Iberiabank Corp. (IBKC) in Lafayette, La., has agreed to buy Teche Holding (TSH) in New Iberia, La.
Iberiabank will pay $161 million in stock, or $72.16 a share, to the $857 million-asset Teche. The transaction, priced at 1.71 times Teche's tangible book value, is expected to close in the second quarter.
"This combination is consistent with our stated efforts to improve our operating efficiency, appropriately deploy our capital, and enhance shareholder returns," Daryl Byrd, the $13.1 billion-asset Iberiabank's president and chief executive, said in a press release.
"Teche and Iberiabank share a common heritage," Byrd added. "Our organizations were started only 30 miles apart as mutual thrift institutions. Each of us converted to stock form and subsequently to commercial bank charters... Our respective holding companies were formed less than two weeks apart and our initial public offerings were also separated by less than two weeks."
Teche has $686 million in loans and $651 million in deposits. Nonperforming assets make up 0.74% of total assets.
Iberiabank said it expects to reduce annual expenses at Teche by more than 50%, which the cuts taking place by the first quarter of next year. The transaction is expected to be accretive to Iberiabank's fully diluted earnings per share by roughly 6%, excluding $22 million in pretax acquisition and conversion related costs.
The transaction is expected to dilute Iberiabank's tangible book value per share by roughly 2.1%, with the company expecting to earn the dilution back within four years.
Teche was advised by Sheshunoff & Co. and Spidi & Fisch. Iberiabank was advised by Keefe, Bruyette & Woods and Jones Walker.