KBRA Comments on National Commerce Corporation’s Merger with Landmark Bancshares, Inc.
April 26 2018 - 12:36PM
Business Wire
Kroll Bond Rating Agency (KBRA) releases a comment on National
Commerce Corporation’s pending acquisition of Landmark Bancshares,
Inc. Birmingham, Alabama based National Commerce Corporation
(NASDAQ: NCOM) (“National Commerce” or “the Company”) announced a
definitive agreement to acquire Marietta, Georgia based Landmark
Bancshares, Inc. (“First Landmark”). Subsidiaries of the acquired
institution are expected to merge into NCOM’s subsidiary bank,
National Bank of Commerce (NBC), and to operate under the NBC brand
name. First Landmark represents roughly 18% of the Company’s total
asset base as of March 31, 2018. The estimated transaction value of
the Landmark acquisition is $115.2 million, with the transaction
expected to be ~95% stock and ~5% cash consideration, and an
anticipated close in the third quarter of 2018. The successful
integration of First Landmark is expected to significantly enhance
NCOM’s presence in the Atlanta MSA, resulting in ~$1 billion in
Atlanta assets proforma, which represents the second-largest MSA in
the Southeast by population. KBRA notes the cultural and operative
similarities of the recent acquisitive activity and views the
proposed bank purchase as credit neutral and in line with NCOM’s
expansion strategy. Adding comfort is the extensive acquisition and
integration experience of NCOM’s management team both at NCOM and
predecessor financial institutions.
In May of 2017, KBRA affirmed the ratings, including the senior
unsecured debt rating of BBB and subordinated debt rating of BBB-
for NCOM, as well as the senior unsecured debt rating of BBB+ for
its subsidiary, NBC. The Outlook on all long-term ratings is
Stable. Though KBRA does not currently rate Landmark Bancshares,
Inc. on a long-term basis, the company appears to have sound
financial metrics as evidenced by KBRA’s Subscription Rating
Service’s financial strength rating of B- for the bank
subsidiary.
The ratings are based on KBRA’s Global Bank and Bank Holding
Company Rating Methodology published on February 19,
2016.
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Europe
KBRA is a full service credit rating agency registered with the
U.S. Securities and Exchange Commission as an NRSRO. In addition,
KBRA is recognized by the National Association of Insurance
Commissioners as a Credit Rating Provider and a certified Credit
Rating Agency (CRA) by the European Securities and Markets
Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.
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KBRAAnalytical
Contacts:Leila Al-Bori, 646-731-2331Senior
Analystlalbori@kbra.comorJason Szelc, 301-969-3174Associate
Directorjszelc@kbra.comorJoseph Scott, 646-731-2438Managing
Directorjscott@kbra.com