United Community Bank and Aquesta Financial Holdings entered into a definitive agreement for United to acquire Aquesta, including its wholly-owned subsidiary, Aquesta Bank.
Aquesta is headquartered in Cornelius, NC, a northern suburb of Charlotte, NC, situated on Lake Norman. Jim Engel, who founded Aquesta Bank in 2006, leads the company’s management team as president and CEO. The bank has a network of nine branches located in Charlotte, NC, and the coastal city of Wilmington, NC. Aquesta also has loan production offices in Raleigh, NC; Greenville, SC; and Charleston, SC. As of March 31, 2021, Aquesta reported 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,” Lynn Harton, chairman and CEO of United Community Banks, said. “We have been investing in Charlotte over the past several years and have commercial banking and mortgage teams already in place. Aquesta is an exciting opportunity for us to increase our presence and accelerate our growth with a high-quality company that shares our values of customer service, employee engagement and community development.”
“From the beginning, we have focused on developing a business model with a focus on relationship banking in Charlotte and other key markets in the Carolinas, which are some of the most attractive and fastest growing markets in the Southeast and the country,” Engel said. “We believe that we have been successful at that. However, to continue growing and becoming more profitable, we needed a partner who can provide us the opportunity to better serve our customers with a larger balance sheet and expanded products and services to offer. Our partnership with the United team provides just that, and I believe the synergies that exist between our companies will result in tremendous success for both sides.”
The transaction is valued at approximately $131 million, including approximately $12 million in value for outstanding options and warrants to acquire Aquesta common stock. The transaction 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 by United will be in cash. 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 acquisition is expected to be accretive to United’s earnings per share by approximately $0.06 to $0.09 in 2022, depending 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. The transaction is expected to be completed in Q4/21 and is subject to customary conditions, including regulatory approval as well as the approval of Aquesta’s stockholders.
Hovde Group acted as financial advisor to United and Nelson Mullins Riley & Scarborough served as United’s legal advisor. Piper Sandler served as Aquesta’s financial advisor and Wyrick Robbins Yates & Ponton served as Aquesta’s legal advisor.
