HUNTSVILLE — Progress Bank President/CEO David Nast said he wasn’t looking to make a deal, but he and the bank’s stakeholders knew the day would come.
And, in early May, Progress executives announced a merger with United Community Bank. United Community will acquire Progress Financial Corp. and its wholly owned subsidiary, Progress Bank & Trust, in an all-stock transaction with an aggregate value of approximately $271.5 million, or $23.52 per share of Progress common stock.
Nast and four partners opened the first two locations of Progress Bank, right in the middle of the financial crisis of 2007-2008.
“Progress Bank is not just my success story but a success story for a lot of people and for the city of Huntsville,” Nast said. “Yes, it’s an emotional experience in some ways but in other ways it is very happy occasion because the partnership with United Community Bank is going to allow us to grow, to serve our clients in bigger and better ways.”
Nast said the the bank was not actively looking to make a deal, but Huntsville is a highly desirable market and there have been several knocks on the door and others that were coming at them aggressively.
He believes everyone involved with Progress Bank has felt the day would come when they would need to think long and hard about selling the company to ensure the protection of the shareholders.
“I have always looked at things strategically and I have always made lists – two of them are lists of options and the third is a checklist,” Nast said.
He said list number one consisted of banks Progress may be interested in acquiring. List two was of banks they admired and would be proud to join.
Every box on his third checklist had to be checked off to sell the bank, he said. That checklist consisted of ensuring opportunities for employees, very little geographic overlap, common lines of business, a similar customer service-oriented culture, and experience with mergers and the integration process to ease the transition for customers.
“And of course, there is the financial piece, being purchased at a fair price by a public company so shareholders could sell their shares if they wanted to,” Nast said. “Throughout talks, we kept conversations going with banks that checked off every box on the third list, but eventually the other two lists had dwindled.
“UCB literally checked every one of those boxes. I think we found the right partner in United Community Bank.”
Nast said although they made the announcement in early May, they signed the merger agreement several months ago. He is staying on as president and CEO for the next three years, running the Alabama and Florida Panhandle locations.
“I am happy with what I am doing and pleased they asked me to stay,” Nast said. “That will take me until I am 65 and that has always been my timeframe for retirement.”
He also said the customer transition will happen gradually over time.
“There is a period of time in which you have to have shareholder approval and all the customary regulatory approvals for the legal merger to occur,” Nast said. “That date is scheduled for Oct. 1 and the operations merger will take place around the second week of November this year.
“But even prior to October, a lot of work is being done in anticipation of that date.”
All 14 locations will stay open with little more than a sign change in terms of customer experience. Since UCB is open to growing in specific markets, Nast said there are pockets of opportunities where it makes sense to have offices later.
“We believe Progress and United to be a great cultural fit and are excited to join forces in Alabama and the Florida Panhandle,” said Lynn Harton, chairman and CEO for UCB. “Progress bankers and their customers will benefit from the expanded products and resources that we are able to bring to the table.
“Our M&A focus has continued to be on high-growth markets in the Southeast with attractive demographics and strong in-migration. Progress’ footprint will complement our existing markets and be accretive to our franchise value.
“I spent several years as a banker in these markets and know well the potential they represent. I am looking forward to bringing Progress into the United team.”
Nast thanked Progress employees for being instrumental in elevating the franchise over the past several years to one of the best performing banks in the southeastern region. Progress Bank is the 6th largest bank headquartered in Alabama with total assets of $1.9 billion, total loans of $1.3 billion and total deposits of $1.7 billion.
“I am proud of the company we have built together and believe that a partnership with United represents an excellent opportunity for us to continue to serve our customers at the highest level,” said Nast. “We also greatly value United’s commitment to communities because that has always been a big part of our Progress culture.”
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