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Synovus to buy Florida bank in $2.9 billion deal

Stock MarketsJul 24, 2018 12:53PM ET
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© Reuters. Synovus to buy Florida bank in $2.9 billion deal

By Diptendu Lahiri and Nikhil Subba

(Reuters) - Synovus Financial Corp (N:SNV) said on Tuesday it would buy a Florida-based bank for $2.9 billion to boost its deposits and become one of the leading lenders in the U.S. Southeast region.

The deal will help Georgia-based Synovus add $9.9 billion in deposits and 50 full-service banking centers, with significant market share in Florida's 10 largest markets including Miami-Dade, the largest by population in the Southeast.

Synovus offered $58.15 per share for Florida Community Bank owner FCB Financial Holdings Inc (N:FCB), representing a discount of 1.8 percent to the stock's Monday close. FCB's shares fell 10.8 percent to $52.80 shortly after midday.

Synovus' shares dropped 8.6 percent to $50.34 as the deal is expected to dilute the bank's tangible book value per share by 3.3 percent. Tangible book value is a measure of a company's core value excluding intangibles such as goodwill.

FCB, formed in 2009 to buy out banks that failed in the wake of the financial crisis, put itself on the block in April, according to a Reuters report. Since then the stock rose 14 percent.

The deal comes after U.S. lawmakers eased regulatory restrictions on small and mid-sized banks by simplifying lending, capital requirements, trading rules and regulation around M&As.

The move has prompted U.S. regional banks to use money freed up from lower taxes to bulk up on deposits through acquisitions at a time when interest rates are still low.

Another U.S. community bank Veritex Holdings Inc (O:VBTX) said on Tuesday it would buy Green Bancorp Inc (O:GNBC) for a deal valued at about $1 billion to gain market share in Texas.

Synovus said it expects the deal to add about 6.5 percent to adjusted earnings per share and about $40 million in pretax savings by 2020.

BofA Merrill Lynch and J.P. Morgan Securities were financial advisers to Synovus, while Sandler O’Neill + Partners, Guggenheim Securities and Evercore Group advised FCB Financial Holdings.

Synovus to buy Florida bank in $2.9 billion deal
 

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