Regions Financial Corp. moved to strengthen its franchise in northwest Georgia with a definitive agreement to acquire an $89 million-asset thrift.

Regions, based in Birmingham, Ala., said Monday it would pay $15.8 million, or 1.3 times book value, for First Federal Bank of Northwest Georgia. First Federal, with $76 million in deposits, is headquartered in Cedartown and has a branch in nearby Rockmart.

Noting the close proximity of these two towns to the Alabama border, Regions assistant comptroller Ronald C. Jackson said his company viewed the deal as "a natural extension of our Alabama market."

Cedartown and Rockmart are also located close to Rome and Cartersville, two northwest Georgia cities where Regions has acquired banks.

"We've gotten some good results out of those banks, and we think it's a good area to be in," Mr. Jackson said. "We like the prospects for future growth in northwest Georgia."

"We are delighted to join First Federal in serving the northwest Georgia communities," said Regions chairman and chief executive officer J. Stanley Mackin.

When the First Federal deal is consummated early next year, Regions will have more than $1 billion in Georgia assets - in Atlanta, Columbus, Rome, Dalton, Cartersville, Cedartown, and Rockmart. The company currently has $13.5 billion in total assets, spread among banks in Alabama, Florida, Tennessee, Louisiana, and Georgia.

J.C. Bradford & Co. analyst Henry J. Coffey Jr. compared Regions' strategy in Georgia with its entry into Louisiana. In both cases, Regions made small, targeted acquisitions instead of large, dilutive deals, and then slowly built its presence in healthy markets.

"It's worked well for them in the past," said Mr. Coffey, who is based in Nashville. "It's a strategy of going in the back door and avoiding the really competitive markets."

Regions did purchase two community banks in the highly competitive Atlanta market in August. But Regions has said it would like to focus on niche opportunities in the Atlanta suburbs rather than attempt to build a metro-wide franchise.

The acquisition of First Federal is still subject to approval by regulators and the thrift's shareholders. The agreement calls for a tax- free exchange of stock at the ratio of one share of First Federal for 1.293 shares of Regions.

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