Home BancShares Inc. of Conway, the parent company of Centennial Bank, said Monday that it will acquire Stonegate Bank of Pompano Beach, Florida, a $778.4 million deal that expands Centennial's presence in the Sunshine State and will propel the bank farther beyond the $10 billion-asset mark.
Once the deal is done, the combined company will have about $13.5 billion in total assets.
During an announcement at the Little Rock Regional Chamber on Monday, Home BancShares Chairman Johnny Allison said the merger will make Florida the largest franchise in the company's four-state footprint.
"The acquisition of Stonegate is a game-changer for Home in the Florida market," Allison said in a news release. "Stonegate is a top-tier franchise with high profitability and has the perfect footprint to enhance Home's presence in Florida.
"This is another 'Triple A' transaction for Home: accretive to earnings per share, accretive to book value and accretive to tangible book value. Our shareholders will benefit on day one as we will be stronger together."
The merger is Home BancShares' (Nasdaq: HOMB) biggest ever — even bigger than its $230 million deal to buy Liberty Bancshares Inc. of Jonesboro, which was announced in 2013.
The purchase is Home BancShares' 22nd and the latest of many in Florida, where it just wrapped up a deal to buy Giant Holdings Inc. of Fort Lauderdale, Florida, in an $88.5 million transaction that pushed Home BancShares beyond the $10 billion-asset mark.
Dave Seleski, Stonegate's CEO, said the two companies "are two very high performing franchises with a similar operating philosophy and customer focus.
"This is a great combination for our shareholders, customers and communities," Seleski said.
Under the terms of the agreement, Stonegate (Nasdaq: SGBK) will merge into Centennial and shareholders of Stonegate will receive proceeds from the transaction of about $749.8 million — consisting of $50 million in cash and $699.8 million of Home BancShares common stock.
Stonegate shareholders will get about $28.6 million in cash in cancellation of their options immediately before the merger, for a total transaction value of about $778.4 million.
The acquisition is expected to close in the fourth quarter and is subject to shareholder approval by both companies, regulatory approval and other closing conditions.
Stonegate operates 25 branch locations in Florida with significant presence in Broward and Sarasota counties. As of Dec. 31, 2016, Stonegate had about $3.1 billion in total assets, $2.5 billion in total loans and $2.7 billion in deposits.
At the chamber, Allison presented Seleski with a Hog Hat and Red Wolves football jersey bearing the No. 22, denoting Stonegate as Home BancShares' 22nd acquisition.
Allison said the two organizations would mesh well and work well together because of their similar cultures.
"We will gee and haw fine," said Allison, referring to voice commands to turn a team left or right while plowing a field.
(With reporting by George Waldon.)