In an unusual deal for Florida’s banking market, two healthy institutions are getting hitched.
Gulfstream Business Bank of Stuart said Tuesday that it will be bought for $77 million by CenterState Banks of Davenport.
Gulfstream Business Bank opened in 1999 and has branches in Stuart, Port St. Lucie, Jupiter and Delray Beach. The bank reported only one money-losing year during the Great Recession and quickly returned to profitability.
Since the economy cratered, Florida bank mergers have seen struggling banks snapped up by stronger institutions. In a departure from that pattern, CenterState Banks (Nasdaq: CSFL) said it’s paying a premium of 1.45 times Gulfstream Business Bank’s book value, a markup Gulfstream President John Tranter called a sign of health for Florida’s banking market.
“This is the largest premium since 2007,” Tranter said. “The scratch-and-dents — the broken banks — are still out there, but they’re not as attractive any more.”
Gulfstream Business Bank began marketing itself for sale earlier this year, and Tranter said the bank brought “quite a few” bids.
Deals for profitable banks were the norm before the economy crashed, but bankers have spent the past half-decade shopping for bargains on troubled institutions.
“This is the healthiest Florida bank that has been sold in years,” said Brady Gailey, an analyst at Keefe, Bruyette & Woods in Atlanta. “There just haven’t been many deals announced for healthy banks.”
CenterState has assets of $2.4 million. Gulfstream Business Bank’s assets total $572 million.
The combination lets CenterState move into Palm Beach and Martin counties. The bank has offices in Fort Pierce and Clewiston, but none in Gulfstream Business Bank’s territory.
Tranter predicted little tumult for Gulfstream Business Bank’s 85 employees. The deal is scheduled to close in January, and Gulfstream Business Bank would keep its name until 2015. It’s unclear whether Gulfstream Business Bank employees will face layoffs.
“There’s no real market overlap,” Tranter said. “There’s going to be some consolidation of back-room and support functions.”
Tranter said he and his top executives will stay with CenterState.