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Business Observer Friday, Sep. 16, 2016 2 years ago

The right fit

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By the time it completes its acquisition of Sarasota-based Insignia Bank, Stonegate Bank will have bought six lenders on the Gulf Coast. Next up: a march into the Tampa-St. Petersburg market.
by: Jean Gruss Contributing Writer

Pompano Beach-based Stonegate Bank has hopscotched up and down the Gulf Coast since 2009, buying banks from Naples to Tampa.

Now it's adding depth to the region with its acquisition of Insignia Bank — Stonegate's second acquisition in the Sarasota area. When completed early next year, the deal will make Stonegate the largest community bank in Sarasota by deposit market share, with $412 million. “It's going to be one of the higher growth markets in Florida,” says David Seleski, the CEO of Stonegate Bank.

But Stonegate isn't done scouting for more acquisitions, and that includes building its presence in the Tampa and St. Petersburg markets. Stonegate entered the Tampa market in June 2011 when it acquired the failed First Commercial Bank of Tampa Bay from the Federal Deposit Insurance Corp.

“Back four years ago we were everywhere but nowhere,” Seleski says. “Now it's about getting scale in the markets we are in.”

When it completes the Insignia acquisition, Stonegate will become the seventh-largest bank in Florida, with more than $3 billion in assets. The company's stock, which Stonegate uses as currency for its acquisitions, has been listed on the Nasdaq stock exchange for two years (symbol: SGBK; recent price: $32.90; dividend yield: 1%).

Stonegate says it will pay Insignia shareholders about $36.5 million in stock. That's about 1.48 times Insignia's tangible book value, in line with prices paid for healthy banks on the Gulf Coast since the economic recovery. It's also about the same multiple that Stonegate paid for Florida Shores Bank — Southwest in Venice two years ago.

In the immediate future, Seleski plans to make a push into Manatee County and then further into the Tampa Bay area. “We really want to have a strong presence from Naples to Tampa, but you have to be opportunistic,” Seleski says. “Tampa-St. Pete would be our No. 1 focus, no question.”

Although Seleski acknowledges the Tampa Bay area is more competitive, there are also more customers there than further south. “It all equals out,” he says.

Stonegate Bank has built a diversified portfolio of loans across regions and asset classes, from owner-occupied commercial real estate to residential homes and business lending. Seleski says he isn't concerned about commercial real estate valuations in part because population growth is continuing. “I still think this economy has a lot of legs,” he says.

Because real estate values haven't risen as much on the west coast as on the east coast of Florida, Seleski says the region from Tampa to Naples has better growth prospects. “It's been a great market for us,” Seleski says.

Stonegate is even looking south of Florida: It has helped establish banking services for U.S. companies that want to open offices in Cuba. “There's a lot of Florida corporations that are looking at Cuba as a great opportunity,” Seleski says. “We're hoping to fill that void.”

— Mark Gordon and Jean Gruss

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