Seacoast To Acquire GulfShore Bank

Seacoast To Acquire GulfShore Bank
04.11.2016 01:15 pm

Seacoast To Acquire GulfShore Bank

M&A Deals

Seacoast Banking Corporation of Florida ("Seacoast") (NASDAQ: SBCF), the holding company for Seacoast National Bank ("Seacoast Bank"), announced today that it has signed a definitive agreement to acquire GulfShore Bancshares, Inc. ("GulfShore"), the parent company of GulfShore Bank. Upon completion of the merger, Seacoast expects that GulfShore Bank will be merged with and into Seacoast Bank.

The acquisition of GulfShore Bank, a full-service community bank serving the Tampa area since 2007, will add approximately $332 million in assets, $279 million in deposits and $253 million in loans, bringing Seacoast's total assets to approximately $4.8 billion. GulfShore, which operates three branches – two in Tampa and one in St. Petersburg – has built a strong core deposit franchise, with 55% of total deposits in transaction accounts, and has rapidly grown its high quality, diverse loan portfolio.

Dennis S. Hudson, Seacoast's chairman and CEO, said, "Our acquisition of GulfShore, following the announcement last week of our exceptional third quarter results, shows the power of Seacoast's balanced growth strategy. GulfShore is an accretive acquisition and a low-risk alternative to de novo expansion into Tampa, an attractive market that is adjacent to Orlando, where our acquisitions of Floridian Financial Corporation and the BMO Harris Orlando banking franchise earlier this year made Seacoast the largest Florida-based bank in this rapidly growing MSA."

"Seacoast has a record of smoothly integrating the banks we've acquired and then growing their households and services through digitally enabled marketing. We are delighted to welcome GulfShore's customers and its employees into the Seacoast family, and we look forward to introducing Tampa's businesses and households to our broad range of convenient and mobile-accessible products and services," Hudson added.

"Our clients and shareholders will benefit from our combination with Seacoast, a respected, strongly performing, 90-year-old Floridainstitution that is committed to serving its clients and communities," said Joe Caballero, GulfShore's President and CEO. "My colleagues look forward to joining Seacoast, and partnering to serve our clients."

Hudson noted that, upon completion of the merger, Mr. Caballero will be joining Seacoast as Tampa Market Executive and Ed O'Carroll, GulfShore's Executive Vice President and Chief Operating Officer, will be joining Seacoast as a Commercial Banking Manager. Messrs. Caballero and O'Carroll both have over 25 years of experience in banking and middle market lending and strong, long-standing ties to the Tampa market. "Joe's and Ed's impressive careers in community banking and deep Tampa relationships make them excellent partners for our organization," said Hudson.

Under the terms of the definitive agreement, GulfShore common shareholders will receive a combination of 0.4807 shares of Seacoast common stock and $1.47 in cash for each share they own, representing a consideration mix of 85% Seacoast common shares and 15% cash (based on Seacoast's ten-day average closing price of $17.33 per share as of November 2, 2016). This values GulfShore's shares at $9.80 per share, for a total transaction value of approximately $54.8 million. The transaction price represents a 1.46x multiple to GulfShore's tangible book value per share as of September 30, 2016.

Seacoast expects the GulfShore acquisition to be accretive to earnings per share excluding one-time transaction costs and have a tangible book value earnback period of less than 3.5 years using the crossover method.  The transaction is also expected to provide an IRR of nearly 20%.

Directors of both Seacoast and GulfShore approved the acquisition. The transaction is expected to close in the first quarter of 2017, subject to approval by GulfShore's shareholders, receipt of regulatory approvals and other customary closing conditions.

The Tampa metropolitan region, which includes St. Petersburg, Clearwater and Tampa itself, ranks among the fastest-growing markets in the state and country. The metropolitan area's population grew 7.6% compared to 4.4% nationally from 2010 to 2016, and is projected to grow 5.6% from 2016 to 2021 compared to 3.7% nationally.

Tampa job growth also continues to be strong, adding nearly 41,000 jobs in 2015 and ranking first in job growth in Florida. Tampa'sAugust jobless rate was 4.6 percent, according to the U.S. Bureau of Labor Statistics.

Seacoast is being advised by FBR Capital Markets & Co. as financial advisor and Cadwalader, Wickersham & Taft LLP as legal counsel. GulfShore is being advised by Sandler O'Neill + Partners, L.P. as financial advisor and Foley & Lardner LLP as legal counsel.

Investor Conference Call

Seacoast will host a conference call on Friday, November 4, 2016 at 11:00 a.m. Eastern Time to discuss the merger. Investors may call in (toll-free) by dialing (800) 697-5978, passcode: 8938 953#. Alternatively, individuals may listen to the live webcast of the conference call by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon of  November 4th an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast will be available for one year.

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