First Bancshares in Hattiesburg, Miss., has agreed to buy two banks in Alabama and Florida and it announced plans for a capital raise to fund the deals.
In its first deal, the $1.3 billion-asset holding company for The First will pay $31.1 million in cash for the $258 million-asset Iberville Bank in Plaquemine, La., according to a Friday news release. As part of the agreement, First Bancshares will hold 8% of the cash in escrow as a contingency for loan losses related to recent flooding in Louisiana. The acquisition is expected to close by the first quarter of 2017.
First Bancshares expects the Iberville deal will be accretive to earnings in 2018, after it records $6.6 million of merger-related costs.
Iberville Bank was founded in 1931 and is owned by the holding company A Wilbert's Sons Lumber and Shingle Co. in Plaquemine.
In its second deal, also announced on Friday, First Bancshares will acquire the $133 million-asset Gulf Coast Community Bank in Pensacola, Fla., for about $2.3 million in common stock. The Gulf Coast purchase is expected to be accretive to earnings in 2018 and it's expected to close by the first quarter.
First Bancshares on Friday also said it plans to raise about $63 million through the sale of about 3.5 million shares of preferred stock. The proceeds will be used to finance a portion of the Iberville acquisition, to support its capital ratios and for general corporate purposes.
Jones Walker was legal counsel to First Bancshares on both acquisitions and the capital raise. Keefe, Bruyette & Woods was financial adviser on the Iberville deal, Performance Trust Capital Partners advised it on the Gulf Coast deal and FIG Partners was senior placement agent on the capital raise.