Ameris Bank announced this morning it is acquiring Savannah’s Coastal Bank, the latest in a consolidation trend among southeastern community banks.
Announced early Tuesday, Ameris Bancorps said it is signing a merger agreement with Coastal Bankshares, Coastal Bank’s parent company, in an all-stock deal worth $36.7 million.
“Joining Ameris affords our customers an array of new products and a four-state footprint,” said Jim LaHaise, president and CEO of The Coastal Bank.
In a conference call, Ameris CEO Ed Hortman said the merger will help increase Ameris’ presence along the coast.
“It positions us as the largest community bank on the Georgia Coast ... and we’ll gain the critical mass we need,” said Hortman. “Their operating style and the cultural fit between our two companies is remarkable, which leads me to believe this will be a successful merger.”
While Ameris will be retaining Coastal’s management team, Hortman said there are at least three opportunities for branch consolidation. He did not specify which of Coastal branches may be affected.
Established in 1954, the locally owned and operated Coastal Bank has grown to six branches, 113 employees and assets of $432 million.
According to Georgia Southern University banking analyst Ed Sibbald, Coastal Bank ranks fifth in deposit market share while Ameris is 10th among 22 banks in Chatham County. With the acquisition, Ameris will be propelled to fifth in deposit market share in the area.
The Coastal Bank came out of the recession relatively better than some other local institutions, returning to a healthy capital ratio and balance sheet between 2011 and 2012. The bank had a solid year in 2013, posting higher margins than the previous year and increasing its lending, according to LaHaise.
Founded in 1971 in Moultrie, Ga., Ameris Bank is a large regional community bank spread across four southeastern states. They expanded their presence in the Savannah area around 2010 after taking over troubled Darby Bank & Trust, which had locations in Vidalia and Pooler — and whose risky lending activity extended into Savannah. Darby was one of many Georgia institutions closed by regulators during the banking crisis.
“That was really their primary foothold in the Savannah market, and that’s where they’ve been operating from is the old Darby Banks that failed,” said Sibbald.
Ameris has acquired the assets of 10 failed banked in Georgia and Florida with the assistance of the FDIC since 2009, according to Sibbald.
Ameris now has 68 branches, 835 employees and assets of $3.6 billion. Between 1992 and 2013, Ameris acquired a total of 27 institutions, the majority of them in Georgia, but also extending its reach into Florida, South Carolina and Alabama.
Upon completion of the merger, the combined company will have about $4.1 billion in assets, $2.8 billion in loans, $3.4 billion in deposits and 74 banking locations across four states.
Dennis Zember, chief financial officer of Ameris, said the deal would improve operating efficiencies and produce about $8.6 million in cost savings, including $2.4 million from overlapping branches and $2.6 million in backroom consolidation, the majority from personnel.
Consolidation
The acquisition is in line with a consolidation trend among regional community banks looking to expand their footprint. Sibbald said the move will allow Ameris to strengthen its position along the coast and into Effingham and Liberty County, where it currently doesn’t have any branches.
“I think what they’re trying to do is solidify and build their market share along the I-95 corridor,” said Sibbald.
The Coastal Bank ranks fourth in deposit market share in Effingham and second in Liberty County. He said it likely won’t be the last merger in the overall southeastern coastal region as local community banks look to build economies of scale and spread their asset base.
“Is there going to be further consolidation? I think so,” said Sibbald.
First Financial Holdings, parent company of South Carolina Bank and Trust, completed its acquisition of The Savannah Bank just last year. The company announced last month it would be rebranding all of its subsidiaries as South State Bank to reflect a more regional footprint.
Ameris said new signage for The Coastal Bank wouldn’t be issued until next fall when the deal closes.
There are 223 banks based in Georgia, about five fewer than last year. The Georgia Bankers Association said three were due to in-state mergers and acquisitions, a change from the closures that swept the state in the aftermath of the banking crisis.
With this latest merger, that leaves First Chatham and Carver State Bank as the only two locally owned and operated institutions headquartered in Savannah. Several other community banks have branches in Savannah, including S Bank and Heritage Bank.
Under the terms of the agreement, Coastal shareholders will receive 0.4671 shares of Ameris common stock for each share of Coastal common stock. The deal is valued at about $10 per Coastal share, according to the press release.
The transaction is expected to close in the third quarter of 2014, subject to regulatory and shareholder approval.
Financial Comparison:
The Coastal Bank
Established: 1954
Locations: 6, headquartered on Johnson Square
Employees: 113
Assets, 2013: $432.8 million
Deposits, 2013: $364.4 million
Loans: $295 million
Ameris Bank
Established: 1971
Locations: 68, headquartered in Moultrie, Ga.
Employees: 835
Assets, 2013: $3.6 billion
Deposits, 2013: $3 billion
Loans: $2.5 billion
Source: Federal Deposit Insurance Corp. and Ed Sibbald, GSU