Lafayette-based IberiaBank Corp. jumped into the Orlando, Florida, market by acquiring Old Florida Bancshares and its 14 locations in a stock deal valued at $259 million.
Old Florida, the largest community bank in the Orlando metro area, gives IberiaBank “an exceptional entrance vehicle” into that market, IberiaBank President and Chief Executive Officer Daryl G. Byrd said during a Monday conference call with stock analysts and investors.
The Orlando area is attractive for a number of reasons, including:
- A population base of 2.3 million people that is expected to reach 2.6 million in 2019
- An economy projected as one of the fastest-growing in the country
- A deep commercial and industrial client base.
Old Florida’s focus on small- to mid-market commercial and industrial customers, among other factors, means its branches are well-positioned to capitalize on that growth, Byrd said.
Old Florida had 229 employees and reported net income of $3.1 million for the quarter ending Sept. 30. Twelve of its locations are in the Orlando area and two are in Citrus County, Florida, about 70 miles north of Tampa, Florida.
IberiaBank expects an internal rate of return, or growth rate, of more than 20 percent on the acquisition. Old Florida had total assets of $1.4 billion and deposits of $1.2 billion as of Sept. 30.
The deal also solidifies IberiaBank’s Florida franchise, giving the firm “a meaningful presence” in the state’s six largest metro areas, Byrd said.
This is IberiaBank’s second move into Florida this month. IberiaBank previously announced the acquisition of Florida Bank Group Inc. and its 13 branches in a deal valued at $90.5 million. Florida Bank has eight offices in the Tampa area, three in Jacksonville, one each in Tallahassee and Sarasota.
IberiaBank has averaged two acquisitions a year for the past several years, but IberiaBank isn’t ruling out additional deals.
“We feel like we’re in the six major metropolitan markets at this point and feel very good about that,” Byrd said. “And there are other markets around the South that we continue to have a strong interest in, and so we’ll see how that plays out.”
The addition of Old Florida will give IberiaBank 78 locations in Florida. The deal lifts IberiaBank to the No. 16 spot in Florida, with $4.3 billion in deposits and 78 branches. Florida will account for 20 percent of IberiaBank’s deposits and 28 percent of its total loans.
IberiaBank said it expects to slash Old Florida’s expenses by about 30 percent within six months of closing the deal, which should be in the first quarter of 2015. But those savings don’t involve consolidating any of Old Florida’s offices.
The acquisition and conversion-related costs, including terminating leases, will be about $21.6 million on a pre-tax basis. Old Florida is expected to slightly lower earnings in 2015 and increase earnings per share by 2 percent in 2016 and 3 percent in 2017.
Follow Ted Griggs on Twitter @tedgriggsbr.