State Bank Financial in Atlanta has agreed to buy AloStar Bank of Commerce in Birmingham, Ala.

The $4.2 billion-asset State Bank said in a press release Thursday that it will pay $196 million in cash for the $944 million-asset AloStar. The deal is expected to close in the fourth quarter.

AloStar was founded in 2011 after the failure of Nexity Bank. The bank has $763 million in loans and $715 million in deposits. The bank only has $13 million of legacy Nexity loans; such loans totaled $200 million in 2011.

State Bank CEO Tom Wiley.
State Bank in Atlanta, led by CEO Tom Wiley, plans to make a big push into asset-based lending with its pending purchase of AloStar.

State Bank said it expects the transaction to be significantly accretive to its 2018 and 2019 earnings per share. It should take less than one and a half years to earn back the deal’s dilution to State Bank’s tangible book value.

“This merger adds a complementary lender finance line of business and [a] scalable asset-based lending platform, which will further diversify our loan portfolio,” Tom Wiley, State Bank’s CEO, said in the release. “The all-cash consideration provides meaningful earnings accretion while efficiently leveraging our excess capital.”

Andy McGee, AloStar’s president and CEO, will join State Bank as an executive vice president overseeing it asset-backed lending and lender finance division.

Barclays Capital and Nelson Mullins Riley & Scarborough advised State Bank. Keefe, Bruyette & Woods and Skadden, Arps, Slate, Meagher & Flom advised AloStar.

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