Rising interest rates led Seacoast Banking Corp. of Florida in Stuart to reduce its offer for Drummond Banking Co. in Chiefland, Fla., by more than 10%.
The $10.9 billion-asset Seacoast agreed in early May to buy the $985 million-asset Drummond for $173.2 million in stock.
Seacoast and two unnamed banks submitted letters of interest.
After Seacoast lowered its offer, it sent the preliminary draft of the merger agreement to Drummond on April 12.
The deal, which is expected to close early in the fourth quarter, priced Drummond at 192% of its tangible book value.
Drummond “has an outstanding reputation for exceptional service and strong financial performance, with a deep commitment to the communities it serves for the last 32 years,” Charles Shaffer, Seacoast’s chairman and CEO, said in the press release announcing the deal.
“We see great opportunity in complementing its strengths with Seacoast’s innovation and breadth of offerings to grow our presence and expand our position in the state,” Shaffer added.
Luther Drummond, Drummond’s chairman and president, and Gray Drummond, the bank’s CEO, will become market executives at Seacoast. Scott Guthrie, president of Drummond Bank, will become a market president.
Luther Drummond, Gray Drummond and Guthrie will each receive a base salary of $331,000, the filing said. Each executive agreed to noncompete and non-solicitation agreements that will end three years after their employment ends.
Gray Drummond will receive a lump-sum payment of about $1.7 million within 30 days of the deal’s closing, along with $81,000 each quarter for the first three years of employment.
Guthrie is set to receive $520,000 after the deal’s closing, along with $55,500 a quarter for the next three years. He will also receive a bonus of at least $150,000 for 2023.