First Bancshares in Hattiesburg, Miss., has agreed to buy Southwest Georgia Financial in Moultrie.
The $3.5 billion-asset First Bancshares said in a press release Wednesday that it will pay $88 million in stock for the $548 million-asset Southwest Georgia. The deal, which is expected to close in the second quarter, priced Southwest Georgia at 182% of its tangible book value.
With the acquisition the Mississippi bank would enter southern Georgia, where the seller has eight branches, $395 million in loans and $466 million in deposits.
"We are thrilled" Southwest Georgia "chose our company as their strategic partner,” Hoppy Cole, First Bancshares’ president and CEO, said in the release.
The Georgia lender “is a well-run community bank with a strong brand and a rich history as a trusted financial partner in south Georgia,” Cole added. “Our companies share a set of core values with a focus on client service and shareholder return."
"This partnership brings two complementary banks together and will provide a great opportunity for our employees, customers, and shareholders," DeWitt Drew, Southwest Georgia’s president and CEO, said in the release.
First Bancshares said the deal should be 3.6% accretive to its earnings per share in the first full year of operations. It should take less than two years for First Bancshares to earn back the expected 1% dilution to its tangible book value.
First Bancshares expects to incur roughly $7.3 million in merger-related expenses. The company plans to cut about a third of Southwest Georgia's annual noninterest expenses, or $4.9 million.
Keefe, Bruyette & Woods and Alston & Bird advised First Bancshares. Banks Street Partners and Troutman Sanders advised Southwest Georgia.
