CenterState Bank signed a definitive merger agreement to acquire National Commerce Corporation in an all-stock transaction valued at approximately $850.4 million.

As of September 30, 2018 and excluding purchase accounting, the combined company has pro forma total assets of $16.4 billion, gross loans of $11.5 billion, deposits of $12.8 billion and a market capitalization of approximately $3.2 billion. Over 75% of the pro forma deposit base will be in Florida.

Upon completion of the merger, Richard Murray, IV, chairman and CEO of National Commerce, will join CenterState as CEO of the company’s wholly-owned subsidiary, CenterState Bank, and William E. Matthews, V, president and CFO of National Commerce, will join CenterState as CFO of both the bank and the holding company.

“We have enjoyed a 19 year business relationship with Richard, Will and other members of the National Commerce team that confirms our cultural alignment,” said John Corbett, president and CEO of CenterState. “This partnership not only strengthens our management team, but it also deepens our franchise in our core markets of Orlando, Tampa, Jacksonville, and Atlanta. We are also excited to welcome a seasoned team of Alabamabankers with a proven record of success.”

Subject to the terms of the merger agreement, National Commerce stockholders will receive 1.65 shares of CSFL common stock for each outstanding share of National Commerce common stock. Each outstanding option to purchase shares of National Commerce common stock will be assumed by CenterState and become an option to purchase shares of CenterState common stock, with the exercise price and number of shares underlying the option adjusted to reflect the exchange ratio of 1.65. Based on CSFL’s stock price of $24.25 as of November 23, 2018, this equates to a per-share value of $40.01. Additionally, three National Commerce directors will join both the company board and the CenterState Bank board, and one additional director will join the CenterState Bank board.

The transaction is expected to result in mid-single-digit EPS accretion on a fully phased in basis and limited tangible book value dilution, expected to be earned back in approximately two years.

The merger agreement has been unanimously approved by both boards of directors, with completion of the merger subject to customary conditions and receipt of stockholder and regulatory approval. The transaction is expected to close in the second quarter of 2019.

Raymond James & Associates served as financial advisor and Nelson Mullins Riley and Scarborough as legal counsel to CenterState in the transaction. Keefe, Bruyette & Woods served as financial advisor and Maynard Cooper & Gale as legal counsel to National Commerce.

CenterState operates as one of the largest community bank franchises headquartered in the state of Florida. With over $12 billion in assets, the bank provides traditional retail, commercial, mortgage, wealth management and SBA services throughout Florida, Georgia and Alabama.