First National Bank to merge with UCB
United Community Banks, Inc., and MoneyTree Corporation announced Tuesday a definitive agreement for UCB to acquire MoneyTree and its wholly owned bank subsidiary, First National Bank.
MoneyTree and FNB are headquartered in Lenoir City.
According to a release from UCB, the resulting combination will enhance both UCB's position in key growth markets in East Tennessee and its ability to offer expanded banking products to FNB's customer base.
The transaction has been unanimously approved by the Board of Directors of each company and is expected to close in the second quarter of 2015.
"This transaction enhances our presence in the communities we serve and creates value for the shareholders and customers of both our organizations," Jimmy Tallent, UCB president and chief executive officer, said. "We are excited to have the opportunity to expand our footprint in East Tennessee by joining forces with a strong, well-established community bank, First National Bank.
"FNB's commitment to customer service is consistent with United's, which makes this an ideal partnership," he said. "We entered the East Tennessee market 12 years ago, and we are strongly committed to this region. This merger will allow us to expand into key markets in East Tennessee, including Cleveland, Lenoir City and Knoxville. The combined FNB-United franchise will be well positioned to achieve outstanding growth potential."
Under the terms of the merger agreement, MoneyTree shareholders will receive merger consideration consisting of 80 percent stock and 20 percent cash, with a fixed exchange ratio that is valued at approximately $52 million based on UCB's closing price of $17.65 per share.
"Combining with United Community Bank enables our customers to benefit from enhanced resources and products from their banking organization," David Allen, president and CEO of FNB, said. "United Community Bank has established itself as 'The Bank that SERVICE Built' and that is a model we know well. We have been serving customers in East Tennessee faithfully for 107 years. This partnership further assures us of having the ability to be a leader in meeting the financial services needs of our customers and to meaningfully contribute to our local communities. That is what community banking is all about."
Under the transaction, FNB will merge into UCB's bank subsidiary and operate under its brand. FNB currently operates 10 branches in East Tennessee, and on Dec. 31 had $425 million in assets, $354 million in deposits and $253 million in loans. Upon completion of the transaction, UCB will have $8 billion in total assets.
"We built our reputation and strength over the years by being a leading bank in the community while meeting the needs of our customers," FNB's Chairman Ted L. Wampler Sr. said. "The bank's focus and structure surround each of the communities it serves with employees who are committed to provide friendly personal service. Our board is confident that this strategic combination enhances this commitment and is consistent with our tradition as demonstrated by each director signing an agreement affirming their support."
Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of MoneyTree's shareholders, according to the release from UCB.