MidSouth Bank NA has agreed to purchase all the assets of First Louisiana National Bank in a deal to be funded exclusively through cash and stock.
Through the acquisition, which was announced early Tuesday morning, MidSouth (AMEX: MSL) will pay $11.5 million in cash and 725,000 shares of its common stock, which traded at $10.75 per share as of mid afternoon. The deal is expected to close before the end of the year and is subject to shareholder and regulatory approvals.
“First Louisiana National Bank is a healthy bank with a strong consumer market franchise,” said MidSouth Bank President and CEO Rusty Cloutier in a statement. “We are confident there are tremendous opportunities to increase lending in St. Martin Parish, by leveraging access to MidSouth’s additional products and services, supported by a more technologically advanced banking platform and a much larger network of retail banking centers and ATMs.”
According to Cloutier, MidSouth expects to grow to exceed $1.4 billion in assets by the end of 2011. The bank, which is owned by MidSouth Bancorp Inc., had assets of $1.2 billion at the end of the July, 39 branch locations across both Louisiana and Texas and over 50 ATM.
MidSouth’s purchase of First Louisiana’s three banking branches is just one of several transactions its engaged in this year. Just last week MidSouth announced its plans to purchase the sole brach of Beacon Federal Bancorp Inc. of Tyler, Texas. Through the deal, which is also expected to close at year’s end, MidSouth bought $26 million in loans and assumed $77 million in deposits at about a 4 percent premium. MidSouth also agreed to assume $70 million in loans and $164 million in deposits from Jefferson Bank in late July.
Just last week MidSouth, which is based in Lafayette, La., was selected to participate in the U.S. Treasury Department’s Small Business Lending Fund initiative. The aim of the $30 billion fund, created through the Small Business Jobs Act signed into federal law last year, was to spur borrowing to small businesses at low rates in order to encourage job creation. Just last week the fund extended $418 million to community banks across the country.