CenterState Bank (CSFL) Closes Sunshine and HCBF Buyout

Zacks

Continuing on the journey to become the largest bank in Florida, CenterState Bank Corporation CSFL recently announced the completion of the acquisition of Sunshine Bancorp and HCBF Holding Company, along with their subsidiaries on Jan 1, 2018. The deal is expected to be accretive to CenterState’s earnings in mid-single digits.

The total deal worth $596.2 million has made CenterState one of the largest community banks in Florida on the basis of deposit market share and branch footprint.

Terms of the Deal

Per the agreement with Sunshine Bancorp, shareholders will receive 0.89 shares of CenterState common stock for each share of Sunshine common stock outstanding.

Further, shareholders of HCBF Holding would receive 0.675 shares of CenterState for each share of HCBF common stock outstanding. Shareholders will also receive $1.925 in cash for each share held previously. Moreover, Michael Brown, Sr., Chairman and Chief Executive Officer of HCBF Holding, has been appointed to the board of directors of CentreState.

Also, subsidiary banks of both the acquired holding companies have been merged into CenterState Bank, N.A., immediately post-completion.

Acquisition Streak

Lately, CentreState has been involved in a number of acquisitions in Florida with the aim to strengthen its hold in the region.
In mid-2017, it acquired both Gateway Financial Holdings and Platinum Bank Holding. On a combined basis, the transactions have added $1.5 billion in assets to CenterState and it is anticipated to witness low-double-digit earnings per share accretion in 2018, after the cost savings are fully phased in.

Further, in 2016, CentreState acquired Hometown of Homestead Banking Company and Community Bank of South Florida.

Our Viewpoint

CentreState’s strong balance sheet position supports its involvement in such strategic acquisitions. In addition to helping the company in strengthening its footprint in Florida, the deal will diversify its revenue sources.

Shares of the company have gained 2.6% in a year’s time, slightly underperforming the 2.9% growth of the industry it belongs to.

Stocks to Consider

Carolina Financial Corporation’s CARO Zacks Consensus Estimate for earnings for 2017 was revised 1% upward, in the last 60 days. Also, its share price has increased 20.4% in the past 12 months. The stock carries a Zacks Rank #2 (Buy) You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

First Bancorp FBNC currently carries a Zacks Rank of 2. The stock’s 2017 earnings estimates were revised 3% upward, in the last 60 days. Further, the company’s shares have gained 30.2% in a year’s time.

Hancock Holding Company’s HBHC Zacks Consensus Estimate for earnings for 2017 have remained stable, over the last 60 days. In the past year, its shares have gained 11.9%. Also, it carries a Zacks Rank of 2.

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