First Bancshares announces acquisition of Iberville Bank, GCCB
The First Bancshares announced the signing of a Stock Purchase Agreement with A. Wilbert's Sons Lumber and Shingle Company, 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 the signing of an Agreement and Plan of Merger under which it has agreed to acquire Gulf Coast Community Bank, Pensacola, Florida, in an all-stock transaction. In addition, the Company entered into Securities Purchase Agreements with a limited number of institutional and other accredited investors, including certain directors of the Company 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 at a price of $17.75 per share, for aggregate gross proceeds of $63.25 million. 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. 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.