FORT LAUDERDALE, FL--(Marketwired - Sep 5, 2013) - Stonegate Bank (OTCBB: SGBK) announced today the signing of a definitive agreement by which Stonegate will acquire all the operations of Florida Shores Bancorp and its two subsidiary banks, Florida Shores Bank - Southeast and Florida Shores Bank - Southwest, including the minority interests in the subsidiary banks held by other investors. Management expects the combination, which will increase the total assets of Stonegate Bank to $1.7 billion, will place Stonegate as the 15th largest Florida bank by total assets. These transactions are valued at approximately $48.8 million based on Florida Shores Bancorp's consolidated financial statements as of June 30, 2013. This valuation, the final purchase price and the consideration to be received by shareholders of the three Florida Shores entities, will be subject to final pricing adjustments which will be determined prior to closing.
Florida Shores Bancorp, headquartered in Pompano Beach, is the holding company for and majority owner of Florida Shores Bank - Southeast and Florida Shores Bank - Southwest. Both banks are state chartered commercial banks. As of June 30, 2013, Florida Shores Bancorp had total consolidated assets of $555.1 million, and currently operates four branches on Florida's west coast between Sarasota and Fort Myers and three branches on Florida's east coast in Boca Raton, Pompano Beach and Ft. Lauderdale.
"This is an especially beneficial acquisition offering synergies that expand our market share in Broward and Palm Beach Counties, in addition to growing our footprint throughout Southwest Florida, with coverage of the Gulf Coast from Naples to Tampa," said Dave Seleski, President and Chief Executive Officer of Stonegate Bank. "The five-star Bauer rating achieved by Florida Shores Bank - Southwest, coupled with both banks' corporate culture, aligns well with Stonegate Bank and provides a strong platform for continued growth in our markets. Stonegate's capital ratios will remain strong and allow the Bank to continue to grow organically and through future acquisitions."
"We are very excited to be joining Stonegate. By becoming part of the Stonegate organization our team of financial professionals will have access to an expanded portfolio of sophisticated deposit, loan and other financial services that will deepen current relationships and build new relationships among our targeted customer base. Stonegate is a respected and well-capitalized bank known throughout Florida for its integrity and financial strength. This will be a great opportunity for our customers and our staff," added Jim Kuhlman, President and Chief Executive Officer of Florida Shores Bank - Southwest.
Stonegate expects the transaction's accretion to earnings per share over the next two years will be between 30% and 35%. Furthermore, it is anticipated that tangible book dilution resulting from the transaction will be recovered in 2.5 years or less. This transaction will mark Stonegate's sixth and largest acquisition since 2009.
"Stonegate Bank has an outstanding reputation for customer service, financial stability and community involvement. Our customers will enjoy banking with Stonegate Bank and see new delivery channels that will result in heightened customer service," said Robert Sewick, President of Florida Shores Bank - Southeast. "Our shareholders and customers will find this transition not only beneficial, but also seamless."
Given the increased capitalization of Stonegate as a result of these proposed transactions and a commitment to all its shareholders to improve the liquidity of its common stock, management expects to file an application to list Stonegate's shares on Nasdaq in the first half 2014. While it is the intention of Stonegate to register its shares and become a reporting company under the Securities Exchange Act of 1934, no assurances can be given that Stonegate's common stock will be registered with the Securities and Exchange Commission or listed on a national stock exchange or as to the timing of any of the foregoing.
The transactions have been approved by the Board of Directors of each of Stonegate Bank, Florida Shores Bancorp, Florida Shores Bank - Southeast and Florida Shores Bank - Southwest. In addition to certain customary closing conditions, approval by shareholders of Florida Shores Bancorp, shareholders of both Florida Shores Bank - Southeast and Florida Shores Bank - Southwest and bank regulators will be required prior to completing the transactions. The closing is expected to take place in the fourth quarter of 2013.
Sandler O'Neill+ Partners served as financial adviser to Stonegate Bank and rendered a fairness opinion in connection with the transactions. The Gunster law firm served as legal counsel to Stonegate Bank. Hovde Group LLC served as financial adviser to Florida Shores Bancorp and its subsidiary banks and rendered fairness opinions in connection with the transactions. Smith Mackinnon PA served as legal counsel to Florida Shores Bancorp and its subsidiary banks.
Conference Call Information
A conference call to discuss the transactions is scheduled for Thursday, September 5, 2013, at 3:00 p.m. EDT. Interested parties are invited to participate by dialing (855) 387-4528 and entering conference ID number 53811106. A replay of this call will be available Thursday, September 5, 2013, at 6:00 p.m. EDT through 6:00 p.m., Tuesday, September 10, 2013, by dialing (855) 859-2056 and entering conference ID number 53811106. An investor presentation regarding the transactions discussed on this call will be available for download at www.stonegatebank.com on the Investor Relations - Bank News and Releases page.
Stonegate Bank is one of Florida's premier business banks. Headquartered in Fort Lauderdale, Stonegate Bank also operates offices in Boca Raton, Jupiter, Coral Springs, Naples, Coral Gables, Fort Myers (2), Tampa and Doral, Florida. While providing innovative solutions for its business clients, Stonegate also delivers highly attentive personal retail banking services. Stonegate pledges to give each and every one of its clients unsurpassed service. The Company's goal is to build an extraordinary organization that is accountable to its clients, shareholders, employees and to the communities it services.
Forward Looking Statements
Any non-historical statements in this press release are "forward-looking statements." Such forward-looking statements are based on current plans and expectations that are subject to uncertainties and risks, which could cause Stonegate Bank's future results to differ materially. The following factors, among others, could cause Stonegate's actual results to differ: our ability to integrate the business and operations of companies and banks that we have acquired, and those that we may acquire in the future; the failure to achieve expected gains, revenue growth, and/or expense savings from future acquisitions; our need and our ability to incur additional debt or equity financing; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the accuracy of our financial statement estimates and assumptions, including the estimate of our loan loss provision; the effects of harsh weather conditions, including hurricanes, and man-made disasters; inflation, interest rate, market and monetary fluctuations; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the frequency and magnitude of foreclosure of our loans; legislative and regulatory changes; our ability to comply with the extensive laws and regulations to which we are subject; the willingness of clients to accept third-party products and services rather than our products and services and vice versa; changes in securities and real estate markets; increased competition and its effect on pricing; negative publicity and the impact on our reputation; technological changes; changes in monetary and fiscal policies of the U.S. Government; the effects of security breaches and computer viruses that may affect our computer systems; changes in consumer spending and saving habits; changes in accounting principles, policies, practices or guidelines; anti-takeover provisions under federal and state law; and our ability to manage the risks involved in the foregoing. Actual results may differ materially from projections and could be affected by a variety of factors, including factors beyond our control. Forward-looking statements in this press release speak only as of the date of the press release, and Stonegate Bank assumes no obligation to update any forward-looking statements or the reasons why actual results could differ.