The First Bancshares, Inc. (NASDAQ: FBMS) (“First Bancshares” or
“the Company”), holding company for The First, A National Banking
Association, (“The First”) announced today the signing of a Stock
Purchase Agreement with A. Wilbert’s Sons Lumber and Shingle
Company (“A. Wilbert’s Sons”), parent company of Iberville Bank,
Plaquemine, Louisiana, under which First Bancshares has agreed to
acquire 100% of the common stock of Iberville Bank in an all-cash
transaction. The Company also announced today the signing of an
Agreement and Plan of Merger under which it has agreed to acquire
Gulf Coast Community Bank (“GCCB”), Pensacola, Florida, in an
all-stock transaction. In addition, the Company entered into
Securities Purchase Agreements (“SPAs”) with a limited number of
institutional and other accredited investors, including certain
directors of the Company (collectively the “Purchasers”) to sell a
total of 3,563,380 shares of mandatorily convertible
non-cumulative, non-voting, perpetual Preferred Stock, Series E,
$1.00 par value (the “Series E Preferred Stock”) at a price of
$17.75 per share, for aggregate gross proceeds of $63.25
million.
Iberville Bank
Transaction
Under the terms of the Stock Purchase Agreement, First
Bancshares will pay A. Wilbert’s Sons a total of $31.1 million in
cash. Approximately 8% of the purchase price payable to A.
Wilbert’s Sons is being held in escrow as contingency for
flood-related loan losses in the event losses occur due to recent
flooding in Iberville Bank’s market area.
At June 30, 2016, Iberville Bank had approximately $258.5
million in assets, $140.8 million in net loans, $230.6 million in
deposits and $26.2 million in stockholder’s equity. Iberville Bank
serves the Baton Rouge, LA area through 10 locations operating in
Addis, Baton Rouge, Denham Springs, Pierre Part, Plaquemine,
Plattenville, Port Allen, Prairieville, Saint Gabriel and White
Castle, Louisiana. The transaction will significantly increase the
combined banks market share in the Baton Rouge area. Additional
information is available on the Iberville Bank’s website:
www.ibervillebank.com.
The Stock Purchase Agreement has been approved by the Board of
Directors of First Bancshares and A. Wilbert’s Sons. Closing of the
transaction, which is expected to occur late in the fourth quarter
of 2016 or early in the first quarter of 2017, is subject to
customary conditions, including regulatory approval and approval by
the shareholders of A. Wilbert’s Sons.
First Bancshares currently estimates annual pre-tax expense
reductions associated with the transaction will be approximately
40% of Iberville Bank’s annual non-interest expenses. Assuming the
transaction is completed in the first quarter of 2017, the expense
savings are estimated to be fully achieved by the end of 2017. The
transaction is expected to be accretive in 2018, the first full
year of combined operations. Estimated acquisition and conversion
related costs are approximately $6.6 million on a pre-tax
basis.
The transaction is expected to have an earnback period of
approximately 4 years from the completion of the transaction. The
internal rate of return for the transaction is projected to be
greater than 25% which is well above First Bancshares’ estimated
cost of capital.
Klein W. Kirby, President of A. Wilbert’s Sons, commented,
“Iberville Bank has been a part of A. Wilbert’s Sons since 1931. We
are proud of our 85 year bank history and are very pleased that
Iberville Bank will continue to be operated as a community bank
under the leadership of The First. Iberville Bank’s customers
should see a seamless transaction and the same local leadership
after the transaction is closed. The First is an outstanding
banking organization and we look forward to an even better
Iberville Bank going forward.”
Advisors
Keefe, Bruyette & Woods, Inc., with Christopher T. Mihok as
lead investment banker, acted as financial advisor to First
Bancshares, and Jones Walker LLP, with lead attorney Neal Wise,
acted as its legal advisor. Sheshunoff & Co., with Curtis
Carpenter as lead investment banker, acted as financial advisor to
A. Wilbert’s Sons Lumber and Shingle Company, and Goodwin Procter,
LLP, with lead attorney Andrew Goodman, acted as its legal
advisor.
Gulf Coast Community Bank
Transaction
Under the terms of the Agreement and Plan of Merger, GCCB will
merge with and into The First. First Bancshares will issue GCCB’s
shareholders shares of the First Bancshares’ common stock which,
for purposes of the acquisition, will be valued through a 30-day
average of First Bancshares’ Common Stock price as of five (5)
business days prior to closing. The merger consideration is valued
at $0.50 per share of GCCB common stock for a total of
approximately $2.3 million.
As of June 30, 2016, GCCB had $133.4 million in total assets,
$82.8 million in net loans, $115.7 million in deposits and $5.8
million in stockholders’ equity. GCCB serves the Pensacola, Florida
metropolitan statistical area through five locations in Gulf
Breeze, Pace and Pensacola, Florida. Information is available on
GCCB’s website: www.mygulfbank.com.
The merger agreement has been approved by the Board of Directors
of each company. Closing of the transaction, which is expected to
occur late in the fourth quarter of 2016 or early in the first
quarter of 2017, is subject to customary conditions, including
regulatory approval and approval by the shareholders of GCCB.
First Bancshares currently estimates annual pre-tax expense
reductions associated with the transaction will be approximately
46% of GCCB’s annual non-interest expenses. Assuming the
transaction is completed in the first quarter of 2017, the expense
savings are estimated to be fully achieved by the end of 2017. The
transaction is expected to be accretive in 2018, the first full
year of combined operations. Estimated acquisition and conversion
related costs are approximately $3.3 million on a pre-tax
basis.
