First Bancshares (FBMS) in Hattiesburg, Miss., has raised $20 million to finance its purchase of a bankrupt Gulf Coast lender.

The company said Friday that it sold nearly 2 million shares of nonvoting preferred stock at $10.25 each. The preferred shares will automatically convert to common stock if shareholder approve the conversion at a May 23 meeting.

In January, First Bancshares agreed to buy the $185 million-asset First National Bank of Baldwin in Foley, Ala. First National planned to file for Chapter 11 bankruptcy as a condition of the merger.

"The offering was oversubscribed and was a vote of confidence by the investment community showing strong support for our company and its strategic plan," Ray Cole, the company's president and chief executive, said in a press release. The capital "will allow the company to continue to grow organically and will support the capital needs of the potential acquisition of First National Bank of Baldwin County."

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