Bankers First Corp. of Augusta, Ga., will probably attract a host of suitors now that it has announced it is up for sale.
The $1.1 billion-asset institution, the state's largest thrift company, said Wednesday that it had been speaking with several interested parties since management was routed in a bitter proxy fight that lasted several months.
The thrift's market in north Georgia, particularly in the dynamic Columbia County, is the draw, analysts said.
"This is now a deposit-buying game, and Bankers First gives you some good deposits in the second-largest town in the state," said Christopher Marinac, research analyst at Interstate/Johnson Lane in Atlanta. "This is a very attractive area."
Those interested parties could include Synovus Financial Corp. of Columbus, Ga., SunTrust Banks Inc. and Bank South Corp. of Atlanta, and the North Carolina giants Wachovia Corp. of Winston-Salem and NationsBank Corp. of Charlotte, analysts said.
First Union Corp. of Charlotte was mentioned, but since it already has a dominant market share in Augusta, it's not as likely to be interested as some of the other potential suitors, analysts said. Synovus already has some ties with Bankers First, as it bought a subsidiary from the thrift several years ago.
While the thrift's management said in a press release that it had concluded the time is right to explore a sale, it was clear that the move was triggered primarily by the successful proxy challenge spearheaded by Mid-Atlantic Investors, a Columbia, S.C., firm that owns 9.4% of Bankers First stock.
"The shareholders have really spoken with a strong voice," said Jerry Shearer, managing partner of Mid-Atlantic. "It appears that the reaction from management is a desire to fulfill the shareholders' wishes."
Of the 83% of outstanding stock that was voted in the contest, 59% voted to seek a merger or sale.
On news of Bankers First's announcement, the company's stock jumped 50 cents to $29 on Wednesday, but was down 25 cents early Thursday. Trading volume on Wednesday was 756% heavier than its daily average during the past month.
To challenge the management of a well-regarded company like Bankers First - and more importantly to win the challenge - does not happen every day, analysts said.
"It's a little surprising in that management had done a decent job of bringing the bank back to profitability," said Benjamin C. Bishop, chairman of Allen C. Ewing & Co. of Jacksonville, Fla., "but their timetable was a bit different than the shareholders'."
H.M. "Monty" Osteen Jr., chairman and chief executive of Bankers First, has said in the past that the company wanted to build shareholder value by reducing nonperforming assets and real estate investments before moving to sell the thrift.
In the company's press release, Mr. Osteen said that this strategy has been "substantially achieved." This conclusion was reached at a meeting with the company's investment bankers on May 16 - six days after the annual shareholders meeting at which Mid-Atlantic's proposals were presented.
Mr. Shearer dismissed the notion that Bankers First would have sold without prompting from its shareholders.
"We have served as a catalyst and shareholder advocate," Mr. Shearer said. "Absent that catalyst and obvious shareholder support of our position, then this event would not be taking place today."
Mid-Atlantic achieved a clean sweep in its other proposals as well. Its director candidate, M. Jerry Garfinkle, was elected to the board with more votes than any of the incumbents, Mr. Shearer said.