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.
Investor Conference Call Information
Seacoast will host a conference call on
January 24, 2020 at 10:00 a.m. (Eastern Time) to discuss the
acquisition. Investors may call in (toll-free) by dialing (888)
517-2513 (passcode: 7556 513; host: Dennis S. Hudson). Slides will
be used during the conference call and may be accessed at
Seacoast's website at www.SeacoastBanking.com by selecting
"Presentations" under the heading "News/Events." A replay of the
call will be available for one month, beginning late afternoon of
January 24, 2020 by dialing (888) 843-7419 (domestic) and
using passcode: 7556 513#.
Alternatively, individuals may listen to the
live webcast of the presentation by visiting Seacoast's website at
www.SeacoastBanking.com. The link is located in the subsection
"Presentations" under the heading "Webcasts." Beginning the
afternoon of January 24, 2020, 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.
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.
Important Information for Investors and
Shareholders
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, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction. Seacoast will file
with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-4 containing a proxy statement of
Fourth Street and a prospectus of Seacoast, and Seacoast will file
other documents with the SEC with respect to the proposed merger. A
definitive proxy statement/prospectus will be mailed to
shareholders of Fourth Street. Investors and security holders of
Seacoast and Fourth Street 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
security holders 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 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.
Seacoast, Fourth Street, their respective
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 transaction. Information
about the directors and executive officers of Seacoast is set forth
in its proxy statement for its 2019 annual meeting of shareholders,
which was filed with the SEC on April 5, 2019 and its Current
Reports on Form 8-K. Other 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 press release contains "forward-looking
statements" within the meaning, and protections, of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including, without limitation, statements
about future financial and operating results, cost savings,
enhanced revenues, economic and seasonal conditions in our markets,
and improvements to reported earnings that may be realized from
cost controls, tax law changes, new initiatives and for integration
of banks that we have acquired, or expect to acquire, including
Fourth Street, as well as statements with respect to Seacoast's
objectives, strategic plans, including Vision 2020, expectations
and intentions and other statements that are not historical facts.
Actual results may differ from those set forth in the
forward-looking statements.
Forward-looking statements include statements
with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates and intentions
about future performance and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control,
and which may cause the actual results, performance or achievements
of Seacoast to be materially different from future results,
performance or achievements expressed or implied by such
forward-looking statements. You should not expect us to update any
forward-looking statements.
All statements other than statements of
historical fact could be forward-looking statements. You can
identify these forward-looking statements through our use of words
such as "may", "will", "anticipate", "assume", "should", "support",
"indicate", "would", "believe", "contemplate", "expect",
"estimate", "continue", "further", "plan", "point to", "project",
"could", "intend", "target" or other similar words and expressions
of the future. These forward-looking statements may not be realized
due to a variety of factors, including, without limitation: the
effects of future economic and market conditions, including
seasonality; governmental monetary and fiscal policies, including
interest rate policies of the Board of Governors of the Federal
Reserve, as well as legislative, tax and regulatory changes;
changes in accounting policies, rules and practices; the risks of
changes in interest rates on the level and composition of deposits,
loan demand, liquidity and the values of loan collateral,
securities, and interest sensitive assets and liabilities; interest
rate risks, sensitivities and the shape of the yield curve;
uncertainty related to the impact of LIBOR calculations on
securities and loans; changes in borrower credit risks and payment
behaviors; changes in the availability and cost of credit and
capital in the financial markets; changes in the prices, values and
sales volumes of residential and commercial real estate; our
ability to comply with any regulatory requirements; the effects of
problems encountered by other financial institutions that adversely
affect us or the banking industry; our concentration in commercial
real estate loans; the failure of assumptions and estimates, as
well as differences in, and changes to, economic, market and credit
conditions; the impact on the valuation of our investments due to
market volatility or counterparty payment risk; statutory and
regulatory dividend restrictions; increases in regulatory capital
requirements for banking organizations generally; the risks of
mergers, acquisitions and divestitures, including our ability to
continue to identify acquisition targets and successfully acquire
desirable financial institutions; changes in technology or products
that may be more difficult, costly, or less effective than
anticipated; our ability to identify and address increased
cybersecurity risks; inability of our risk management framework to
manage risks associated with our business; dependence on key
suppliers or vendors to obtain equipment or services for our
business on acceptable terms; reduction in or the termination of
our ability to use the mobile-based platform that is critical to
our business growth strategy; the effects of war or other
conflicts, acts of terrorism, natural disasters or other
catastrophic events that may affect general economic conditions;
unexpected outcomes of, and the costs associated with, existing or
new litigation involving us; our ability to maintain adequate
internal controls over financial reporting; potential claims,
damages, penalties, fines and reputational damage resulting from
pending or future litigation, regulatory proceedings and
enforcement actions; the risks that our deferred tax assets could
be reduced if estimates of future taxable income from our
operations and tax planning strategies are less than currently
estimated and sales of our capital stock could trigger a reduction
in the amount of net operating loss carryforwards that we may be
able to utilize for income tax purposes; the effects of competition
from other commercial banks, thrifts, mortgage banking firms,
consumer finance companies, credit unions, securities brokerage
firms, insurance companies, money market and other mutual funds and
other financial institutions operating in our market areas and
elsewhere, including institutions operating regionally, nationally
and internationally, together with such competitors offering
banking products and services by mail, telephone, computer and the
Internet; and the failure of assumptions underlying the
establishment of reserves for possible loan losses.
The risks relating to the proposed Fourth Street
merger include, without limitation: the timing to consummate the
proposed merger; the risk that a condition to 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 diversion of management time on issues related to
the proposed merger; unexpected transaction costs, including the
costs of integrating operations; the risks that the businesses will
not be integrated successfully or that such integration may be more
difficult, time- consuming or costly than expected; the potential
failure to fully or timely realize expected revenues and revenue
synergies, including as the result of revenues following the merger
being lower than expected; the risk of deposit and customer
attrition; any changes in deposit mix; unexpected operating and
other costs, which may differ or change from expectations; 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 by competitors; as well as
the difficulties and risks inherent with entering new markets.
All written or oral forward-looking statements
attributable to us are expressly qualified in their entirety by
this cautionary notice, including, without limitation, those risks
and uncertainties described in our annual report on Form 10-K for
the year ended December 31, 2018, under "Special Cautionary Notice
Regarding Forward-looking Statements" and "Risk Factors", and
otherwise in our SEC reports and filings. Such reports are
available upon request from the Company, or from the Securities and
Exchange Commission, including through the SEC's Internet website
at www.sec.gov.
Charles M. ShafferExecutive Vice PresidentChief
Operating Officer andChief Financial Officer(772)
221-7003Chuck.Shaffer@seacoastbank.com
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