BB&T Corp., the ninth-largest U.S. bank by deposits, agreed to buy BankAtlantic Bancorp Inc.’s retail-lending unit, adding about $2.1 billion in loans and $3.3 billion in deposits.
BB&T may pay as much as $301 million, or a 9 percent deposit premium, above the net asset value of BankAtlantic, the Winston-Salem, North Carolina-based bank said today in a statement. The deal excludes all of Fort Lauderdale, Florida-based BankAtlantic’s non-performing assets, according to the statement.
“They’re picking up a core deposit base without the problems that often come with it,” Gerard Cassidy, a Portland, Maine-based analyst with RBC Capital Markets, who rates BB&T “outperform,” said in a phone interview. “That is the No. 1 positive for the transaction.”
The acquisition will help BB&T expand its retail business in Florida by adding 78 branches and boosting its share of the Miami market, the company said in the statement. The lender said it expects the transaction to be accretive to earnings per share in 2012. The deal is pending approval by state and federal regulators, BB&T said.
BB&T has more than 1,800 locations in 12 states and Washington, D.C., and has acquired more than 35 community banks and thrifts since 1995, according to the bank’s website. The firm completed the purchase of Coastal Financial Corp. in 2007 for $370 million in stock, according to the website. Chief Executive Officer Kelly King, 63, told investors Oct. 20 that acquisitions ranked third among how the company would use its capital, behind “organic growth” and dividends.
‘Compelling Strategic Expansion’
“This acquisition of BankAtlantic is a compelling strategic expansion into important long-term markets in southeast Florida,” King said in the statement. The purchase “is accretive to earnings per share and comfortably exceeds our internal rate of return objective.”
BankAtlantic said last week that it had been notified by the New York Stock Exchange that its total market capitalization was below the $50 million requirement for listed companies. The lender said it planned to fix the deficiency.
BB&T fell 2.4 percent to $22.84 at 11:26 a.m. in New York, compared with a 3.4 percent drop for the 81-company Standard & Poor’s 500 Financials Index. BankAtlantic more than doubled to $5.18.