POMPANO BEACH, FL--(Marketwired - Aug 24, 2016) - Stonegate Bank (NASDAQ: SGBK) announced today the signing of a definitive agreement by which Stonegate will acquire all the operations of Insignia Bank ("Insignia"). Stonegate Bank's management expects the combination will increase total assets to approximately $3.0 billion and will rank Stonegate Bank as the 7th largest bank headquartered in Florida. In addition, this acquisition will make Stonegate Bank the largest community bank by total deposits in Sarasota County.
The transaction is valued at approximately $36.5 million in the aggregate or $13.52 per share of Insignia common stock. The value of the total consideration expected to be received by Insignia's common shareholders represents approximately 1.48x Insignia's tangible book value as of June 30, 2016, adjusted for an anticipated equity contribution pursuant to the anticipated exercise of certain Insignia common stock options.
Under the terms of the agreement, Insignia shareholders will be entitled to receive shares of SGBK common stock. The number of SGBK shares to be issued will be determined based on the 20 trading day average closing price of SGBK's common stock as of the second business day prior to the closing date, subject to a minimum price of $27.69 and a maximum price of $35.60.
Insignia Bank, headquartered in Sarasota, Florida, is a state chartered bank operating two branches located in Sarasota County, Florida, and two Loan Production Offices located in Manatee and Pinellas Counties. As of June 30, 2016, Insignia had total assets of $248 million, total loans of $188 million and total deposits of $210 million.
"This acquisition significantly expands our deposit market share to approximately 3.3% of total deposits in Sarasota County, resulting in Stonegate having the largest deposit market share of any community bank in Sarasota County," said Dave Seleski, President and Chief Executive Officer of Stonegate Bank. "After consummation of the merger, Stonegate's total combined deposits in west Florida are expected to exceed $850 million. The combination will give Stonegate more leverage to deliver products to our target market in west Florida."
"This merger provides significant enhancements for our customers, staff and shareholders afforded by a larger, publicly traded organization with a local presence," said Charles Brown, Insignia Bank Chairman and CEO.
Charles Brown will be CEO of Charlotte, Sarasota and Manatee Counties with Tyrone Shinn as President.
Stonegate estimates the transaction to be accretive to earnings per share, based on the anticipated fully-phased in cost saves, and slightly dilutive to Stonegate's tangible book value per share. This transaction will mark Stonegate's 10th acquisition since 2009.
The merger has been approved by the Boards of Directors of Stonegate Bank and Insignia Bank. In addition to certain customary closing conditions, approval by the shareholders of Insignia Bank and Stonegate Bank, as well as the applicable bank regulatory agencies, will be required prior to completing the transaction. The closing is expected to take place in the first quarter of 2017.
Keefe, Bruyette & Woods, Inc. served as financial adviser to Stonegate Bank. Gunster, Yoakley & Stewart, P.A. served as legal counsel to Stonegate Bank. Hovde Group, LLC served as financial adviser to Insignia Bank and rendered a fairness opinion in connection with the transaction. Smith Mackinnon, P.A. served as legal counsel to Insignia Bank.
Conference Call Information
A conference call to discuss the transaction is scheduled for Thursday, August 25, 2016, at 2:00 p.m. EDT. Interested parties are invited to participate by dialing 1-866-820-3585 and entering conference ID number 69525776. An investor presentation regarding the transaction 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 Pompano Beach, Stonegate Bank also operates 21 banking offices in its target market places of South and West Florida, which are comprised primarily of Broward, Charlotte, Collier, Hillsborough, Lee, Miami-Dade, Palm Beach, and Sarasota Counties in 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. Stonegate Bank's goal is to build an extraordinary organization that is accountable to its clients, shareholders, employees and to the communities it services.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any security holder of Stonegate Bank or Insignia. However, Stonegate, Insignia, their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from Stonegate Bank's and Insignia Bank's shareholders in respect of the merger. Information regarding the directors and executive officers of Stonegate Bank may be found in its Proxy Statement, which was filed with the FDIC on March 18, 2016 and can be obtained free of charge from Stonegate Bank's website or from the FDIC's website (http://www2.fdic.gov/efr). 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 joint proxy statement/prospectus and other relevant materials to be filed with the FDIC when they become available. Investors should read the joint proxy statement/prospectus carefully, when it becomes available, before making any voting decision because it will contain important information
Forward Looking Statements
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to those regarding the proposed merger. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, taxation, technology and market conditions. These statements may be identified by such forward-looking terminology as "expect," "believe," "view," "opportunity," "allow," "continues," "reflects," "typically," "usually," "anticipate," or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ from those contemplated by such forward-looking statements include, but are not limited to, the following: failure to obtain shareholder or regulatory approval for the merger of Insignia Bank with Stonegate Bank or to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe; delays in closing the merger; reaction to the merger of Stonegate Bank's customers and employees; the diversion of management's time on issues relating to the merger; the inability to realize expected cost savings and synergies from the merger of Insignia Bank with Stonegate Bank in the amounts or in the timeframe anticipated; changes in the estimate of non-recurring charges; costs or difficulties relating to integration matters might be greater than expected; changes in the stock price of Stonegate Bank prior to closing; material adverse changes in Insignia Bank's or Stonegate Bank's operations or earnings; the inability of Stonegate Bank to retain Insignia Bank's customers and employees; or a decline in the economy, mainly in South or West Florida, as well as the risk factors set forth in Stonegate Bank's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, each filed with the FDIC. Stonegate Bank does not assume any obligation for updating any such forward-looking statement at any time.