Kroll Bond Rating Agency Releases Comment on United Community Banks, Inc.’s Acquisition of Palmetto Bancshares, Inc.

Kroll Bond Rating Agency (KBRA) released a comment entitled, “United Community Banks, Inc.’s acquisition of Palmetto Bancshares, Inc.”, which makes the following points:

• United Community Banks, Inc. (NASDAQ: UCBI) has announced a merger agreement with Palmetto Bancshares, Inc. ($1.1 bn in assets), the parent company of The Palmetto Bank.
• Under the terms of the agreement, The Palmetto Bank will merge into United Community Bank – UCBI’s subsidiary bank.
• Acquisition-related risks are quite manageable in Kroll Bond Rating Agency’s (KBRA) view. This acquisition is in a strong market which UCBI’s senior management knows well. The balance sheet of Palmetto is readily absorbable at 15% of UCBI’s total assets with the opportunity for considerable cost saves. The due diligence process appears thorough.
• The merger strengthens UCBI’s market presence in and around the Greenville, South Carolina markets – an area where UCBI had already planned to expand.
• The cash and stock transaction is valued at approximately $240.5 million and is projected to close in the fourth quarter of 2015.
• The transaction is expected to be immediately accretive to earnings per share and is expected to be double digit accretive in 2017.
• In July of 2013, KBRA assigned a senior unsecured long-term debt rating of BBB- to United Community Banks, Inc. and a short-term rating of K3. The subsidiary, United Community Bank, carries a senior deposit rating of BBB and a short-term rating of K2. The outlook on both ratings is stable.
• As of fourth quarter 2014 data, KBRA’s Subscription Rating Service (SRS) rated both UCBI and United Community Bank B+ on the financial strength rating (FSR) scale and rated both Palmetto Bancshares, Inc. and The Palmetto Bank B.

Please use the following link to view the report: https://www.krollbondratings.com/show_report/2188

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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).