Enterprise Financial Services, Seacoast Commerce Banc sign merger deal

US bank holding companies Enterprise Financial Services (EFSC) and Seacoast Commerce Banc (SCBH) have signed a $156 million worth deal to create a leading small business administration lender (SBA lender) in the country.

As per the terms of the all-stock deal, Enterprise Financial Services will acquire Seacoast Commerce Banc for $15.8 per share.

The combined bank holding company after the merger will have around $9.7 billion in consolidated total assets, as of 30 June 2020.

Based in San Diego, California, Seacoast Commerce Banc is the owner of the Seacoast Commerce Bank. It has total assets under management of approximately $1.3 billion, $1.1 billion in loans, and $1 billion in deposits, as of 30 June 2020.

Seacoast Commerce Bank has four full-service banking offices in San Diego and one in Las Vegas, Nevada besides 20 loan production offices and six deposit production offices across the US.

The California-based bank is said to be one of the SBA lenders in the US, having funded over $2 billion in SBA loans in the last 10 years.

Enterprise Financial Services, on the other hand, is an $8.4 billion firm based in Clayton, Missouri. It owns the Enterprise Bank & Trust, which operates 34 branch offices across Missouri, Kansas, Arizona, and New Mexico.

Enterprise Financial Services, Seacoast Commerce Banc sign merger deal

Richard M. Sanborn – CEO of Seacoast Commerce Banc said: “With Enterprise, we have taken the next step to move our organization forward with a partnership that we believe provides the infrastructure and balance sheet strength to continue our growth path. Both Enterprise and Seacoast have a shared set of values and commitment to service. I am excited for what this acquisition will provide for our combined customers, associates, and shareholders.

“While the whole stock nature of the transaction provides an attractive premium based on our current trading price, as the economy ultimately stabilizes and equity prices improve, we believe the earnings power of the combined organization will deliver enhanced value to both sets of shareholder groups.”

Under the terms of the merger, shareholders of Seacoast Commerce Banc will be issued 0.5061 shares of Enterprise Financial Services in exchange for each of their shares. This gives the original shareholders of Enterprise Financial Services a stake of around 84% in the enlarged bank holding company, while the existing shareholders of Seacoast Commerce Banc will settle with the remaining stake of around 16%.

Enterprise Financial Services and Enterprise Bank & Trust will be the names that will be retained for the combined bank holding company and bank, respectively.

Jim Lally – President and CEO of Enterprise Financial Services said: “We are excited to announce this transaction and believe the combination of the two organizations is an excellent fit for our business model.

“Rick and his team have built an extraordinarily successful SBA platform that will complement our commercial and specialty lending verticals, with the SBA division continuing to be led by David Bartram and Rick Visser. In addition, Seacoast’s depth and expertise in successfully attracting specialty deposit relationships in the property management, homeowners’ associations, and 1031 exchange industries will further diversify our funding base.

“We believe these niches will help us continue to execute on our strategy of building a reliable and cost-effective funding base and generating profitable growth in the future to the benefit of our collective shareholders.”

Subject to customary closing conditions, which include approval of Seacoast Commerce Banc’s shareholders, the merger is expected to be finalized in late 2020 or early next year.