CenterState Bank Corporation Announces Acquisition of National Commerce Corporation
Monday, November 26th, 2018
CenterState Bank Corporation and National Commerce Corporation, jointly announced today the signing of a definitive agreement pursuant to which National Commerce will merge with and into CenterState in an all-stock transaction. This combination of two high-performing banks will create a leading Southeastern regional bank, with branches in Florida, Georgia and Alabama. As of September 30, 2018 and excluding purchase accounting, the combined company has pro forma total assets of $16.4 billion, gross loans of $11.5 billion, deposits of $12.8 billion and a market capitalization of approximately $3.2 billion. Over 75% of the pro forma deposit base will be in Florida.
Upon completion of the merger, Richard Murray, IV, Chairman and Chief Executive Officer of National Commerce, will join CenterState as Chief Executive Officer of the Company's wholly-owned bank subsidiary, CenterState Bank, N.A., and William E. Matthews, V, President and Chief Financial Officer of National Commerce, will join CenterState as Chief Financial Officer of both the bank and the holding company.
"We have enjoyed a nineteen year business relationship with Richard, Will and other members of the National Commerce team that confirms our cultural alignment," said John Corbett, President & Chief Executive Officer of CenterState. "This partnership not only strengthens our management team, but it also deepens our franchise in our core markets of Orlando, Tampa, Jacksonville, and Atlanta. We are also excited to welcome a seasoned team of Alabama bankers with a proven record of success."
"For years, we have had great respect and admiration for CenterState and we are thrilled to play an important role in helping build upon our common culture and values," noted Richard Murray. "This partnership enables National Commerce stockholders to benefit from accelerating growth and capitalizing on opportunities in our markets. By joining up and joining in with the CenterState team, together we will realize benefits it would have taken us years to accomplish independently."
Subject to the terms of the merger agreement, National Commerce stockholders will receive 1.65 shares of CSFL common stock for each outstanding share of National Commerce common stock. Each outstanding option to purchase shares of National Commerce common stock will be assumed by CenterState and become an option to purchase shares of CenterState common stock, with the exercise price and number of shares underlying the option adjusted to reflect the exchange ratio of 1.65. Based on CSFL's stock price of $24.25 as of November 23, 2018, this equates to a per share value of $40.01 and an aggregate transaction value of $850.4 million. Additionally, three National Commerce directors will join both the Company board and the CenterState Bank board and one additional director will join the CenterState Bank board.
The transaction is expected to result in mid-single-digit EPS accretion on a fully phased in basis and limited tangible book value dilution, expected to be earned back in approximately two years.
The merger agreement has been unanimously approved by the board of directors of each of National Commerce and CenterState. Completion of the merger is subject to customary closing conditions, including receipt of required regulatory approvals and the approval by the stockholders of both National Commerce and CenterState. The transaction is expected to close in the 2nd quarter of 2019.
Raymond James & Associates, Inc. served as financial advisor and Nelson Mullins Riley and Scarborough LLP served as legal counsel to CenterState in the transaction. Keefe, Bruyette & Woods, Inc. served as financial advisor and Maynard Cooper & Gale, P.C. served as legal counsel to National Commerce in the transaction.