Magazine article American Banker

First Alabama Wins the Bidding for Secor, the State's Largest Thrift

Magazine article American Banker

First Alabama Wins the Bidding for Secor, the State's Largest Thrift

Article excerpt

ATLANTA -- First Alabama Bancshares Inc. won a bidding battle to buy Secor Bank, Alabama's largest thrift, for about $139.4 million, or 123% of estimated book value.

The Birmingham-based bank company, which has $7.9 billion in assets, said late Tuesday that it would purchase the $2 billion-asset thrift with a combination of stock to Secor shareholders and cash to the Federal Deposit Insurance Corp.

To Close by Yearend

The government has warrants equal to 25% of Secor's shares.

The in-market deal, expected to close by yearend, would boost First Alabama's earnings by 3% to 5% in 1994 and add about $1 to its book value of $18.09 a share, said Robert P. Houston, the bank's comptroller.

In late trading Wednesday, Secor's stock soared $1.375 to $18.25 a share. First Alabama fell $1 to $31.875 a share. The proposed exchange ratio valued Secor at $22.09 a share.

A bidding war for the recovering thrift was launched on May 7, when Secor announced an unsolicited offer -- though the thrift did not identify the prospective acquirer. Informed sources said the bidder was Amsouth Bancorp., also based in Birmingham, which bought five Secor branches last year.

Drumming Up Bids

But Victor E. Nichol Jr., Secor's president and chief executive and a former senior credit officer at Amsouth, was not on the best of terms with his former employer, several sources said. As a result, he is believed to have solicited other bids.

"We were involved in the process," an Amsouth spokesman said Wednesday. …

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