The joining together of Conway, Ark.-based Home BancShares Inc. and Pompano Beach, Fla.-based Stonegate Bank marks the culmination of their Florida buying spree of two dozen banks in 12 years.
Both banks have been heavy acquirers of Florida banks, scooping up several failed institutions during the bank receivership crisis of 2009 and 2010, and continuing with open bank deals as bank failures abated.
Both banks entered Florida at the same time in 2005. Stonegate was a de novo bank that opened March 7, 2005, in Fort Lauderdale, Fla., after raising $35 million in capital. The CEO at the helm when it opened, David Seleski, is still CEO today. In the bank's de novo application, it said its slogan would be "Private Bank for Business," with a focus on commercial/corporate and commercial real estate lending. Stonegate was one of many bank startups in the South Florida market during 2005 and 2006. Since then, Stonegate has acquired nine banks in Florida with a combined $2.14 billion in assets for a total deal value of $214.7 million, not including asset discounts taken in failed-bank deals. Stonegate has grown to $2.9 billion in assets, with almost all of its business operations within Florida.
Home BancShares operated in Arkansas before moving into Florida in a deal announced in March 2005. John Allison co-founded Home BancShares in 1998 and is still chairman. In its first Florida bank deal, Home BancShares agreed to acquire Marathon, Fla.-based Marine Bank and its seven branches in the Florida Keys. Home BancShares began opening additional branches in Southwest Florida and went on to acquire 14 more banks in Florida, of which seven were government-assisted. In all, Home Bancshares has acquired $4.18 billion in Florida bank assets, based on disclosures at the time of the deal closing, for a total of $328.4 million in deal value.
The $778 million acquisition of Stonegate Bank represents a much larger deal than Home BancShares has done in Florida, though it bought a comparably sized bank in Arkansas: Jonesboro, Ark.-based Liberty Bancshares Inc., which had $2.86 billion in assets when it was acquired in 2013. As Allison pointed out during a conference call to discuss the deal, Stonegate is one of the few sizable banks remaining in Florida. According to SNL Financial data, there are only 12 larger banks, and two of them are already targets of mergers.
While both banks have low levels of nonperforming loans, they are both concentrated in commercial real estate loans, according to the concentration criteria outlined in regulators' 2006 guidance. Home BancShares unit Centennial Bank's commercial real estate loans totaled 357% of total risk-based capital at Dec. 31, while Stonegate Bank reported that its CRE loans were 304% of risk-based capital. Both banks also had three-year CRE loan growth well above the 50% threshold.
The charts for this article were compiled using SNL's M&A data, branch data, and mortgage analytics data.
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