Iberiabank in Lafayette, La., has agreed to buy Florida Bank Group in Tampa, Fla.
Iberiabank will pay $86.5 million in cash and stock for the $524 million-asset Florida Bank Group. The company will also pay $3.5 million to liquidate the value of certain options held by Florida Bank Group investors. The deal is valued at 142% of the seller's tangible book value, subject to certain adjustments.
The acquisition, expected to close in the first quarter, will allow Iberiabank to enter the Florida markets of Jacksonville, Tallahassee and Tampa. Florida Bank Group has 13 branches: eight in Tampa, three in Jacksonville, and one each in Sarasota and Tallahassee. About 0.55% of the seller's assets are classified as nonperforming; Iberiabank said it reviewed 99% of the bank's outstanding loan balances.
"The Tampa Bay area has a very strong concentration of commercial and industrial companies, which is a segment of banking in which our company excels," Daryl Byrd, Iberiabank's president and chief executive, said in a press release Friday.
The $15 billion-asset Iberiabank said it estimates to cut Florida Bank Group's annual pretax expenses by about 31% within six months of the deal's closing. Cost-cutting efforts will include closing a branch in Sarasota and consolidating Florida Bank Group's operations center and mortgage offices.
Merger-related costs are expected to total $20 million, with more than half of those expenses coming from lease and contract terminations. The deal should be neutral to Iberiabank's 2015 earnings per share and "mildly accretive" in future years.
Iberiabank has been an active acquirer this year, agreeing to buy First Private Holdings in Dallas and Teche Holding in New Iberia, La. Also, Iberiabank in April said it would convert a Fort Lauderdale, Fla., loan production office into a full-service branch.
Florida Bank Group, meanwhile, was freed from a memorandum of understating early this year. The memorandum required its bank to maintain a minimum 8% Tier 1 leverage ratio and a minimum 12% total risk-based capital ratio. The bank has a 12.67% total risk-based capital ratio at June 30, prompting Byrd to praise its management team for an "outstanding job in rebuilding their organization and preparing for future client growth opportunities."
Sandler O'Neill and Smith Mackinnon advised Florida Bank Group. Jones Walker advised Iberiabank.