Iberiabank Corp. in Lafayette, La., will enter the Atlanta market, agreeing to buy Georgia Commerce Bancshares.
The $15.5 billion-asset Iberia will pay $195 million in stock for the $1 billion-asset Georgia Commerce. The merger is expected to close in the first half of next year.
"With a strong economic recovery in progress, Atlanta is one of the fastest growing regions contiguous to our current footprint," Daryl Byrd, Iberia's president and chief executive, said in a press release Monday. "This is a market that our team knows very well and we believe we are entering this market at an opportune time."
Iberia said it expects to cut about 20% of Georgia Commerce's annual operating costs within six month of completing the deal. The company also forecast nearly $21 million in merger-related expenses. The transaction is expected to be 1.6% accretive to Iberia's fully diluted earnings per share in 2016 and about 5% accretive in 2017.
Iberia has been an aggressive acquirer this year. In February, the company agreed to buy First Private Holdings in Dallas. In October, it agreed to buy Old Florida Bancshares in a deal to enter Orlando, Fla.
Separately, Iberia provided information about its energy-based lending in an effort to settle investors who are nervous about banks in that business. The company said in a press release that energy loans made up 7.6% of total loans at Sept. 30, compared to 8.4% on March 31. Iberia added that roughly 90% of its total loan growth since the end of 2011 involved loans outside of the energy sector.
"We recognize that the dramatic fluctuation in energy prices over the last several years, combined with limited data regarding the banking industry's energy lending practices, has created a challenging environment in which to evaluate and differentiate investment decisions," Byrd said.
"Recent fluctuations in energy prices have also resulted in heightened institutional investor inquiry into our views of the energy lending business," he added. "As a highly seasoned and active participant serving energy clients' depository and capital market needs, we believe additional disclosure and insight into our company's energy lending practices and condition may assist in the investment community's risk management review process. Our historical experiences, industry knowledge, superior credit quality, and solid financial condition provide a unique perspective during these turbulent times."