First Alabama Bancshares Inc. announced an expansion of its Louisiana foothold Wednesday with an agreement to acquire Guaranty Bancorp of Baton Rouge.
First Alabama, which has $8.1 billion of assets, said it would acquire Guaranty Bancorp for about $28 million, or 2.2 times book value. Guaranty is the holding company for Guaranty Bank and Trust Co. of Baton Rouge, which has $185 million in assets and six offices in the Louisiana capital.
Closing Expected in 1994
The stock price of the Birmingham, Ala.-based company closed at $32.625, up 62.5 cents, on the news. The deal, which is subject to regulatory and shareholder approvals, is expected to close in 1994's first half.
First Alabama entered Louisiana this year with the acquisition of Secor Bank, a deal expected to close by yearend. Although Secor is also based in Birmingham, the $1.8 billion-asset thrift has more than half its deposits in Louisiana, mostly in New Orleans and around Monroe in northern Louisiana.
A combination of Secor's Louisiana operations and Guaranty Bancorp would give First Alabama 21 offices and nearly $900 million in deposits in the Pelican State. First Alabama will remain a small player in the market, however. Louisiana is dominated by First Commerce Corp., New Orleans; Hibernia Corp., Now Orleans; and Premier Bancorp, Baton Rouge.
First Alabama chairman and chief executive J. Stanley Mackin said his company, which also operates banks in Alabama, Florida, and Tennessee, hopes to expand further in Louisiana.
Finding a Snug Fit
"I don't know that we want to be the size of Hibernia or people like that," Mr. Mackin said. "But we do want to run a high-quality, profitable organization there."
Mr. Mackin said Guaranty Bancorp, with its expertise in small-business lending, would complement Secor's retail, deposit-driven franchise. "This fits like a glove," he said.
Guaranty Bancorp is also highly profitable. For the first nine months, it earned a return on assets of 1.47% and return on equity of 22.65%.