New Orleans-based Whitney Holding Corp. plans to buy a small state-chartered Alabama bank in a stock deal valued at about $40 million.
The $6.2 billion-asset Whitney said Tuesday that it would buy Prattville Financial Services Corp., which operates the $170 million-asset Bank of Prattville. The deal is expected to close in the fourth quarter.
The companies said that though they have not settled on a share-for-share figure, the total price of the pooling-of-interests transaction would not exceed $40.5 million, 1.8 times Prattville's book value.
Bank of Prattville would be merged into Whitney National Bank, one of Whitney Holding's two banks. (The other is Bank of Houston.) Whitney operates 118 branches in five states along the Gulf Coast.
Most of Whitney's Alabama branches are in Mobile, which is in the southwestern corner of the state. The four Bank of Prattville branches are about 170 miles northeast, in suburban Autauga County, nearMontgomery, the state capital, in south-central Alabama.
Michael Granger, an analyst with J.P. Morgan Securities Inc. in New York, found it surprising that Whitney was buying so far from the coast, since it has been concentrating on markets along coast Interstate 10. The deal is "a little out of the range we would expect from them," he said.
But William L. Marks, Whitney's chairman and chief executive officer, said he is impressed with Prattville's solid market. "When the economy does go down, it's still a good market," he said.
With a loan-to-deposit ratio of about 60%, the Prattville bank would be a "good funding source" for Whitney's Alabama branches, Mr. Marks said.
A $4.1 billion-asset California banking company said Wednesday that it plans to buy a business that specializes in financing dentists and veterinarians.Palo Alto-based Greater Bay Bancorp said it would pay up to $12.5 million for $170 million-asset Matsco Cos. of Emeryville, Calif. Privately held Matsco offers leases and loans to dentists and veterinarians to fund start-ups and expansions, as well as operating loans and retirement planning.
The deal, which is expected to close in the fourth quarter, is structured so that Greater Bay would pay Matsco $6.5 million in cash up front and up to $6 million over five years, depending on the company's earnings.
- Katie Kuehner-Hebert