State Bank Financial, the holding company for State Bank and Trust, and AloStar Bank of Commerce signed an agreement for State Bank to acquire AloStar in an all cash transaction with a purchase price of one times AloStar’s adjusted tangible book value as of the last day of the month immediately before closing, currently estimated to be $196 million.

At March 31, 2017, AloStar had total assets of approximately $944 million, total loans of approximately $763 million, total deposits of approximately $715 million, and total shareholders’ equity of approximately $193 million. AloStar, founded in 2011 through the FDIC-assisted acquisition of Birmingham, AL-based Nexity Bank, is headquartered in Birmingham and has a commercial office in Atlanta that houses executive management and the lender finance and asset-based lending team.

The transaction is expected to be significantly accretive to 2018 and 2019 earnings per share and marginally dilutive to tangible book value per share with an earn-back period of less than one and a half years.

“Andy McGhee leads a talented team of bankers at AloStar, and we are very pleased they will be joining the State Bank team,” said State Bank CEO Tom Wiley. “This merger adds a complementary lender finance line of business and scalable asset-based lending platform, which will further diversify our loan portfolio. In addition, the all cash consideration provides meaningful earnings accretion while efficiently leveraging our excess capital.”

McGhee, president and CEO of AloStar, added, “We are excited to be partnering with State Bank. Joining an organization with the capital and strength of State Bank will provide additional scale to our lending platform and enable us to expand the products and services available to our customers.”

The agreement has been unanimously approved by the boards of directors of both companies and AloStar’s shareholders and is anticipated to close in the fourth quarter of 2017.

Barclays Capital served as financial advisor, and Nelson Mullins Riley & Scarborough served as legal counsel to State Bank. Keefe, Bruyette & Woods served as financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to AloStar.