Moving to dominate Louisiana, New Orleans-based Hibernia Corp. said Tuesday it had agreed to purchase CM Bank Holding Co. for $201.7 million in cash.
The deal - Hibernia's second of the week - would place it neck-and-neck with First Commerce Corp., now the state's largest banking company. Each company would hold 17% of Louisiana's deposits.
The latest acquisition would markedly bolster Hibernia's position in the southwestern part of the state. CM Bank Holding, based in the southwestern community of Lake Charles, is the parent of Calcasieu Marine National Bank, the largest remaining independent bank in the state.
Calcasieu, with assets of $744 million, has 21 offices in four parishes: Calcasieu, Jefferson Davis, Allen, and Cameron.
Earlier this week, Hibernia agreed to buy St. Bernard Bank and Trust, a $260 million-asset company in the New Orleans suburbs.
Following the CM merger, A. Hartie Spence, president of Calcasieu Marine, is to serve as Hibernia's Lake Charles regional president.
Hibernia president and CEO Stephen A. Hansel said the deal is strategically important because it will help fulfill Hibernia's goal of moving back into the Lake Charles region, where Calcasieu Marine has seven offices.
Hibernia operated a full-service office in Lake Charles from February 1991 to April 1992, when it was closed as part of a reorganization.
CM was auctioned to several bidders as part of an effort to get the best price. Analysts and banking sources declined to disclose who the other bidders were, but said they were from among smaller regional banks in Louisiana and neighboring states.
Hibernia is paying approximately 1.8 times book value for CM, or $193.52 per share.
The agreement, which is subject to approval by regulators and CM shareholders, is expected to be completed in the fourth quarter.
Analysts noted that Louisiana remains a fragmented market and that more consolidation is likely to occur this year.
CM Bank Holding chairman William B. Lawton, whose family owns some 80% of the company's stock, said in a phone conference Tuesday: "There was growing uneasiness within the family concerning our ability to compete with majors in the market."
With the completion of the merger, Hibernia would have approximately $8.5 billion in assets and 187 banking locations serving 29 parishes and 78 cities.
Analysts said the acquisition was in line with Hibernia's goal of expanding into markets in Louisiana where it does not have a presence. "Their near-term goal is to expand their franchise and build products," said Frank W. Anderson, a banking analyst with Stephens Inc.