SARASOTA — Winter Haven-based CenterState Banks Inc., one of the largest and fastest growing community banks in Florida, has acquired the parent company of Sarasota-based Gateway Bank of Southwest Florida in a $142.5 million deal.
The deal for Gateway Financial Holdings of Florida, also the parent company of Gateway Bank of Florida and Gateway Bank of Central Florida, is worth about 1.85 times Gateway's core tangible book value. The deal provides shareholders from when the bank was formed in early 2006 a return that roughly doubles the original investment. The $142.5 million valuation of the purchase, according to a transaction analysis from the Hovde Group, is based on both publicly traded CenterState's closing price on Nov. 29 and the current value of the bank's stock options.
The acquisition also marks a local milestone. After this deal and two other recent acquisitions close, there will be only one bank charted with a Sarasota headquarters: Sabal Palm Bank, with $137.5 million in assets through Sept. 30.
Gateway, in total, operates nine banking locations in the Sarasota-Bradenton, Deltona-Daytona Beach-Ormond Beach and Ocala-Gainesville-Villages MSAs. The bank had $880 million in assets, $543 million in loans and $722 million in deposits through Sept. 30, according to a statement.
“We are delighted to announce this partnership with Gateway Bank,” CenterState President and CEO John Corbett says in the statement. “The merger is financially rewarding for both sets of shareholders and it provides a logical expansion into attractive markets on the Interstate 4 and Interstate 75 corridors.”
Gateway CEO Shaun Merriman, who launched the Sarasota unit of the bank in 2006, says the deal came together naturally after multiple conversations with Corbett and other senior leaders at both banks. Gateway and CenterState have had a banking correspondence agreement for several years, Merriman adds, and the executives sat on boards together.
“We didn't look for a sale,” Merriman says in an interview today with the Business Observer. “We didn't put a for sale sign in front of the bank. But if you were looking for a bank to partner with, then there couldn't be a better match than CenterState.”
Merriman adds that a key part of the deal, beyond metrics, for both sides is that CenterState sought four-year contracts for each Gateway market leader, to run their respective units. Most bank acquisitions come with one-year contracts for local executives, but Merriman says CenterState puts a premium on leadership consistency.
CenterState Banks acquired Brandon-based Platinum Bank Holding Co., parent company of Platinum Bank, in October for nearly $84 million. Platinum operates seven branches in the Tampa-St. Petersburg-Clearwater and Lakeland-Winter Haven regions. With the Platinum and Gateway deals, CenterState would have about $6.5 billion in assets, $4.3 billion in loans and $5.3 billion in deposits.
The boards of both banks unanimously approved the deal. The transaction is expected to close in the second quarter of 2017 subject to customary conditions, regulatory approvals and approval form Gateway shareholders.