Kroll Bond Rating Agency Releases Research Report “Seacoast Banking Corporation of Florida and Grand Bankshares, Inc. Merger Comment”

NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (KBRA) released a research report entitled “Seacoast Banking Corporation of Florida and Grand Bankshares, Inc. Merger Comment”.

Headquartered in Stuart, Florida, and with total assets of $3.1 billion as of year-end 2014, Seacoast Banking Corporation of Florida is a single-bank holding company with operations along the southeast coast and central region of Florida. SBCF has 46 offices in 15 counties and provides a broad range of community banking services to commercial, small business, and retail customers, offering a variety of transaction and savings deposit products, treasury management services, investment brokerage services, secured and unsecured loan products, including revolving credit facilities, letters of credit, and similar financial guarantees through its lead subsidiary, Seacoast National Bank. The Bank also provides trust and investment management services to retirement plans, corporations and individuals.

In the first quarter of 2015, Seacoast signed a definitive merger agreement to acquire Grand Bankshares, Inc. Grand will add three branches in Palm Beach County and approximately $208 million in assets, $184 million in deposits, and $127 million in gross loans to Seacoast’s balance sheet. Grand’s loan portfolio, consisting of 63% commercial real estate loans, is complementary to Seacoast’s portfolio. This acquisition, expected to close in the third quarter of 2015, will more than double SBCF’s position in Palm Beach County. With $208 million in assets as of year-end 2014, Grand Bankshares, Inc. is the holding company for Grand Bank & Trust of Florida. Grand commenced its operations in West Palm Beach, Florida, in 1999 to serve the community’s business and personal banking needs. As of third quarter 2014 data, KBRA’s Subscription Rating Service rated Grand Bankshares D on the financial strength rating (FSR) scale. Grand’s FSR is primarily attributable to weak asset quality, though is also negatively impacted by the institution’s high double leverage ratio.

In October of 2014, KBRA affirmed the senior unsecured debt rating of BBB- and the short-term rating of K3 for Seacoast Banking Corporation of Florida. In addition, KBRA affirmed the senior deposit rating of BBB and the short-term rating of K2 for Seacoast Banking Corporation of Florida’s subsidiary, Seacoast National Bank. The outlook on all ratings is stable. The ratings are supported by Seacoast National Bank’s much improved asset quality, strong capital levels, and healthy deposit base. The ratings are also reflective of the positive steps the Bank has taken to improve its financial strength and credit profile, including de-risking the overall loan portfolio and the disposition of problem assets. These strengths are balanced by remaining concerns surrounding the pace of economic recovery in SBCF’s geographic footprint as well as Seacoast’s relatively low profitability metrics. The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology, published on January 28, 2015. The ratings and supporting rationale are available at www.kbra.com.

Please use the following link to view the report: www.krollbondratings.com/show_report/2113

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Analytical Contacts:
Kroll Bond Rating Agency
Ashley Phillips, Associate
[email protected], (240) 394-4150
or
Marjan Riggi, Managing Director
[email protected], (646) 731-2354
or
Christopher Whalen, Senior Managing Director
[email protected], (646) 731-2366
or
Joseph Scott, Senior Director
[email protected], (646) 731-2438

Source: Kroll Bond Rating Agency

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