to acquire local Integra branches
According to a joint announcement by United Community Bank (UCB)
and Integra, the branches of Integra in Ripley County will be
purchased by UCB. The three branches are located in Versailles,
Milan, and Osgood. The announcement also noted that UCB has agreed
to acquire a group of commercial and residential mortgage loans
UCB will assume approximately $54.4 million of deposit liabilities
related to the three branches, as well as $38.6 million of branch
loans and $12.3 million of additional commercial and residential
mortgage loans selected by UCB that were originated in other Integra
We are excited about this opportunity to expand our banking
operations into neighboring Ripley County, noted President
and Chief Executive Officer of United Community Bank, William
Customers of the branches should know that we are working
diligently with Integra so that the transition will be seamless
to them. We are also pleased that, following initial transaction
expenses, this transaction is expected to be immediately accretive
to earnings per share for United Community Bancorps shareholders
once the transaction closes, Ritzmann commented.
UCB will now have nine Indiana branches - four in Lawrenceburg;
one each in Aurora, St. Leon, Osgood, Milan, and Versailles.
United Community Bank will pay a 4.50% deposit premium for the
deposit liabilities it assumes, with the exception of municipal
deposits that are issued after the date of the agreement, which
will be acquired at par, while the loans will be acquired at their
outstanding principal balance. UCB will not assume any brokered
deposits or Keogh accounts in the transaction.
According to a press release, the three banking office premises
will be sold at their fair market value and all other fixed assets
will be sold at their book values.
Both Integra and UCB expect that the transaction will have a minimal
impact on the liquidity of either company, as it has been designed
to be liquidity neutral, meaning that minimal cash is expected
to exchange hands. The transactions are subject to customary conditions,
including regulatory approval.
Both parties expect the branch purchase transaction to be complete
in the first half of this year.
We are pleased to work with the team at United Community
Bank to complete this transaction, noted Michael J. Alley,
chairman and chief executive officer of Integra. Our Integra
associates in Milan, Osgood, and Versailles have done a great
job serving their customers and I am confident that this will
Alley continued, This divestiture enhances our capital and
is part of a multi-step strategy we are executing that will improve
our capital and liquidity positions, reduce our credit risk and
accelerate our return to profitability. We expect to execute additional
branch sales in 2010, as well as sales of both non-performing
and performing loans. Based upon letters of intent we have received
from other institutions who have performed or are currently performing
due diligence, we expect to announce additional agreements for
sales in the next 90 days that will provide additional capital
and narrow our operating footprint.