In a bid to augment its deposit market share in Broward County, Stonegate Bank (SGBK) has inked a deal to take over the entire operations of Weston, FL-based Community Bank of Broward (CBB) for around $61.2 million. By acquiring its local competitor, Stonegate Bank will add around $2.1 billion to total assets, which will likely be accretive for its shareholders going forward. Again, since CBB had been struggling with regulatory issues, this deal comes as a big win for its shareholders who are likely to receive huge premium.
Stonegate, the Fort Lauderdale, FL-based Southeast bank will pay common share valued at $26 per share, and as per the deal it will shell out 140% of CBB’s tangible book value as of Jun 30, 2014.
This acquisition will raise the deposit market share of Stonegate Bank in Broward County to around 2%, making it the largest deposit market share-holding community bank in the region. Additionally, this merger is likely to generate strong economies of scale for the company. Given its strong capital position, Stonegate is likely to continue expanding both organically as well as through acquisitions.
Notably, this is the second acquisition by the bank in 2014. In January, Stonegate acquired Florida Shores Bancorp and its two subsidiary banks, Florida Shores Bank, Southeast and Florida Shores Bank, Southwest, with total assets amounting to $1.7 billion.
The board of directors of both banks have already approved the deal. However, the transaction, expected to close late in fourth-quarter 2014, is subject to certain customary approvals, including that of shareholders.
Currently, Stonegate Bank carries a Zacks Rank #3 (Hold). Some better-ranked South east banks include Bank of the Ozarks, Inc. (OZRK), Farmers Capital Bank Corporation (FFKT) and First Security Group, Inc. (FSGI). All these banks sport a Zacks Rank #1 (Strong Buy).
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