Hibernia Corp. of New Orleans said Wednesday that it would acquire Thibodaux, La.-based ArgentBank in a tax-free pooling of interest valued at $190 million.
ArgentBank, with $760 million of assets, would expand Hibernia's coverage of coastal and southeast Louisiana.
The deal and three others pending would boost Hibernia's assets to $10.8 billion and its market share in Louisiana to 20% of deposits and 21% of loans.
ArgentBank shareholders would receive 2.04 shares of Hibernia stock for each share of ArgentBank, or about $29.07 per share.
Shares of ArgentBank rocketed 21%, to $27.25, by midafternoon Wednesday on the American Stock Exchange.
Hibernia's shares fell 25 cents, to $14.06.
Hibernia said ArgentBank's strong profitability, loan and deposit growth, and asset quality make the deal financially compelling.
"ArgentBank has built an excellent franchise by emphasizing customer service in everything it does," said Stephen A. Hansel, Hibernia's president and chief executive officer.
"Hibernia will continue that tradition of service and work hard to help the region grow and prosper."
Michael Granger, a bank analyst at Fox-Pitt Kelton in New York, said the deal is a continuation of a strategy Hibernia has pursued for the last three or four years to expand its franchise in Louisiana. Buying ArgentBank would put Hibernia "in a stronger market-share position in the southeastern corner of the state."
The price, 2.7 times ArgentBank's book value, may sound high in historical terms but is "in line with recent transactions" Mr. Granger said.
ArgentBank, he said, is one of the largest remaining commercial banks in the state, after Hibernia, First Commerce Corp., and Whitney Holding Corp. of New Orleans.
After the merger, Randall E. Howard, president of ArgentBank, would be Hibernia's regional chairman for southeast Louisiana, with initial responsibility for all of ArgentBank's current operations.
The merger, subject to approvals by regulators and by shareholders of ArgentBank, is expected to close by yearend.
Hibernia is awaiting approval of mergers with $105 million-asset Northwest Bancshares of Louisiana Inc. and $136 million-asset Executive Bancshares and $117 million-asset Unicorp Bancshares, both in Texas.
