First Bancshares (FBMS) in Hattiesburg, Miss., has agreed to buy BCB Holding in Mobile, Ala.

The $941 million-asset First Bancshares will pay about $6.6 million for BCB. First Bancshares will also assume BCB's debt and preferred stock issued to the Treasury Department.

BHB, the parent of Bay Bank, has four branches and about $80 million in assets. The transaction is expected to close by June 30.

"We are extremely excited and look forward to welcoming Bay Bank to our team," Hoppy Cole, First Bancshares' president and chief executive, said in a press release. "We believe it is a great combination of two service oriented community banks and by joining forces, we will improve our market presence in the Mobile area."

First Bancshares expects to cut about 40% of annual pretax expenses at BHB, achieving the reductions by the first quarter of next year. The transaction is expected to be accretive by roughly 9% to First Bancshares' fully diluted earnings per share next year. The company also expects to incur $400,000 of merger-related costs.

The transaction is expected to dilute tangible book value per share by roughly 3%, though it should be earned back in less than three years.

Chaffe & Associates acted as First Bancshares' financial advisor; Jones Walker provided legal advice. National Capital was the lead investment banker for BCB, and Armbrecht Jackson acted as legal advisor.

First Bancshares raised capital last year to fund another Alabama acquisition. It bought the $185 million-asset First National Bank of Baldwin in Foley.

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