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 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.