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The 2016 mergers and acquisitions market for community banks on the Gulf Coast has been hot for at least the past year, and the latest sale fits the pattern: Big bank seeks to increase market presence in other parts of Florida through buying a smaller bank.
That's a core reason why Winter Haven-based CenterState Banks Inc. acquired Gateway Financial Holdings of Florida, parent company of Sarasota-based Gateway Bank of Southwest Florida, in a $142.5 million deal announced Nov. 30.
The deal also comes with a somewhat unusual element. At least five Gateway executives, including co-founder Shaun Merriman, have signed four-year contracts to stay with the bank. Most bank acquisitions come with one-year contracts, maybe two, plus a non-compete agreement.
But CenterState CEO John Corbett says locking in leaders such as Merriman was a must-do, just like it was in most of the other dozen bank deals CenterState has made since 2009. When CenterState acquired Brandon-based Platinum Bank in October, for example, the bank signed seven executives to four-year contracts.
“Customers tend to follow the bankers,” Corbett tells Coffee Talk. “We are buying the bank, not just it's balance sheet.”
Gateway Financial Holdings of Florida is the parent entity for two other Gateways, Gateway Bank of Florida and Gateway Bank of Central Florida. The combined Gateway had $880 million in assets, $543 million in loans and $722 million in deposits through Sept. 30, spread through nine branches in the markets. CenterState will have about $6.5 billion in assets, $4.3 billion in loans and $5.3 billion in deposits after the Gateway deal closes. The transaction is expected to close in the second quarter of 2017.
Merriman says the deal came together over time, with many Gateway executives knowing CenterState officials for years. The sale, about 1.85 times Gateway's core tangible book value, provides Gateway shareholders a return that roughly doubles the original investment from when the bank was formed in early 2006.
“We didn't put a for sale sign in front of the bank,” Merriman says. “But if you were looking for a bank to partner with, then there couldn't be a better match than CenterState.”
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