Regent Bancorp, Inc., Davie, FL (OTC: RGTB) has executed a definitive agreement to merge with and into Stonegate Bank, Pompano Beach, FL (NASDAQ: SGBK)
DAVIE, FL–(April 26, 2016) – Regent Bancorp, Inc. (OTC: RGTB) announced today the signing of a definitive agreement by which Stonegate (NASDAQ: SGBK) will acquire all the operations of Regent Bancorp, Inc. (“RBI”), including its wholly owned subsidiary, Regent Bank. Stonegate Bank’s management expects the combination will increase total assets to approximately $2.7 billion and will rank Stonegate Bank as the 9th largest bank headquartered in Florida.
Under the terms of the agreement, RBI shareholders will be entitled to receive 0.2893 shares of SGBK common stock for each share of RBI common stock, subject to adjustment in accordance with the terms of the merger agreement. The transaction is valued at approximately $9.02 per RBI share or $40 million in the aggregate, based on the closing price for SGBK common stock on April 25, 2016. The value of the total consideration expected to be received by RBI’s common shareholders represents approximately 1.4x RBI’s tangible book value at March 31, 2016 and 1.3x RBI’s estimated pro forma tangible book value at transaction close (based on anticipated transaction close in the third quarter of 2016 and incorporating the estimated purchase accounting marks and, as part of the transaction, the anticipated reversal of the valuation allowance against RBI’s deferred tax asset).
Regent Bank, headquartered in Davie, Florida, is a state chartered bank operating five branches located in Broward and Palm Beach Counties, Florida. RBI is the bank holding company for Regent Bank. As of December 31, 2015, RBI had total assets of $363 million, total loans of $274 million and total deposits of $293 million, on a consolidated basis.
“This acquisition significantly expands our deposit market share in Broward County to approximately 2.2%, resulting in Stonegate having the largest deposit market share of any community bank in Broward County,” said Dave Seleski, President and Chief Executive Officer of Stonegate Bank. “In addition, we increase our branch network to 3 branches in Palm Beach County with close to $350 million in total deposits. After consummation of the merger, Stonegate’s total combined deposits in southeast Florida are expected to exceed $1.5 billion. The combination will give Stonegate more leverage to deliver products to our target market in southeast Florida.”
Stonegate estimates the transaction to be immediately accretive to earnings per share with single digit accretion in the first full year. Furthermore, the transaction is expected to be immediately accretive to Stonegate Bank’s tangible book. This transaction will mark Stonegate’s ninth acquisition since 2009.
The merger has been approved by the Board of Directors of Stonegate Bank and RBI. In addition to certain customary closing conditions, approval by the shareholders of Regent Bancorp, Inc. and Stonegate Bank, as well as the applicable bank regulatory agencies, will be required prior to completing the transaction. The closing is expected to take place late in the third quarter of 2016.
Hovde Group, LLC served as financial adviser to Regent Bancorp, Inc. and rendered a fairness opinion in connection with the transaction. Smith Mackinnon, P.A. served as legal counsel to Regent Bancorp, Inc. Keefe, Bruyette & Woods, Inc. served as financial adviser to Stonegate Bank. Gunster, Yoakley & Stewart, P.A. served as legal counsel to Stonegate Bank.