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BancTrust Financial Group Inc. (BTFG) in Mobile, Ala., has put itself up for sale after its bid to raise capital from two private-equity groups fell through.
March 22 -
Making good on its promise to continue to grow through acquisitions, Iberiabank Corp. in Lafayette, La., announced Monday that it is buying the $350 million-asset Florida Gulf Bancorp Inc. in Fort Myers for up to $48.1 million in stock and cash.
March 19 -
BB&T shouldered more risk when it agreed to make its already complex deal for BankAtlantic more complicated. But the risk is manageable -- and worth it, experts say.
March 13 -
Hancock Holding of Gulfport, Miss., has won all federal approvals to acquire Whitney Holding in New Orleans, setting the stage for the deal to close on June 4 and create a $20 billion-asset company with more than 300 branches stretching from Florida to Texas.
May 16 -
Just days after federal authorities launched a probe of alleged accounting irregularities at Colonial BancGroup Inc., its $25 billion-asset bank collapsed Friday.
August 14
The planned sale of BancTrust Financial Group (BTFG) could have a big say in when and how troubled banks along the Gulf Coast — one of the country's rare growth markets — change hands.
More broadly, it could serve a barometer of how willing the industry's few able buyers are to do complex deals in an improving economy.
The Mobile, Ala., company, which has $2 billion of assets,
Experts peg at least five banks with operations in Alabama that could be buyers. They are: Hancock Holding (HBHC) of New Orleans; Iberiabank (IBKC) of Lafayette, La.; BB&T (BBT) of Winston-Salem, N.C.; Home BancShares (HOMB) of Conway, Ark.; and BancorpSouth (BXS) of Tupelo, Miss.
The 41-branch BancTrust could also be a fill-in opportunity for Trustmark (TRMK), of Jackson, Miss., which does not have branches in Alabama but opened a mortgage office there last year.
Those institutions and BancTrust either declined to comment or did not return calls.
BancTrust is attractive despite its deep construction loan woes and scattered upstate footprint. It is a relatively large, independent community bank, which gives it scarcity value. It is also the fifth-largest deposit holder in Mobile, an important shipping and trucking hub with great growth prospects.
It has "a footprint that at least on paper is very attractive," says Jeff Davis, an analyst with Guggenheim Securities.
There should be "a lot of interest," he says. But "this won't be the cleanest engagement."
BancTrust is unprofitable, highly leveraged and plagued with large amounts of overdue construction loans. Everyone knows it is for sale, which raises the prospect of customer flight.
Investment talks with Capital Z Partners and Pine Brook Road Partners ended after three months on March 15 after the parties failed to settle on terms. Bibb Lamar Jr., BancTrust's president and chief executive, indicated in a press release March 21 that the firms had offered too low a price.
BancTrust has hired Keefe Bruyette & Woods (KBW) to run a sales process.
Pricing BancTrust could be tricky because its debt may exceed its equity by a wide margin. It has a total of $104 million in debt outstanding to the Treasury Department, Federal Deposit Insurance Corp. and preferred shareholders. Its common equity was just $115 million at yearend, before it revised its 2011 results last week to reflect a $50 million loss in 2011, rather than the $1.4 million it initially reported. The higher loss was due to a writedown and costs related to its capital-raising plans.
Davis estimates BancTrust's adjusted tangible common equity may be as low as $60 million. The new round of loan markdowns may not be its last, he says, given how more than 9% of its assets were nonperforming at yearend.
Difficulty making the numbers work could winnow the list of potential buyers to its closest, strongest rivals.
Hancock and Iberiabank are serial acquirers with shares that trade at strong multiples to their equity. That means they can pay a higher price than others in stock deals with less dilution to their shareholders. Overlapping branch networks could result in sizable cost savings.
Hancock is familiar with BancTrust and its markets,
Iberiabank
BB&T has shown an appetite for Alabama banks and for tricky deals.
Home BancShares' interest could be tempered by a stated preference for buying banks that operate in Florida. BancorpSouth recently raised capital and wants to be a buyer, but the relatively low multiple its shares trade at when compared to the others could hinder its buying power.