Stonegate Bank’s management expects the combination will increase total assets to approximately $2.1 billion and will rank Stonegate Bank as the 10th largest bank headquartered in Florida.
The value of the total consideration to be received by CBB’s common shareholders will be equal to approximately 140% of the tangible book value of CBB as determined at the month-end prior to the closing date. The consideration will be in common stock of SGBK valued at $26.00 per share. As of June 30, 2014, the transaction is valued at approximately $61.2 million.
CBB, headquartered in Weston, Florida, is a state chartered bank operating eight branches all in Broward County, Florida. As of June 30, 2014, CBB had total assets of $487 million, total loans of $413 million and total deposits of $419 million.
"This acquisition significantly expands our deposit market share in Broward County to approximately 2.0%, resulting in Stonegate having the largest deposit market share of any community bank in Broward County," said Dave Seleski, President and Chief Executive Officer of Stonegate Bank.
"In addition, we believe this merger creates substantial economies of scale and will significantly improve our shareholder returns. Stonegate’s total combined deposits in southeast Florida will now exceed $1 billion. Stonegate’s capital ratios will remain strong and allow the bank to continue to grow organically as well as through future acquisitions."
"We are very excited about becoming a part of the Stonegate banking team. We have been friendly competitors for many years and now we can become a part of their very high performance financial organization. We will also be able to provide additional products and services for our customers. We have a common culture of productivity, excellent customer service and follow-through and I am very excited about this new partnership," added Bruce Keir, President and Chief Executive Officer of Community Bank of Broward.
Stonegate estimates the transaction to be immediately accretive to earnings per share with double-digit accretion in the first full year. Furthermore, it is anticipated that tangible book dilution resulting from the transaction will be modest and recovered in less than 3 years. This transaction will mark Stonegate’s seventh acquisition since 2009.
The merger has been approved by the Board of Directors of Stonegate Bank and CBB. In addition to certain customary closing conditions, approval by the shareholders of Community Bank of Broward and Stonegate Bank as well as the as the applicable bank regulatory agencies will be required prior to completing the transaction. The closing is expected to take place late in the fourth quarter of 2014.
Sandler O’Neill+ Partners served as financial adviser to Stonegate Bank. Gunster, Yoakley & Stewart, P.A.served as legal counsel to Stonegate Bank. Hovde Group, LLC served as financial adviser to Community Bank of Broward and rendered a fairness opinion in connection with the transaction. Smith Mackinnon, P.A. served as legal counsel to Community Bank of Broward.
