Commerce Bancshares to Acquire FineMark for $5.85B, 54.7% Premium

Commerce Bancshares, Inc. has announced a significant strategic move by agreeing to acquire FineMark National Bank & Trust, a Florida-based financial institution, for 5.85 billion dollars. This acquisition, which is subject to regulatory approvals and other customary closing conditions, is expected to be completed by January 1, 2024. The deal involves a full stock transaction, where FineMark shareholders will receive 0.69 shares of Commerce Bancshares stock for each share of FineMark stock they own. This transaction represents a 54.7% premium over FineMark's closing price as of the last trading day before the announcement.

FineMark, established in 2007, operates through 13 branches in Florida, Arizona, and South Carolina, offering a wide range of banking and non-banking services. As of March 31, the bank's asset size reached 4 billion dollars, with its trust and investment business managing approximately 7.7 billion dollars in assets. The acquisition is expected to significantly enhance Commerce Bancshares' presence in the Florida market, leveraging FineMark's strong community banking roots and extensive branch network. The combined entity will have a more robust footprint in the region, allowing for enhanced service offerings and improved customer experiences.

This deal is part of a broader trend in the banking industry, where larger institutions are seeking to expand their market share and enhance their competitive position through mergers and acquisitions. The increasing costs of technology and regulatory compliance are driving banks to pursue scale through consolidation. The relaxation of regulatory oversight under the Trump administration has also created favorable conditions for larger-scale transactions. The acquisition is expected to create significant value for both sets of shareholders. Commerce Bancshares will benefit from FineMark's established customer base and experienced management team, while FineMark shareholders will gain access to the broader resources and capabilities of a larger financial institution. The transaction is also expected to generate cost synergies as the two banks integrate their operations and eliminate redundancies.

Commerce Bancshares, headquartered in Kansas City, Missouri, will see its asset base grow to over 36 billion dollars and its managed wealth assets to over 82 billion dollars post-merger. This strategic move is expected to accelerate growth, expand the business scope, and create greater value for the combined entity. Keefe, Bruyette & Woods served as the financial advisor to Commerce Bancshares, while Piper Sandler provided advisory services to FineMark. The transaction is expected to be accretive to earnings in the first full year following the closing, with further benefits anticipated in subsequent years as the integration process is completed.