Regions Financial Corp., looking to expand its presence in metro Atlanta, said it has agreed to acquire First Bankshares for $19 million in stock, or 2.2 times book value.
First Bankshares is the parent company of $106 million-asset First Bank of Georgia, which is based in Atlanta and has three offices there.
Regions bought two banks in Atlanta earlier this year and combined them into Regions Bank of Atlanta, with $253 million of assets. The company has $4.2 billion of assets in the state.
The deal "is a very important fit into our strategy in the Atlanta area," said J. Stanley Mackin, Regions' chairman and chief executive officer. "It's in an extremely good area."
Under terms of the agreement, Regions will exchange 0.32 share of its common stock for each share of First Bankshares.
The merger is expected to be completed in the second quarter of 1997, pending regulatory and shareholder approval.
Birmingham, Ala.-based Regions, with $18.7 billion in total assets, has spent five years buying up smaller banking operations throughout the Southeast.
Regions has added more than $5 billion of assets through acquisitions in the last year alone.
In March, Regions completed its biggest deal of late, buying $3.1 billion-asset First National Bancorp of Gainesville, Ga. The purchase gave Regions entree into northern Georgia and a greater presence in Florida.
Also this year, the company expanded in Louisiana, adding about $2.4 billion of assets with the purchases of Delta Bank and Trust Co. in Belle Chasse, and American Bank and Trust Co. in Houma.
The bank has four more deals pending in Georgia, Florida, and Louisiana. When these transactions close, Regions will add on another $1 billion of assets.
In all, Regions operates more than 370 banking offices in Alabama, Florida, Georgia, Louisiana, and Tennessee. Though it is most dominant in Alabama's retail banking market, it is emerging as a strong player in other regional markets, particularly in Georgia and Louisiana.
"Regions has been the most active of the three big Alabama bank holding companies in the last year," said Kenneth Hemauer, a banking analyst with Robert W. Baird & Co. Amsouth Bancorp. and SouthTrust Corp. are Regions' hometown rivals.
In the meantime, Regions continues to troll for new deals. "We are continuing to look at other opportunities in the (Atlanta) metropolitan area," Mr. Mackin said.