Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UNITED COMMUNITY BANKS INC | t67624_8k.htm |
| EX-4.2 - EXHIBIT 4.2 - UNITED COMMUNITY BANKS INC | ex4-2.htm |
| EX-1.3 - EXHIBIT 1.3 - UNITED COMMUNITY BANKS INC | ex1-3.htm |
| EX-1.2 - EXHIBIT 1.2 - UNITED COMMUNITY BANKS INC | ex1-2.htm |
| EX-1.1 - EXHIBIT 1.1 - UNITED COMMUNITY BANKS INC | ex1-1.htm |
| EX-4.1 - EXHIBIT 4.1 - UNITED COMMUNITY BANKS INC | ex4-1.htm |
Exhibit 99.1
For Immediate
Release
April
1, 2010
| For more information: | Rex S. Schuette |
| Chief Financial Officer | |
| 706-781-2265 | |
| rex_schuette@ucbi.com |
UNITED
COMMUNITY BANKS, INC. ANNOUNCES THE
SALE
OF 25 PERCENT OF ITS NON-PERFORMING ASSETS
AND
A $65 MILLION CAPITAL FACILITY
BLAIRSVILLE,
GA, April 1, 2010 – United Community Banks, Inc. (Nasdaq: UCBI, “United”)
announced today that it has entered into a securities purchase agreement with
Fletcher International, Ltd. (“Fletcher”) and its wholly owned subsidiary,
United Community Bank, has entered into an asset purchase and sale agreement
with Fletcher International, Inc. and certain affiliates thereof (the
“Purchasers”).
United
Community Bank (“Bank”) has agreed to sell to the Purchasers $100 million of
certain non-performing commercial and residential mortgage loans and other real
estate owned properties with an aggregate sales price equal to the Bank’s
carrying value. In connection with the asset sale, which is scheduled
to close on or before April 30, 2010, the Bank will receive a $10 million
deposit from Fletcher and the Bank will loan the Purchasers $80 million, in
aggregate, to acquire the purchased assets, with the remainder paid in
cash. The Purchasers will also deposit $17.5 million upon the
purchase of the assets, to pre-fund the estimated three years of interest and
other related carry costs. As part of the asset sale, Fletcher will
receive a $30 million warrant to purchase common stock equivalent junior
preferred stock that is equal to, after exercise, 7,058,824 shares of United’s
common stock at an exercise price of $4.25 per common share assuming the
exercise price was paid in cash.
“This is
a very unique and attractive transaction for United and its shareholders,”
stated Jimmy Tallent, president and chief executive officer of
United. “It allows us to sell $100 million of our more illiquid
non-performing assets in our non-Atlanta markets while avoiding any additional
charge-offs and credit costs. This is particularly attractive due to
the lack of investors in these markets and the difficulty we have experienced in
successfully selling lots, raw land, and other properties. This
transaction helps to significantly reduce our non- performing assets by about
25%, allowing us to achieve our goal of reducing non-performing assets at the
highest economic value to our shareholders while preserving our capital
position.”
Also on
April 1, 2010, United and Fletcher entered into a securities purchase agreement
pursuant to which during the next two years, Fletcher has the right to purchase
up to $65 million of United’s Series C Convertible Preferred Stock (the
“Convertible Preferred Stock”). After shareholder approval, the
Convertible Preferred Stock will bear interest equal to LIBOR + 4 percent per
annum with a cap of 8 percent and is convertible by Fletcher into United’s
common stock at $5.25 per share. If Fletcher has not purchased all of the
Convertible Preferred Stock by May 26, 2011, it must pay United 5 percent
of the commitment amount not purchased by such date, and it must pay United an
additional 5 percent of the commitment amount not purchased by May 26,
2012.
“The
securities facility with Fletcher provides United with access to additional
capital at a cost that we believe is very attractive and, coupled with the asset
sale, will allow us to be more proactive in pursuing market opportunities,”
stated Tallent. “We believe that
United currently maintains a sound capital position and as a result of this
facility, we have enhanced our capital base.”
As part
of the securities transaction, the initial warrant issued to Fletcher in
connection with the asset sale will be increased upon Fletcher purchasing
Convertible Preferred Stock by an amount equal to $1.00 for each $1.00 of
Convertible Preferred Stock purchased in excess of $30 million with a maximum of
an additional $35 million of warrants being granted to purchase common stock
equivalent junior preferred stock. This $35 million warrant, after
exercise, is equal to 5,813,953 shares of United’s common stock at an exercise
price of $6.02 per common share assuming the exercise price was paid in cash.
The warrant has a life of nine years and may only be exercised by way of a
cashless exercise. The net shares to be delivered upon cashless exercise will be
less than what would have been issuable if the warrant had been exercisable for
cash.
“We have
been working with Fletcher on this transaction for some time,” stated
Tallent. “Creating a structure that provides an opportunity for new
capital combined with the sale of non-performing assets at book value that is
both innovative and strategic. We very much appreciate the commitment by
Fletcher and we very much welcome them as shareholders of United.”
“Community
banks are the engines that power local economies, which, in turn, provide jobs,
homes, and security to people around the country,” said Denis J. Kiely, Director
of Fletcher Asset Management, Inc. “With these concurrent investments,
we hope to free capital on United's balance sheet to allow it to
continue and expand its investment in its communities and fulfillment
of its mission.”
The
securities transactions described above are subject to United’s shareholder
approval pursuant to the Listing Requirements of the Nasdaq Global Select
Market, which will be sought at United’s Annual Meeting of shareholders to be
held on May 26, 2010. If shareholder approval is not received,
the Securities Purchase Agreement provides that in no event will Fletcher be
issued in excess of 19.99 percent of United’s outstanding common stock, that the
preferred stock dividend rate would be LIBOR + 8 percent with a cap of 12
percent, and investments by Fletcher may be delayed. Further, the
Securities Purchase Agreement contains a restriction that Fletcher may not own
more that 9.75 percent of United’s outstanding common stock at any
time.
About United Community
Banks, Inc.
Headquartered
in Blairsville, United Community Banks is the third-largest bank holding company
in Georgia. United Community Banks has assets of $8.0 billion and operates 27
community banks with 107 banking offices located throughout north Georgia, the
Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The
company specializes in providing personalized community banking services to
individuals and small to mid-size businesses. United Community Banks also offers
the convenience of 24-hour access through a network of ATMs, telephone and
on-line banking. United Community Banks common stock is listed on the Nasdaq
Global Select Market under the symbol UCBI. Additional information may be found
at the company’s web site at www.ucbi.com.
About Fletcher Asset
Management, Inc.
Founded
in 1991, SEC-Registered Investment Advisor Fletcher Asset Management Inc.,
Fletcher International, Ltd., Fletcher International, Inc. and other affiliates
in the United States and Europe seek consistent investment returns from their
supportive direct investments in responsible companies and in select private
investment funds. More than 50 direct investments have strengthened promising
companies helping to secure more than 50,000 jobs and develop and deliver
important products and services. Additional information is available
at www.fletcher.com.