The transaction is expected to have an earnback period of less
than 3 years from the completion of the transaction. The internal
rate of return for the transaction is projected to be greater than
25% which is well above First Bancshares’ estimated cost of
capital.
Buzz Ritchie, President and Chief Executive Officer of GCCB,
stated, "We are pleased to have the opportunity to join The First.
We are convinced that they are fully committed to the values of
community banking with an emphasis placed upon long term
relationships. This is a strategic move for us as we will
strengthen and expand our core products and services and will
better serve existing and future customers. We believe this merger
also provides strong value for our shareholders who have been
committed and loyal to us over the years."
Advisors
Performance Trust Capital Partners, with Jonathan W. Briggs as
lead investment banker, acted as financial advisor to First
Bancshares, and Jones Walker LLP, with lead attorney Neal Wise,
acted as its legal advisor. Monroe Financial Partners, Inc., with
Paula S. Johannsen as lead investment banker, acted as financial
advisor to Gulf Coast Community Bank, and Smith MacKinnon, PA, with
lead attorney John P. Greeley, acted as its legal advisor.
Combined Company
Upon completion of all transactions, the combined Company will
have approximately $1.6 billion in total assets, $1.4 billion in
total deposits and $1.1 billion in total loans. The Company will
have 48 locations in Mississippi, Louisiana, Alabama, and
Florida.
Private Placement of Preferred
Stock
First Bancshares also announced today the signing of SPAs for a
private placement of Preferred Stock, Series E, $1.00 par value.
The Company expects to raise gross proceeds of $63.25 million in
new capital through the private placement of 3,563,380 shares of
its Series E Preferred Stock at a price of $17.75 per share.
The preferred stock will automatically convert into shares of
First Bancshares’ Common Stock at a ratio of one share of Common
Stock for each share of Preferred Stock owned within three business
days following the Company’s receipt of shareholder approval. It is
currently anticipated that the shareholders’ meeting at which this
approval is to be solicited will be scheduled for December 7,
2016.
The Company intends to use the net proceeds from this offering
to finance a portion of the Iberville Bank Acquisition and related
expenses, to support its capital ratios in connection with
Iberville Bank and GCCB acquisitions and for general corporate
purposes. If the Iberville Bank or GCCB acquisitions are not
completed, the shares of Series E Preferred Stock will remain
outstanding and proceeds will be used for general corporate
purposes to support growth strategy, which may include organic
growth, funding acquisition opportunities, de novo branching into
new markets, redemption of our CDCI securities or other organic
expansion of our business.
The Company engaged the investment banking firm of FIG Partners,
LLC to act as its Senior Placement Agent, Stephens Inc. to act as
its Junior Placement Agent, and Keefe Bruyette & Woods, Inc. as
its Co-Placement Agent, all to assist with the offering. The law
firm of Jones Walker LLP acted as legal counsel to First Bancshares
and King, Holmes, Paterno & Soriano, LLP served as counsel to
the Placement Agents.
M. Ray “Hoppy” Cole, President & Chief Executive Officer of
First Bancshares and The First, commented, “We believe that the
announcements today of two mergers and the capital raise are
transformational in the history of our company and create
tremendous value for our shareholders. We are thrilled to join
forces with Iberville Bank and Gulf Coast Community Bank. Both
institutions share a common set of core values with our company.
They have distinguished themselves in their respective markets by
being totally focused on serving their clients and communities, by
delivering exemplary service and being good corporate citizens.
Their respective cultures align perfectly with ours which focuses
on safe, sound, profitable growth.
The combination of these institutions is a continuation of our
strategic plan of creating a regional community bank in the Gulf
South. The resulting company will offer additional products,
services, locations and capacity which will allow us to better
serve our existing clients and provide opportunities for growth in
two very attractive markets, Pensacola, FL and Baton Rouge, LA. We
are excited and honored that these institutions have agreed to
partner with us to form a company that we believe will provide
exceptional returns to our shareholders.”
About The First Bancshares, Inc.
The First Bancshares, Inc., headquartered in Hattiesburg,
Mississippi, is the parent company of The First, A National Banking
Association. Founded in 1996, the First has operations in
Mississippi, Louisiana and Alabama. The Company’s stock is traded
on NASDAQ Global Market under the symbol FBMS. Information is
available on the Company’s website: www.thefirstbank.com.
Forward Looking Statement
This news release contains statements regarding the projected
performance of The First Bancshares, Inc. and its subsidiary. These
statements constitute forward-looking information within the
meaning of the Private Securities Litigation Reform Act. Actual
results may differ materially from the projections provided in this
release since such projections involve significant known and
unknown risks and uncertainties. Factors that might cause such
differences include, but are not limited to: competitive pressures
among financial institutions increasing significantly; economic
conditions, either nationally or locally, in areas in which the
Company conducts operations being less favorable than expected; and
legislation or regulatory changes which adversely affect the
ability of the combined Company to conduct business combinations or
new operations. The Company disclaims any obligation to update such
factors or to publicly announce the results of any revisions to any
of the forward-looking statements included herein to reflect future
events or developments. Further information on The First
Bancshares, Inc. is available in its filings with the Securities
and Exchange Commission, available at the SEC’s website,
http://www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20161014005098/en/
The First Bancshares, Inc.M. Ray “Hoppy” Cole, Jr.,
601-268-8998Chief Executive OfficerorDee Dee Lowery,
601-268-8998Chief Financial Officer
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