Regions Financial Corp. on Friday moved to strengthen its Georgia franchise with a definitive agreement to buy Allied Bankshares for $136.3 million.

The deal for the $562 million-asset community bank, based in Thomson, Ga., exemplifies the fill-in transactions that have dominated the bank merger scene this year.

"The big linebackers and tackles have left the field, and now the flankers and the defense backs are running around making the plays," said Anthony R. Davis, a bank analyst at Dean Witter Reynolds Inc.

Regions - which based in Birmingham, Ala., and has $17.5 billion in assets- has been methodically bagging smaller quarry over the past four years. With its latest catch, Regions has five deals pending - two in Georgia, two in Louisiana, and one in Florida. Taken together, they would boost its assets to $18.8 billion.

The deal for Allied would give Regions a strong presence in rural eastern Georgia and would bring its total assets in the state to $4.6 billion. The tab - twice Allied's book value, or 15 times annualized 1996 earnings - was in line with prices Regions has struck on other recent deals.

Allied's stock fell on the announcement, underscoring how many target banks already have an acquisition premium built into their prices.

Regions agreed to buy Allied in a stock swap that provided $10.75 a share for Allied shareholders, which was below Allied's Thursday closing price of $11.25 a share. On Friday morning, following the buyout announcement, it fell into the $10 range.

Allied's stock had run as high as $13 a share in mid-May on takeover speculation, from $10.50 a share in April.

Regions' shares closed Friday's trading up/down TK to TK. Allied's stock closed up/down TK to TK.

"It does make you think that perhaps sellers need to readjust their expectations," said analyst John A. Pandtle, with the Robinson-Humphrey Co. in Atlanta. "The market has gotten pretty efficient at pricing these stocks."

A similar situation, where the acquisition offer came in under the market price, occurred earlier this year when Miami's Chase Federal Bank agreed to be bought by NationsBank Corp. It also occurred last year when Firstier Financial Inc. accepted an offer from First Bank System Inc.

Allied's chief financial officer, Ben O. Howell Jr., pointed out that his bank's stock is thinly traded, which magnifies price swings. He said the price Regions paid for Allied's tangible book - subtracting its excess capital - was closer to 250% of book.

Allied chairman and CEO Boone A. Knox said he considered Regions' buyout offer "fair." He also said Regions, as an out-of-market acquirer, would prove less "disruptive" to Allied's employees and customers.

Regions comptroller Robert P. Houston said his bank would cut Allied's annual expense base by a relatively low 15%. He said the deal, although insignificant to Regions' overall financial performance, would break even in the first year and would contribute to earnings thereafter.

Regions did not employ an investment banker during the negotiations with Allied, which utilized the services of Atlanta-based Financial Consulting Associates Inc.

Mr. Knox said he spent two-and-a-half months negotiating with Regions at the suggestion of Financial Consulting principal Jon Burke, a former bank analyst with Robinson-Humphrey.

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