Seacoast will pay $53.9 million in stock for the $412 million-asset Sabal Palm Bank, or a 167% premium to the seller’s tangible book value, and $28.4 million in stock for the $188 million-asset Florida Business Bank, or a 133% premium.
The deals are expected to close in the first quarter of 2022. Sabal Palm Bank has three branches, $377 million of deposits and $272 million of loans. Business Bank of Florida has one branch, $166 million of deposits and $136 million of loans.
The selling banks “are two highly successful, local community banking franchises,” Charles Shaffer, Seacoast’s president and CEO, said in the release.
“Both institutions are customer-focused franchises with an outstanding reputation for service excellence and deep customer relationships in their markets,” Shaffer added. “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.”
The deals are expected to be 4% accretive to Seacoast’s 2023 earnings. It should take a little over a year to earn back the projected 0.4% dilution to Seacoast’s tangible book value.
Neil McCurry Jr., Sabal Palm Bancorp’s president and CEO, will become Seacoast’s Sarasota and Manatee County market president.
Seacoast plans to cut 40% of Sabal Palm Bank’s annual noninterest expenses and half of the annual operating costs at Business Bank of Florida.
Seacoast expects to lose $7.7 million in annual interchange income after crossing $10 billion of assets, beginning on July 1, 2023. The company also expects to take an annual $1.5 million his from higher Federal Deposit Insurance Corp. expenses and a lower Federal Reserve dividend. Earnings accretion from the acquisitions should offset 60% of those hits.
Piper Sandler and Alston & Bird advised Seacoast. Hovde Group advised Sabal Palm Bank and Business Bank of Florida. Smith Mackinnon advised Sabal Palm, while Porter Wright Morris & Arthur advised Business Bank of Florida.