RBC snaps up ANB to expand its Network in US Southeast

Strengthening its network of branch offices in three Southeastern states, a well-known Canadian financial powerhouse Royal Bank of Canada on Thursday announced its plans to acquire Birmingham-based Alabama National BanCorporation (ANB).

The two companies yesterday entered into a definitive merger agreement, under which Royal Bank of Canada will acquire ANB, a bank holding company in Alabama, Florida and Georgia, and about 100 branch offices it owns for $1.6 billion in cash and stock.

As per the terms of the deal, shareholders of publicly traded ANB will receive $80 a share in cash, stock or a combination of each that represents a 51% premium to Wednesday's closing price of $53.12 for ANB shares.

"We are continuing to pursue investments that will grow our business in high growth markets and bring diverse service offerings and capabilities to new and existing customers," RBC Centura Chairman and Chief Executive Scott Custer said in a statement.

The deal will give RBC Centura 45 additional banking locations in Alabama, 45 in Florida and 13 in Georgia, giving nearly two-fold increase in RBC Centura's locations in Alabama, three-fold in Florida and adding to its presence in Georgia, bringing the total of locations to 85 in Alabama, 89 in Florida and 68 in Georgia.

"This acquisition reflects RBC's stated approach to expand strategically in the U.S.," said Custer.

The recent purchase is RBC’s largest acquisition in six years and one of its biggest ever after it acquired Centura Banks for $2.2-billion in 2001. The recent deal also marks RBC Centura's third acquisition in the past 13 months.

Last year in August, RBC Centura announced its plans to acquire Atlanta-based Flag Financial Corp. in a $456 million deal, while this year in March the company declared it would purchase 39 branches in Alabama from AmSouth Bank.

The transaction, which consists half of cash and half of RBC Centura shares, is expected to close early next year if it does not face any hurdles. Once the deal matures, ANB will become a subsidiary of RBC Centura Banks Inc., the largest bank with headquarters in the Triangle.

Royal Bank of Canada shares fell 4 cents to C$53.96 at 4:10 p.m. on Wednesday at the Toronto Stock Exchange, while Alabama National jumped $23.98, or 45 percent, to close at $77.10 on the NASDAQ Stock Market.

Alabama National operates 11 bank units with 103 banking centers, eight mortgage and loan offices and 124 automated teller machines. As of June 30, the bank has $7.9 billion in assets, deposit balances of $5.8 billion and loans of $5.7 billion. Profit rose 20 percent last year to $79.8 million.