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Bank M&A activity Grows on Gulf Coast

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  • | 10:00 a.m. September 6, 2010
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A bank in the hand is worth two in the bush.

Fort Lauderdale-based Stonegate Bank isn't waiting around to bid on failed banks on the Gulf Coast like it did in October 2009 with Partners Bank and Hillcrest Bank, both in Naples.

Stonegate recently acquired Southwest Capital Bank in Fort Myers in an all-stock transaction valued at about $9.4 million, or 62% of book value, says David Seleski, Stonegate's president and CEO. In addition, Seleski says the Southwest Capital shareholders are entitled to an additional $2.8 million if the loan portfolio meets a three-year performance goal.

Seleski, whose bank has raised $42 million in the last year, says Stonegate has been exploring deals outside FDIC assistance as it seeks to establish a presence on the Gulf Coast. The bank has $578 million in assets and reported second-quarter profits of $860,000, or 11 cents per share.

Southwest Capital Bank was established in July 2006 and reported assets of $121 million. However, the bank hasn't been profitable since its inception and has lost nearly $1.4 million in the first six months of this year, according to the FDIC.

Still, Stonegate says the deal for Southwest Capital will be “immediately accretive” by 12 cents to 15 cents per share due to cost savings. Stonegate is publicly traded (symbol: SGBK) and the stock recently traded at $14.40.

Bruce Schultz, president and CEO of Southwest Capital Bank, will oversee the bank's operations in Lee County under the Stonegate banner. In addition, Gerald Laboda, the vice chairman of Southwest Capital Bancshares, the parent of Southwest Capital Bank, will join the Stonegate board.

“We were very impressed with the board and with management. We felt like the corporate cultures were similar,” says Seleski.

Seleski says Stonegate will continue to look for deals on the Gulf Coast. When the economic recovery takes hold, Seleski says the Gulf Coast's affordability will give it the advantage over the east coast.


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