Synovus Financial To Buy FCB Financial In $2.9 Bln Deal; Q2 Profit Rises

(RTTNews) - Synovus Financial Corp. (SNV) said that it agreed to acquire FCB Financial Holdings Inc. (FCB), owner of Florida Community Bank (FCB). Based on Synovus' closing share price on July 23, 2018, the transaction is valued at $58.15 per FCB share or $2.9 billion in aggregate.

With the addition of FCB, Synovus will become a top five regional bank by deposits in the Southeast region with pro forma $36 billion in deposits and $44 billion in assets. The transaction is expected to close by the first quarter of 2019.

Following the closing, FCB will merge with Synovus Bank and operate under the Synovus brand, and FCB Financial Holdings President and CEO Kent Ellert will be executive vice president of Synovus and Florida market president.

As per the terms of the merger agreement, FCB shareholders will receive a fixed ratio of 1.055 shares of Synovus common stock for each common share of FCB in an all-stock transaction. Based on Synovus' closing share price on July 23, 2018, the transaction is valued at $58.15 per FCB share or $2.9 billion in aggregate. Following completion of the merger, former FCB shareholders will own approximately 30% of the combined company. In addition, based on the exchange ratio, Synovus' most recent quarterly dividend translates to a pro forma annualized dividend of $1.06 per FCB share. The transaction is expected to be tax free to FCB shareholders.

Synovus expects approximately $40 million in pretax synergies to be fully realized by 2020. Excluding one-time charges, Synovus expects the acquisition to be approximately 6.5% accretive to earnings per common share in 2020 and to deliver strong returns on capital. The transaction is expected to produce tangible book value per share dilution of 3.3% with an earnback period of less than two years.

The merger agreement has been unanimously approved by both companies' Boards of Directors. The merger is subject to customary closing conditions, including approval by Synovus and FCB Financial Holdings shareholders and approval by state and federal bank regulators.

Separately, Synovus Financial reported that its net income available to common shareholders for the second-quarter ended June 30, 2018 was $108.6 million or $0.91 per share compared to $73.4 million or $0.60 per share for the second quarter 2017.

Adjusted earnings per share for the second quarter 2018 were $0.92, a 52.6% increase from the second quarter 2017.

Total revenues were $359.3 million, an increase of 12.3% from the prior-year quarter.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.88 per share and revenues of $356.53 million. Analysts' estimates typically exclude special items.