Magazine article American Banker

Seacoast Sticks to Growth Plan in Face of Investor Criticism

Magazine article American Banker

Seacoast Sticks to Growth Plan in Face of Investor Criticism

Article excerpt

Byline: Allison Prang

Seacoast Banking Corp. of Florida in Stuart remains committed to working on its long game even as its biggest investor presses management to consider selling.

The $4.5 billion-asset company recently agreed to buy GulfShore Bancshares, choosing to enter Tampa, Fla., via acquisition rather than by hiring lenders and opening branches. The deal is Seacoast's third since October 2015.

Over that time, Seacoast's biggest investors -- CapGen Capital and Basswood Capital Management -- have indicated a preference to see the company sell itself. Basswood reached a truce with Seacoast earlier this year that provided the investor with a nonvoting board seat; the agreement is set to expire on Nov. 30, but it can be extended.

Dennis Hudson, the company's chief executive, said an eventual sale is possible, although he is intent on building value for now.

"We're just focused on growing," Hudson said in an interview. "As we continue to grow profitably and improve our performance, it obviously continues to push up our valuation. That's what we're for."

Industry observers typically view acquisitions as a bank's way of signaling a preference to be buyers rather than sellers. Still, management teams often discuss a willingness to entertain a sale if doing so is in the best interest of their company's shareholders.

Florida, meanwhile, continues to have a fair amount of bank M&A, based on data from S&P Global Market Intelligence. Eleven banks in the state have announced plans to sell this year, including Giant Holdings in Fort Lauderdale, which agreed on Monday to sell itself to Home BancShares in Conway, Ark. Last year, 20 Florida banks found buyers.

Some shareholders -- especially those that bought in after the bigger funds invested -- might be surprised that Seacoast announced another deal, said Joseph Fenech, an analyst at Hovde Group. …

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