Deposit Guaranty Corp. moved to expand its presence in Louisiana last week with a definitive agreement to acquire Metairie-based Jefferson Guaranty Bancorp.
Deposit Guaranty, based in Jackson, Miss., said last Friday that it would pay $50.6 million in cash and stock for Jefferson Guaranty, or 2.3 times book value. Jefferson Guaranty has $303 million of assets and 11 offices in the southern suburbs of metropolitan New Orleans.
Deposit Guaranty, which has $6 billion of assets, has acquired five community banks in Louisiana since February 1990 - in Shreveport, Monroe, Hammond, Gonzales, and Denham Springs. After absorbing Jefferson Guaranty, it will have $1.7 billion of assets in the Pelican State.
"They're slowly building a sizable franchise in Louisiana," said analyst Hope R. Willard of J.C. Bradford & Co. in Nashville.
Under terms of the agreement, Jefferson Guaranty stockholders can choose to exchange each of their shares for either $29 in cash or 0.637363 share of Deposit Guaranty common. Deposit Guaranty said its shares would constitute at least 55% of the acquisition price.
The transaction, to be accounted for as a purchase, will be a tax-free exchange and is subject to the approval of Jefferson Guaranty shareholders and regulatory agencies.