NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) released a comment entitled “Comment on Home BancShares, Inc.’s Acquisition of Stonegate Bank,” that makes the following points:
- Home BancShares, Inc. (NASDAQ: HOMB) and Stonegate Bank (NASDAQ: SGBK), have announced an agreement whereby HOMB will acquire Stonegate Bank – pending regulatory and shareholder approval.
- Conway, Arkansas-based Home BancShares, Inc. is poised to cross the $10 billion in assets mark in the first quarter of 2017.
- Stonegate Bank, based in Pompano Beach, Florida, has approximately $3 billion in assets and, historically, has been a strong performer.
- The transaction is expected to close in the fourth quarter of 2017 and be valued at $778 million with $700 million in HOMB shares, $50 million in cash and approximately $29 million in SGBK’s stock options to be cashed out.
- HOMB’s Tier 1 risk-based capital ratio is projected to decrease moderately following the acquisition; however, KBRA expects solid internal capital generation will enable capital ratios to improve in subsequent periods.
- On March 21, 2017, KBRA assigned a senior unsecured debt rating of BBB, a subordinated debt rating of BBB-, and a short-term debt rating of K3 to Home BancShares, Inc.
- Stonegate bank does not carry a KBRA long-term rating, but does have a financial strength rating (FSR) of B (sound financial condition) on KBRA’s A+ through E FSR scale.
- The transaction is credit neutral in the near term.
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