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Item 1.01
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Entry into a Material Definitive Agreement
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On November 19, 2019, Seacoast Banking Corporation of Florida, a Florida corporation (“Seacoast” or the “Company”), and Seacoast’s wholly-owned subsidiary, Seacoast National Bank, a national banking association (“SNB”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First Bank of the Palm Beaches, a Florida chartered bank (“First Bank”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Seacoast will acquire First Bank pursuant to the merger of First Bank with and into SNB (the “Merger”), with SNB surviving the Merger as the surviving bank.
Subject to the terms and conditions of the Merger Agreement, which has been approved by the Board of Directors of Seacoast and First Bank, upon completion of the Merger, each outstanding share of First Bank common stock will be converted into the right to receive 0.2000 (the “Exchange Ratio”) of a share of Seacoast common stock, subject to the payment of cash in lieu of fractional shares (the “Merger Consideration”).
Prior to the effective time of the Merger, First Bank will take all actions necessary to cause each issued and outstanding First Bank equity award to be terminated in exchange for an amount in cash equal to the product of (i) the aggregate number of shares of First Bank common stock subject to such First Bank equity awards immediately prior to its termination multiplied by (ii) the excess, if any, of (A) the value of the Merger Consideration over (B) the exercise price per share for the applicable First Bank equity award. Each outstanding share of Seacoast common stock will remain outstanding and be unaffected by the Merger.
The Merger Agreement contains customary representations and warranties from both Seacoast and First Bank and each have agreed to customary covenants, including, among others, covenants on the part of First Bank relating to: (1) the conduct of First Bank’s businesses during the interim period between the execution of the Merger Agreement and the completion of the Merger, (2) First Bank’s obligation to convene and hold a meeting of its shareholders to consider and vote upon the approval of the Merger Agreement, and (3) subject to certain exceptions, the recommendation by the Board of Directors of First Bank in favor of the approval by its shareholders of the Merger Agreement and the transactions contemplated thereby (including the Merger). First Bank has also agreed not to, and to cause its directors, officers, employees and representatives and affiliates not to, (1) initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect to any acquisition proposal, (2) engage or participate in any negotiations concerning, or with, any person relating to, any acquisition proposal or (3) subject to certain exceptions, provide any confidential or nonpublic information or data to, or have or participate in any discussions with any person relating to any acquisition proposal.
Completion of the Merger is subject to certain customary conditions, including, among others, (1) adoption of the Merger Agreement by First Bank’s shareholders, (2) required regulatory consents shall have been obtained or made and be in full force and effect and all waiting periods required by law shall have expired and such required regulatory consents shall not be subject to any condition or consequence that would, after the effective time of the Merger, have a material adverse effect on Seacoast or any of its subsidiaries, including First Bank, (3) the absence of any order issued by any governmental authority preventing the consummation of the Merger and the absence of any law or order enacted, entered, promulgated or enforced by any governmental entity that prohibits, restrains or makes illegal the consummation of the Merger, (4) the effectiveness of the registration statement for the Seacoast common stock to be issued in the Merger and (5) the approval for listing of the Seacoast common stock to be issued in the Merger on NASDAQ.
Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including (1) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (2) performance in all material respects by the other party of its obligations under the Merger Agreement, (3) corporate authorization, and (4) since the date of the Merger Agreement, no fact, circumstance or event has occurred or is reasonably likely to have a material adverse effect.
In addition, Seacoast’s obligation to complete the Merger is subject to the satisfaction of certain conditions by First Bank, including (1) the receipt of all consents required as a result of the Merger pursuant to certain contracts, (2) the holders of no more than 5% of First Bank common stock shall have exercised their dissenters’ rights, (3) receipt by Seacoast of an opinion from its counsel to the effect that the Merger will qualify as a reorganization within the meaning of the Internal Revenue Code of 1986, as amended, (4) Seacoast’s receipt of executed claims letters and restrictive covenant agreements by certain officers and/or directors of First Bank, (5) First Bank’s consolidated tangible shareholders’ equity must be not less than $14,104,000 and First Bank’s general allowance for loan and lease losses must not be less than 0.73% of total loans and leases outstanding, (6) the termination and cashing out by First Bank of all outstanding equity awards and the termination by the First Bank board of directors and shareholders of the First Bank stock plans, and (7) the receipt of a non-foreign affidavit.
The Merger Agreement provides certain termination rights for both Seacoast and First Bank and further provides that a termination fee of $1,500,000 will be payable by First Bank upon termination of the Merger Agreement under certain circumstances, including if its board of directors withdraws, qualifies or modifies its recommendation that the First Bank shareholders approve the merger agreement in a manner adverse to Seacoast or has resolved to take such action.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto, and is incorporated into this report by reference thereto. The Merger Agreement has been attached as an exhibit to this report in order to provide investors and shareholders with information regarding its terms. It is not intended to provide any other financial information about Seacoast, First Bank, or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates, are solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties, or covenants or any description thereof as characterizations of the actual state of facts or condition of Seacoast, First Bank or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by Seacoast.
Additional Information
Seacoast and First Bank will file a proxy statement/prospectus and other relevant documents concerning the Merger with the United States Securities and Exchange Commission (the “SEC”). This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain these documents free of charge at the SEC’s Web site (www.sec.gov). In addition, documents filed with the SEC by Seacoast will be available free of charge by contacting Investor Relations at (772) 288-6085.
The directors, executive officers, and certain other members of management and employees of First Bank are participants in the solicitation of proxies in favor of the Merger from the First Bank shareholders.
Important Information for Investors and Shareholders
Seacoast will file with the SEC a registration statement on Form S-4 containing a proxy statement of First Bank and a prospectus of Seacoast, and Seacoast will file other documents with respect to the proposed merger. A definitive proxy statement/prospectus will be mailed to shareholders of First Bank. Investors and shareholders of Seacoast and First Bank are urged to read the entire proxy statement/prospectus and other documents that will be filed with the SEC
carefully and in their entirety when they become available because they will contain important information. Investors and shareholders will be able to obtain free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC by Seacoast through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Seacoast will be available free of charge on Seacoast’s internet website or by contacting Seacoast.
First Bank, its directors and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed merger. Information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Cautionary Notice Regarding Forward-Looking Statements
This current report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is intended to be protected by the safe harbor provided by the same. These statements are subject to numerous risks and uncertainties. These risks and uncertainties include, but are not limited to, the following: failure to obtain the approval of shareholders of First Bank in connection with the merger; the timing to consummate the proposed merger; the risk that a condition to the closing of the proposed merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed merger is not obtained or is obtained subject to conditions that are not anticipated; the parties' ability to achieve the synergies and value creation contemplated by the proposed merger; the parties' ability to promptly and effectively integrate the businesses of Seacoast and First Bank, including unexpected transaction costs, the costs of integrating operations, severance, professional fees and other expenses; the diversion of management time on issues related to the merger; the failure to consummate or any delay in consummating the merger for other reasons; changes in laws or regulations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers and employees by competitors; the difficulties and risks inherent with entering new markets; and changes in general economic conditions. For additional information concerning factors that could cause actual conditions, events or results to materially differ from those described in the forward-looking statements, please refer to the factors set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Seacoast's most recent Form 10-K report, Form 10-Q report and Form 8-K reports, which are available online at www.sec.gov. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Seacoast or First Bank.