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Bank of the Ozarks-C1 Financial Deal Gets Shareholders Nod

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Bank of the Ozarks, Inc.’s agreement to buy St. Petersburg, FL-based C1 Financial, Inc. received approval from the latter’s shareholders at a special meeting of shareholders held on March 3.

More than 99.7% of the votes cast were in favor of approval of the merger agreement, which represented around 83.51% of the outstanding shares of C1 Financial’s stock.

The deal, which was announced in November 2015, is projected to close late in the first quarter or the second quarter of 2016.


The all-stock deal, which marked Bank of the Ozarks’ 15th acquisition since March 2010, was valued at roughly $402.5 million or $25 per C1 Financial share.

Upon closure of the deal, Trevor Burgess, President and Chief Executive Officer of C1 Financial, will serve as the Chief Innovation Officer of Bank of the Ozarks as well as President of its Florida operations.

Moreover, upon closing, the deal is projected to be immediately accretive to Bank of the Ozarks’ book value per common share and its tangible book value per common share. Further, the transaction is expected to be accretive to Bank of the Ozarks’ earnings per share in a range of 2–4 cents (including transaction cost) and 7–10 cents for the first year and second year after completion, respectively.

With C1 Financial operating 32 full-service branches in Florida, the deal will help Bank of the Ozarks strengthen its presence in the region. The latter will now own 10 offices in the state.

Bank of the Ozarks’ Acquisition Spree

In Oct 2015, the company had announced a deal to acquire Community & Southern Holdings, Inc. in an all-stock transaction valued at nearly $799.6 million. Earlier in 2015, the company had closed two transactions – Intervest Bancshares Corporation and Bank of the Carolinas Corporation.

Moreover, over the years, Bank of the Ozarks has shown a strong appetite for inorganic growth. Notably, since 2010, the company has completed 13 transactions, including 7 FDIC-assisted deals. All these deals have significantly contributed toward the company’s profitability over the years.

Given its strong balance sheet position, Bank of the Ozarks is expected to focus on M&As across the country where it does not have offices at present. So, we believe the company will continue with more such opportunistic transactions.

In recent deals, Northern Trust Corporation (NTRS - Free Report) is set to acquire the investment management business of Aurora Investment Management L.L.C., a unit of the French fund management giant Natixis Global Asset Management. Also, Citigroup Inc. (C - Free Report) is set to acquire U.S. co-brand credit card portfolio of Costco Wholesale Corporation from American Express Company.

While Bank of the Ozarks holds a Zacks Rank #2 (Buy), C1 Financial carries a Zacks Rank #3 (Hold).

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