financials of either document.

The boards for each company approved the merger on May 3. The deal, which was announced the following day and is expected to close in the fourth quarter, priced Progress at 165% of its tangible book value. 

“Progress bankers and their customers will benefit from the expanded products and resources that we are able to bring to the table,” Harton said in a press release announcing the deal. 

"Our M&A focus has continued to be on high-growth markets in the Southeast with attractive demographics and strong in-migration,” Harton added. “Progress’ footprint will complement our existing markets and be accretive to our franchise value.”  

The deal should be 2% accretive to United’s 2023 earnings per share, excluding merger-related costs. The company expects to incur $25.4 million of merger-related expenses. 

United plans to cut a quarter of Progress' annual noninterest expenses, or roughly $13.5 million.

Nast, who will become United's state president for Alabama and the Florida Panhandle, will receive a $443,000 annual salary and is eligible for a bonus that could be as high as $177,200. 

Nash is also set to receive a lump sum of nearly $2.9 million as part of the change of control, along with a $150,000 cash retention award.