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CenterState to cross $10B threshold with 2 Fla. deals

Winter Haven, Fla.-based CenterState Banks Inc. is poised to cross the $10 billion asset threshold with its proposed acquisitions of Fort Pierce, Fla.-based HCBF Holding Co. Inc. and Plant City, Fla.-based Sunshine Bancorp Inc. The deals are valued at $416.7 million and $176.7 million, respectively.

HCBF Holding shareholders will receive 0.675 of a CenterState common share and $1.925 in cash for each HCBF Holding share held. Based on CenterState's stock price as of Aug. 11, the transaction equates to a per-share value of $18.08.

SNL calculates the CenterState-HCBF Holding deal value to be 179.6% of book, 200.9% of tangible book and 53.7x earnings, on an aggregate basis. It is also 25.49% of deposits and 21.26% of assets. The premium to tangible book is 13.48% of core deposits.

Their merger will result in CenterState expanding in Florida with 46 branches to be ranked No.15 with a 1.30% share of approximately $540.46 billion in total market deposits.

Sunshine Bancorp shareholders, meanwhile, will receive 0.89 of a CenterState common share for each outstanding Sunshine Bancorp share. The transaction equates to a per-share value of $21.30.

SNL calculates the CenterState-Sunshine Bancorp deal value to be 146.6% of book, 181.1% of tangible book and 54.6x earnings, on a per-share basis. It is also 27.7x last-12-months core earnings, 22.81% of deposits and 18.51% of assets. It carries a tangible book premium-to-core deposits ratio of 12.64%. The deal has a one-day discount of 6.09%, based on Sunshine Bancorp's Aug. 11 closing price of $22.68, and a one-month discount of 3.89%, based on Sunshine Bancorp's July 12 closing price of $22.16.

With the Sunshine Bancorp deal, CenterState will expand in Florida by 18 branches to be ranked No. 18 with a 1.12% share of approximately $540.46 billion in total market deposits.

SNL valuations for bank and thrift targets in the Southeast region between Aug. 12, 2016, and Aug. 12, 2017, averaged 177.94% of book and 192.42% of tangible book and had a median of 22.39x last-12-months earnings, on a per-share basis.

Aside from the requisite regulatory approvals, the CenterState-HCBF Holding deal is subject to the approval by both companies' shareholders; the CenterState-Sunshine Bancorp deal is subject to the approval by Sunshine Bancorp's shareholders. Both are expected to close in the first quarter of 2018.

For the CenterState-HCBF Holding deal, the two companies set a termination fee of $16.7 million, subject to certain conditions. For the CenterState-Sunshine Bancorp deal, the termination fee is nearly $7.1 million.

As of June 30, HCBF Holding reported assets of $1.9 billion, gross loans of $1.1 billion and deposits of $1.6 billion. Effective July 28, HCBF Holding completed its acquisition of Jefferson Bankshares Inc. and unit Jefferson Bank of Florida, which had approximately $300 million in assets. Also as of June 30, Sunshine Bancorp reported assets of $956 million, gross loans of $694 million and deposits of $781 million.

Upon completion of both transactions, CenterState will have pro forma assets of approximately $10.1 billion, loans of $6.6 billion and deposits of $8.1 billion. Harbor Community Bank and Sunshine Bank will both merge into CenterState Bank NA. The mergers are expected to result in mid-single-digit EPS accretion and minimal tangible book value dilution, to be earned back in fewer than three years on a fully phased-in basis, including the impact of CenterState crossing $10 billion in assets.

HCBF Holding Chairman and CEO Mike Brown Sr. will join the board of CenterState following the transaction.

Keefe Bruyette & Woods Inc. served as financial adviser to CenterState in both transactions. Alston & Bird LLP served as legal counsel to CenterState in the HCBF Holding transaction, and Smith Mackinnon PA served as legal counsel to CenterState in the Sunshine Bancorp transaction.

Sandler O'Neill & Partners served as financial adviser and Skadden Arps Slate Meagher & Flom LLP served as legal counsel to HCBF Holding. Hovde Group served as financial adviser and Luse Gorman PC served as legal counsel to Sunshine Bancorp.

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