The First Bancshares Inc. of Hattiesburg announced Tuesday that it will buy an Alabama bank for $60 million, expanding its footprint in southwest Alabama.
First Bancshares says it will acquire Southwest Banc Shares Inc. of Chatom, Ala., paying $36 million in stock and $24 million in cash.
The Mississippi bank seeks to sell $45 million in stock, in part to raise cash for the purchase. The current owners of Southwest would own about 11 percent of the combined company, assuming those shareholders approve the merger.
First Bancshares announced in January that it had acquired Gulf Coast Community Bank, based in Pensacola, Fla., and Iberville Bank, based in Plaquemine, La.
First Bancshares operates as Iberville Bank in parts of Louisiana. Southwest operates as First Community Bank at nine branches in Alabama’s Washington, Mobile and Baldwin counties.
First Bancshares also announced Tuesday that its third quarter net income doubled — to $4.7 million over $2.2 million for the year-earlier period.
Earnings per share were 51 cents, compared with 45 cents for the third quarter of 2016. Its shares on the NasdaqGM stock market closed down 20 cents at $30.40 Wednesday, nearing their 52-week high of $30.95. The 52-week low ws $21.50.
The First says it expects the latest merger to add to profits in 2019, and says it will improve overall business because there are more small and mid-sized businesses to lend to along Alabama’s Gulf Coast than in nearby Mississippi areas.
The acquirer expects to spend $6 million on merger costs, but says it will be able to cut 40 percent of First Community’s non-interest expenses.
It’s the seventh acquisition for The First since 2011. The deal would push The First over $2 billion in assets and give the bank about 5 percent of the deposit market in the three Alabama counties.
The deal is expected to be completed early next year.