Jacksonville, NC-based Coastal Bank & Trust will merge into Rocky Mount, NC-based Providence Bank, a subsidiary of PB Financial Corp., in a 75% stock-and-25% cash transaction.
The aggregate consideration that Coastal shareholders will receive in the transaction is valued at about $25.8 million. Coastal shareholders may elect to receive either $10 in cash or 0.2222 of a share of PB Financial's common stock for each Coastal common share, subject to a proration if either election is oversubscribed.
At announcement, S&P Global Market Intelligence calculates the deal value to be 113.93% of common equity and of tangible common equity, 12.28% of deposits, 11.04% of assets and 10.59x earnings. The tangible book premium to core deposits ratio is 1.59%.
Market Intelligence valuations for bank and thrift targets in the Southeast region between Aug. 30, 2022, and Aug. 30, 2023, averaged 158.73% of book and 170.98% of tangible book and had a median of 14.25x last-12-months earnings, on an aggregate basis. On a per-share basis, they averaged 144.77% of book and 168.57% of tangible book and had a median of 12.85x LTM earnings.
The merger is expected to be completed in the second quarter of 2024.
After the deal closes, PB Financial will have about $1.1 billion in assets, $874 million in loans and $893 million in deposits based on publicly reported consolidated financial information as of June 30.
The combined bank will operate under the Providence Bank name and will be headquartered in Rocky Mount, NC. It will have 10 full-service offices serving North Carolina communities, with a loan production office in New Bern.
With the deal, PB Financial will enter Carteret County, NC, with one branch to be ranked eighth with a 0.6% share of about $1.78 billion in total market deposits and Onslow County, NC, with three branches to be ranked fifth with an 8.7% share of roughly $2.05 billion in total market deposits, according to Market Intelligence data.
Ted Whitehurst will continue to serve as president and CEO of PB Financial and Providence Bank. Coastal President and CEO Richard Jefferson will remain in a senior-level position with the combined entity.
A member of Coastal's board will join PB Financial's board, and the remaining local Coastal board members will serve on a newly formed Coastal advisory board of Providence Bank.
Janney Montgomery Scott LLC was PB Financial's financial adviser, and Wyrick Robbins Yates & Ponton LLP served as the company's legal counsel. Burke Group was Coastal's financial adviser, and Ward and Smith PA served as the bank's legal counsel.
Use S&P Capital IQ Pro's branch analytics tools to compare market overlap. Create custom maps here.
