Hammond, La.-based First Guaranty Bancshares Inc. and McKinney, Texas-based Premier Bancshares Inc. have struck a deal valued at approximately $21.0 million.
Merger terms stipulate that each outstanding Premier common share will be converted into the right to receive cash equal to the Premier book value as of Dec. 31, 2016, plus $1.4 million -- which will be considered the gross consideration -- divided by the total number of outstanding Premier common shares as of the business day immediately prior to the closing date, multiplied by 50%; and that number of First Guaranty common shares equal to the gross consideration divided by the total number of outstanding Premier common shares as of the business day immediately prior to the closing date, multiplied by 50%, divided by the average closing price of First Guaranty common stock.
On an aggregate basis, SNL calculates the deal value to be 108.0% of book and 127.6% of tangible book, and 43.1x last-12-months earnings. The price is 16.17% of deposits and 13.65% of assets, and the tangible book premium to core deposits ratio is 4.74%.
For comparison, SNL valuations for bank and thrift targets in the Southwest region between Jan. 30, 2016 and Jan. 30, 2017 averaged 161.83% of book, 181.35% of tangible book and had a median of 21.97x LTM earnings, on an aggregate basis.
The deal is set to close either late in the second quarter or early in the third quarter, and is still subject to Premier shareholder approval and regulatory approvals. The transaction also has a $500,000 termination fee attached, payable to either party depending on the circumstances, in the event the deal is terminated.
Once the transaction closes, Premier unit Premier Delaware Bancshares Inc will be absorbed by First Guaranty while Synergy Bank S.S.B. will be merged into First Guaranty Bank.
Data compiled by SNL shows that First Guaranty Bancshares Inc. will enter Texas with five branches to be ranked No. 313 with a 0.02% share of approximately $767.89 billion in total market deposits.
In addition, the directors and officers of First Guaranty immediately prior to the deal's effective time will also initially be the directors of the surviving institution, according to a Form 8-K filed Jan. 30.
SNL data shows that First Guaranty Bank had assets of $1.50 billion as of Dec. 31, 2016, while Synergy Bank had assets of $151.9 million as of Sept. 30, 2016.
Baxter Fentriss & Co. served as financial adviser to Premier Bancshares, while Whitaker Chalk Swindle, represented by Bruce McGee, served as legal counsel. Luse Gorman PC, represented by Benjamin Azoff, served as legal counsel to First Guaranty.
SNL is an offering of S&P Global Market Intelligence.