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Miss. bank makes Alabama acquisition for $6.6M
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HATTIESBURG, Miss. (AP) - Mississippi’s First Bancshares is expanding further into Alabama, announcing Thursday that it will buy BCB Holding Co. of Mobile, Ala. for about $6.6 million in cash and stock.
At least 30 percent of the purchase will be paid for with newly issued First Bancshares stock. The company says it expects the acquisition to cut 2014 profits by $400,000, but add to profits in 2015. First Bancshares said it expects to cut 40 percent of BCB’s non-interest expenses by early 2015.
It’s the second acquisition in southwest Alabama for First Bancshares. The company bought the bankrupt holding company of First National Bank of Baldwin County in 2013. First Bancshares paid $3.3 million to buy the Baldwin bank, which had declared bankruptcy, winning despite a higher bid from an Arkansas bank. Using money it raised in a $20 million stock offering, First Bancshares also injected $18 million in new capital into the Alabama bank, which suffered heavy loan losses because of the downturn in coastal real estate values,
Like the Baldwin bank, Bay Bank had struggled with soured loans during the recession. As part of the deal, First Bancshares will pay off BCB’s debt and the money it received from the U.S. Treasury as part of the federal bank bailout.
The First earlier bought Mississippi coast branches that Hancock Holding Co. had to divest as part of its takeover of Whitney National Bank. After the Bay Bank takeover, First Bancshares says it will have 30 branches and $1 billion in assets across Mississippi, Alabama and Louisiana.
M. Ray Cole, President and CEO of First Bancshares, said that putting Bay Bank together with the earlier acquisition will improve The First’s market presence in the Mobile area. According to Federal Deposit Insurance Corp. records, the two banks combined will have $250 million in deposits in Alabama’s Mobile and Baldwin counties, making it the ninth-largest bank in the area with 2.7 percent of the market.
Southwest Alabama has been a big draw for Mississippi-based banks. A total of eight now do business there, including the four largest Mississippi-based banks.
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