BankUnited to Buy Certus' Small Business Finance Unit - Analyst Blog
BankUnited, Inc. BKU is expanding its small business lending operations. The company announced a deal to acquire Small Business Finance Unit from Greenville, SC-based CertusHoldings, Inc., in an asset purchase agreement.
BankUnited will buy Small Business Finance Unit’s loan portfolio worth $203 million as of Jan 31, 2015, along with almost all the operating assets, and assume certain operating liabilities. The total purchase price will be $233 million, subject to adjustments.
Small Business Finance Unit has consistently ranked among the top 20 Small Business Administration (“SBA”) lenders in the U.S. The unit originates, sells and services small business loans under the SBA’s 7(a) loan program and CDC/504 loan program, along with the loan programs of U.S. Department of Agriculture’s Business & Industry, and Community Facilities.
The deal, expected to close in the second quarter of 2015, is still subject to approvals from regulators and shareholders of CertusHoldings. Notably, upon completion, the transaction will be 2% accretive to BankUnited’s earnings for six months ended Dec 31, 2015 and roughly 3% accretive in 2016.
Additionally, John S. Poelker, Chairman, President and Chief Executive Officer of CertusHoldings, stated, “The Small Business Finance Unit has consistently been a strong performer for our organization and I’m confident our SBF teammates will continue to excel as they make the transition to BankUnited.”
Given BankUnited’s strong capital and balance sheet position, we believe that the deal will aid its top-line growth. Further, the transaction would serve to enhance the company’s market share in small business lending operations.
Currently, BankUnited carries a Zacks Rank #3 (Hold). Some better-ranked banks include Northern Trust Corporation NTRS, Huntington Bancshares Incorporated HBAN and Old Second Bancorp Inc. OSBC. All these stocks hold a Zacks Rank #2 (Buy).
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