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Seacoast Banking Corporation of Florida (NASDAQ: SBCF) (“Seacoast”), the holding company for Seacoast National Bank (“Seacoast Bank”), today announced it has signed a definitive agreement to acquire First Bank of the Palm Beaches (“First Bank”) in a transaction that will expand Seacoast’s presence in the attractive Palm Beach County market.
Pursuant to the terms of the merger agreement, First Bank, headquartered in West Palm Beach, will be merged with and into Seacoast Bank. Organized in 2006, First Bank has deposits of approximately $172 million and loans of $150 million and will increase Seacoast’s deposits in Palm Beach County by 25% to approximately $821 million.
Palm Beach County has the highest median household income in Florida and is one of the fastest growing economies in the state. The Palm Beach County Business Development Board reported its unemployment rate at 3.2% in September. The county’s civilian labor force grew at 1.9% last year. Seven of the county’s neighborhoods are among the fastest growing in the state over the past two years according to a study conducted by Zillow. Also, the county is ranked by Forbes as the #19 in Best Places for Business and Careers in the United States.
Seacoast plans to grow its presence in Palm Beach County by adding First Bank’s two branches to the six it currently operates in the market. Seacoast entered the county in 2003 and then expanded by acquiring Grand Bankshares, Inc. in 2015 and Palm Beach Community Bank in 2017.
“This acquisition brings Seacoast a highly complementary banking institution and strengthens our position in Palm Beach County,” said Dennis S. Hudson III, Seacoast Chairman and CEO. “First Bank builds upon our two previous Palm Beach County acquisitions and subsequent organic growth in Florida’s largest and the nation’s seventh largest MSA. We look forward to welcoming First Bank’s employees and customers to the Seacoast franchise.”
“We set out in 2006 to establish a high quality banking alternative for the Palm Beach County community. We are delighted to partner with Seacoast, a like-minded and highly respected institution with a more than 90-year history of serving Florida,” said Joseph B. Shearouse, III, chairman and CEO of First Bank. “Seacoast is one of the largest Florida-based community banks in the state, and its bankers understand the Palm Beach market. We know our customers will enjoy its impressive array of products and services.”
Following the merger, Shearouse plans to remain with Seacoast as its Palm Beach County Market President.
Under the terms of the merger agreement, First Bank shareholders will receive 0.2000 shares of Seacoast common stock for each share of First Bank common stock. Based on Seacoast’s closing price of $29.53 as of Nov. 18, 2019, the transaction is valued at approximately $32.9 million or $5.91 per share (which includes cashing out the First Bank options). Closing of the acquisition is expected late in the first quarter of 2020 following receipt of approvals from regulatory authorities, the approval of First Bank shareholders and the satisfaction of other customary closing conditions.
Seacoast expects the First Bank acquisition to be more than 1.3% accretive to earnings per share in 2020 excluding one-time transaction costs, 2.0% accretive to earnings per share in 2021, and should have a tangible book value earn-back period of approximately two years using the crossover method. The transaction also is expected to provide an internal rate of return of more than 20%.
Sandler O’Neill & Partners, L.P. served as financial advisor and Alston & Bird LLP served as legal counsel to Seacoast. Keefe, Bruyette & Woods, Inc., a Stifel Company, served as financial advisor and Gunster, Yoakley & Stewart, P.A. served as legal counsel to First Bank.