Seacoast Banking Corporation of Florida, the holding company for Seacoast Bank, entered into two separate definitive agreements to acquire Sabal Palm Bancorp, parent company of Sabal Palm Bank, and Business Bank of Florida Corp. (BBFC), parent company of Florida Business Bank. Upon the completion of each acquisition, the banks will merge with and into Seacoast Bank.
Sabal Palm Bank is based in Sarasota, FL, and operates three branches across the Sarasota market with deposits of approximately $377 million and loans of $272 million as of June 30. Florida Business Bank is based in Melbourne, FL, and operates one branch in Melbourne with deposits of approximately $166 million and loans of $136 million as of June 30. In aggregate, the two transactions will add approximately $600 million in assets to Seacoast Bank.
“Sabal Palm Bank and Florida Business Bank are two highly successful, local community banking franchises. Both institutions are customer-focused franchises with an outstanding reputation for service excellence and deep customer relationships in their markets. We see great opportunity to complement their strengths with Seacoast’s innovation and breadth of offerings to grow our presence and expand our position in two very attractive Florida markets,” Charles M. Shaffer, president and CEO of Seacoast, said. “The transactions are expected to be accretive to earnings in 2022 with minimal dilution of tangible book value and will add scale in growing and dynamic markets. We look forward to welcoming the employees and customers of Sabal Palm Bank and Florida Business Bank to the Seacoast franchise.”
“Sabal Palm Bank has always been passionate about serving the needs of our community and working side by side with our customers to help them achieve their financial goals. We are delighted to partner with Seacoast, which shares our values and has been serving Florida consumers and businesses for more than 90 years,” Neil D. McCurry Jr., president and CEO of Sabal Palm Bancorp, said. Following the merger, McCurry will remain with Seacoast, serving as Sarasota and Manatee County market president.
“We are delighted to partner with one of Florida’s major and fast-growing regional banks,” Zuheir Sofia, chairman and CEO of BBFC, said. “We share Seacoast’s commitment to providing best in class customer service, local decision-making and building a highly motivated management team. Our customers will be able to take advantage of Seacoast’s convenient statewide network and an impressive array of products and services.”
“Florida Business Bank has a valuable community banking franchise in Brevard County, which is one of the strongest business and real estate markets in Florida,” William R. Norris, president and CEO of Florida Business Bank, said. “Our team’s incredible hard work and focus made us a top-performing bank by any measure. As such, we earned many distinctions, including being ranked in the top 100 U.S. community banks under $3 billion by S&P Global Market. We are pleased to partner with Seacoast, whose seasoned bankers understand the value of being a relationship bank with extraordinary personal service.”
Seacoast expects the transactions to be 4% accretive to earnings per share in 2023, the first full year of combined operations, and expects minimal upfront tangible book value dilution to be earned back within 1.25 years.
Under the terms of the Sabal Palm merger agreement, Sabal Palm shareholders are expected to receive 0.2203 shares of Seacoast common stock for each share of Sabal Palm common stock they own. The exchange ratio for the transaction is fixed, which means that the transaction value will fluctuate as a result of changes in Seacoast’s stock price. Based on Seacoast’s closing price of $31.58 as of Aug. 20, the Sabal Palm transaction, including the exchange of Sabal Palm options, is valued at approximately $53.9 million or $6.96 per share.
Under the terms of the BBFC merger agreement, BBFC shareholders are expected to receive 0.7997 shares of Seacoast common stock for each share of BBFC common stock they own. The exchange ratio for the transaction is also fixed, which means that the transaction values will fluctuate as a result of changes in Seacoast’s stock price. Based on Seacoast’s closing price of $31.58 as of August 20, the BBFC transaction is valued at approximately $28.4 million or $25.25 per share.
Closing of each transaction is expected to occur in Q1/22, following receipt of approvals from regulatory authorities, the approval of the respective entities’ shareholders and the satisfaction of other customary closing conditions.
Piper Sandler served as financial advisor and Alston & Bird served as legal counsel to Seacoast on both transactions. Hovde Group served as financial advisor to Sabal Palm and BBFC. Smith Mackinnon served as legal counsel to Sabal Palm and Porter Wright Morris & Arthur served as legal counsel to BBFC.