The only two banking companies based in Shreveport, La., have called off their acquisition deal after the buyer failed to raise enough money in a stock offering to fund the purchase.
Home Federal Bancorp Inc. of Louisiana, a mutual holding company, had intended to use the proceeds of a second-step conversion to acquire the $121 million-asset First Louisiana Bancshares Inc. for $23.7 million in cash and stock. But Home Federal said late Thursday that weak demand for bank and thrift stocks had forced it to terminate its conversion plan, and that, as a result, the companies mutually agreed to call off the deal they had announced in December.
"Market conditions for bank and thrift stocks have changed significantly since we began the stock offering process eight months ago," Daniel R. Herndon, Home Federal's president and chief executive officer, said in a press release. "The ongoing problems in the residential mortgage lending market continue to depress the securities market for most financial institutions, which adversely affected our ability to complete the stock offering at the current pricing and valuation ratios."
Home Federal said orders for its stock would be returned to investors with interest.
After the acquisition Home Federal would have had $250 million of assets.
