3 Fla. bank deals announced in 3 weeks

Florida bank M&A has picked up in recent weeks, even as M&A activity has slowed elsewhere across the U.S.

Between April 26 and May 12, three deals were announced with a Florida-based bank target, pushing the total number of deals announced in 2022 to five, according to S&P Global Market Intelligence data.

This article is part of S&P Global Market Intelligence's series of state profiles, which take an in-depth look at M&A and key banking metrics for banks and thrifts with less than $10 billion in assets.

Preferred hunting ground

On May 12, Dearborn, Mich.-based DFCU Financial announced it would acquire Tampa-based First Citrus Bancorp. Inc., becoming the seventh credit union acquisition of a bank announced this year. Florida has been targeted in 13 different credit union-bank acquisitions since 2015, more than any other state in the country. In 2021, two credit union-bank acquisitions were announced in the state. Both have already closed.

First Citrus is one of the few publicly traded banks to be targeted by a credit union. DFCU offered $47.75 per share to First Citrus shareholders, a premium to the bank's share price of below $30 shortly before the announcement.

Eight days earlier, on May 4, Stuart, Fla.-based Seacoast Banking Corp. of Florida announced its second Florida bank deal of the year, a $173.2 million acquisition of Chiefland-based Drummond Banking Co. Earlier in the year, on March 29, Seacoast announced it would buy Miami-based Apollo Bancshares Inc. for $168.3 million.

As of March 31, Apollo Bank and Drummond Community Bank were the 21st- and 19th-largest community banks under $10 billion in assets in Florida, and the first banks Seacoast has targeted with more than $1 billion in assets.

Seacoast has been a prolific acquirer in Florida, announcing 10 of the state's 61 deals since the beginning of 2017, including three in 2021.

On April 26, Hattiesburg, Miss.-based First Bancshares Inc. announced a $116.7 million acquisition of Fort Walton Beach-based Beach Bancorp Inc., its fourth Florida whole-bank acquisition announced in five years.

Already this year, Florida bank M&A announcements have equaled 2020's five announcements and are on pace to surpass 2021's eight announcements. Overall M&A activity has trended lower over the past few years in the state, however, as available targets have dwindled.

Community banks less profitable than peers

Florida's banks and thrifts under $10 billion in assets were less profitable in the first quarter, posting a lower median return on average equity and net interest margin than the median for community banks in both the Southeast and U.S. as a whole. Loan growth also lagged the regional and national marks.

However, both the state's median deposit growth and median nonperforming assets ratio were better than the regional and U.S. medians.

Top 25 community banks by assets

Coral Gables-based Amerant Bank NA, Florida's largest community bank under $10 billion in assets, underperformed compared to the state median in five of the six major banking metrics examined. During the first quarter, Amerant launched marketing and account opening campaigns to drive both digital and foot traffic, which helped increase new account openings, according to a transcript of Amerant Bancorp Inc.'s April 21 first-quarter earnings conference call.

Miami-based Ocean Bank, the state's second-largest community bank by assets, was more profitable than the state median in both ROAE and net interest margin. The bank also surpassed the state, regional and national medians for loan growth at 5.3% year over year. At the end of 2021, Ocean Bank was the country's sixth-largest Hispanic American designated minority depository institution in the country by assets.

Florida, like the rest of the U.S., is seeing more branch closures than openings as customers move to digital channels and banks look to cut costs. For the 12 months ended March 31, there were 278 bank and thrift branch closures in the state, compared to only 73 openings.