First M&F's board decided that selling the company to Renasant (RNST) was the best way to help its patient shareholders cut their losses.

At least that's the view of Hugh Potts Jr., the Kosciusko, Miss., company's chairman and chief executive. Potts, who has led the $1.6 billion-asset company since 1994, said in an interview late last week that the $119 million price helps investors get close to what they put into First M&F (FMFC) before the financial crisis.

"It may have been asking too much to ask our investors to wait another five years for full restoration," Potts said. "Our board felt that recovery of 75% of the company's 2006 value, and 80% of the dividend, was fairly compelling."

It is a decision that many bank directors are undoubtedly facing, as interest rates remain low, loan demand is tepid and regulatory costs increase. Renasant's offer was roughly 119% of First M&F's tangible book value.

First M&F completed an impressive turnaround following a November 2009 regulatory order. The company is profitable again and seems to have resolved many of its past credit issues. Regulators removed the order last month.

Ultimately, it will be up to First M&F's investors to support or reject the board's view, and Potts says he is comfortable with that process. "We'll have a shareholder meeting and their vote will determine whether or not we made the right decision," he says.

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