Merger Creates the 8th Largest Bank Headquartered in the Southeast
WINTER HAVEN, FL & COLUMBIA, SC – CenterState Bank Corporation, the parent company of CenterState Bank, and South State Corporation, the parent company of South State Bank, jointly announced that they have entered into a definitive agreement under which the companies will combine in an all-stock merger of equals with a total market value of approximately $6 billion to create a leading Southeastern-based regional bank.
Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both companies, CenterState shareholders will receive 0.3001 shares of South State common stock for each share of CenterState common stock they own. CenterState shareholders will own approximately 53% and South State shareholders will own approximately 47% of the combined company.
The combined company will operate under the South State Bank name and will trade under the South State ticker symbol SSB on the Nasdaq stock market. The company will be headquartered in Winter Haven, Florida and will maintain a significant presence in Columbia and Charleston, South Carolina; Charlotte, North Carolina; and Atlanta, Georgia.
Robert R. Hill, Jr., CEO of South State, will serve as Executive Chairman of the combined company. John C. Corbett, CEO of CenterState, will be CEO of the combined company. The Board of Directors of the combined company will consist of sixteen directors evenly split between the two legacy companies.
“We are excited to partner with CenterState,” said Robert R. Hill, Jr. “We have great respect for John, the management team and the company CenterState has built. This is a great combination of cultures, which will create tremendous value for our shareholders.”
“We have known and admired Robert and his team for over a decade, and we believe our two organizations are an outstanding fit,” said John C. Corbett, CEO of CenterState. “Combining these two high-performing teams will allow us to build an even stronger company together.”
Strategically Compelling for Both Organizations
- Enhanced Scale to Drive Growth and Improve Profitability: The pro forma organization, with approximately $34 billion in assets and $26 billion in deposits, combines two high-quality companies with comparable credit and management philosophies.
- Strengthens Both Companies: This merger combines two highly respected management teams operating complementary business lines. It also diversifies the geographies of each company into a contiguous six-state footprint, spanning from Florida to Virginia.
- Combines Two Strong Core Deposit Franchises and High-Quality Loan Portfolios: The combined company will benefit from the combination of two low-cost core-funded deposit bases and high-quality loan portfolios, providing a stable source of funds and customers.
- High-Growth Markets: The organization will have locations in 10 of the 15 fastest growing Metropolitan Statistical Areas (MSAs) in the Southeast and will have a pro forma deposit-weighted population growth of 6%. The combined company will have a presence in seven of the ten most populous markets in the Southeast.
- Experienced and Compatible Management Teams: The management teams of the two companies have extensive experience and operate with very similar philosophies and values. Each management team has successfully completed numerous mergers and acquisitions and the subsequent integrations of systems and teams.
Financially Attractive Metrics for Shareholders
- Significant Earnings Per Share Accretion: The transaction is projected to deliver in excess of 20% EPS accretion to South State once cost saves are fully phased in, with minimal tangible book value dilution and a TBVPS earnback period of less than one year.
- Cost Synergies: The companies have identified $80 million in expected annual net cost savings fully phased in by 2022, representing approximately 10% of projected 2020 combined non-interest expenses.
- Leading Pro Forma Profitability: On a pro forma basis, the combined company is expected to deliver robust profitability metrics.
The merger will combine the executive management teams from both organizations. In addition to Robert Hill, Executive Chairman, and John Corbett, CEO, the executive team of the combined company will include three members from each legacy company.
South State Leadership
Will Matthews, Chief Financial Officer
Renee Brooks, Chief Operating Officer
Steve Young, Chief Strategy Officer
Greg Lapointe, Chief Banking Officer
Richard Murray, President
John Pollok, SEVP & Board Member
Approval and Timing
The merger is expected to close in the third quarter of 2020, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company.
– BUSINESS WIRE
CenterState operates as one of the leading Southeastern regional bank franchises headquartered in the state of Florida. Both CenterState and its nationally chartered bank subsidiary, CenterState Bank, N.A. (the “Bank”), are based in Winter Haven, Florida, between Orlando and Tampa. With over $17 billion in assets, the Bank provides traditional retail, commercial, mortgage, wealth management and SBA services throughout its Florida, Georgia and Alabama branch network and customer relationships in neighboring states. The Bank also has a national footprint, serving clients coast to coast through its correspondent banking division.
About South State
South State Corporation is a financial services company headquartered in Columbia, South Carolina with approximately $15.9 billion in assets. South State Bank, the company’s primary subsidiary, provides consumer, commercial, mortgage, and wealth management solutions throughout the Carolinas, Georgia and Virginia. South State has served customers since 1934.