STUART, Fla., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida (NASDAQ:SBCF) (“Seacoast”), the holding company for Seacoast National Bank (“Seacoast Bank”), today announced it has signed a definitive agreement to acquire Fourth Street Banking Co. ("Fourth Street"), the holding company for Freedom Bank of St. Petersburg. The transaction will be Seacoast's third in the last three years in the Tampa-St. Petersburg metropolitan statistical area ("MSA"), the second largest and one of the fastest growing MSAs in Florida.
Pursuant to the terms of the merger agreement, Freedom Bank will be merged with and into Seacoast Bank. Organized in 2005, Freedom Bank has deposits of approximately $276 million and loans of $249 million and the merger will increase Seacoast’s deposits in the Tampa-St. Petersburg MSA by 87% to approximately $679 million. Seacoast plans to add Freedom Bank’s two branches to the four it currently operates in the market. Seacoast entered the Tampa-St. Petersburg MSA with the acquisition of GulfShore Bank and NorthStar Bank in 2017.
The Tampa-St. Petersburg MSA’s economy continues its expansion, outpacing most of the U.S. Its unemployment rate at 2.7% per Florida Department of Economic Opportunity is lower than the state and national average. It also added 30,800 jobs in November, the second highest total among all MSAs in the state. The same source showed the region leading the state for job demand with 59,256 openings and for STEM jobs with 20,134 openings. “Seacoast has found a great opportunity to partner with Freedom Bank, strengthening our position in the attractive Tampa-St. Petersburg market,” said Dennis S. Hudson III, Seacoast's Chairman and CEO. “This is an exceptional addition to our two previous acquisitions in the state’s second largest MSA. We look forward to welcoming Freedom Bank’s employees and customers to Seacoast Bank.”
“In creating Freedom Bank in 2005, we sought to fill a need in the market for local bankers who knew their customers by name and could make decisions based on local market conditions. We are delighted to partner with Seacoast, who has been serving Florida consumers and businesses for more than 90 years with a very similar philosophy,” said Cathy P. Swanson, CEO of Freedom Bank. “We know our customers will enjoy its convenient state-wide network and impressive array of products and services.”
Following the merger, Swanson plans to remain with Seacoast as its Market President for Pinellas County.
Under the terms of the merger agreement, Fourth Street shareholders will receive 0.1275 shares of Seacoast common stock for each share of Fourth Street common stock. Based on Seacoast’s closing price of $29.39 as of January 22, 2020, the transaction is valued at approximately $63.6 million or $3.75 per share (which includes cashing out the Fourth Street options). Closing of the acquisition is expected late in the second quarter of 2020 following receipt of approvals from regulatory authorities, the approval of Fourth Street shareholders and the satisfaction of other customary closing conditions.
Seacoast expects the Fourth Street acquisition to be more than 1.5% accretive to earnings per share in 2020 excluding one-time transaction costs, 3.3% accretive to earnings per share in 2021, and should have a tangible book value earn-back period of approximately 1.5 years using the crossover method. The transaction also is expected to provide an internal rate of return of more than 20%.
Piper Sandler served as financial advisor and Alston & Bird LLP served as legal counsel to Seacoast. Hovde Group, LLC served as financial advisor and Smith Mackinnon, PA served as legal counsel to Fourth Street.
About Seacoast Banking Corporation of Florida (NASDAQ: SBCF)
Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $7.1 billion in assets and $5.6 billion in deposits as of December 31, 2019. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 48 traditional branches of its locally-branded, wholly-owned subsidiary bank, Seacoast Bank. Offices stretch from Fort Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties. More information about the Company is available at www.SeacoastBanking.com.
