Southeast Vineyard Remains Bountiful: Many Attractive Acquisition Targets Are Still around, Investment House Says
Fraust, Bart, American Banker
NEW YORK -- Large southeastern banking companies last month continued their summer-long "picking" of banks in their region, but analysts say plenty of attractive takeover candidates are still hanging on the vines.
"We believe consolidation will continue, but many small banks will not be merged out of business," says Robinson-Humphrey Co., an Atlanta-based investment banking house, in a recently published research report.
"The number of acquirers is small relative to the number of possible acquisition targets, and acquirers are being selective in order to obtain the best possible market coverage at current prices," adds the report.
A couple of takeover candidates may be overripe, according to the report, at least from the perspective of bank stock investors seeking to capitalize on southeastern mergers.
First Bankers Corporation of Florida in Pompano Beach and CB&T Bancshares Inc. in Columbus, Ga., are fully valued in terms of their market prices, Robinson-Humphrey says.
Instead, the Atlanta company recommends AmSouth Bancorp. and Central Bancshares of the South, both in Birmingham, Ala.; Florida National Banks of Florida Inc. in Jacksonville; South Carolina National Corp. in Columbia; Third National Corp. in Nashville, and Dominion Bankshares Corp. in Roanoke, Va.
Three major southeastern deals were announced last month:
* Sovran Financial Corp., Norfolk, Va., said it planned to acquire the $3.1 billion-asset Suburban Bancorp Inc., Bethesda, Md., for about $405 million in common stock. The deal fills a hole in Sovran's plan to cover the District of Columbia banking market. The company earlier agreed to buy D.C. National Bancorp.
* In a deal that will eliminate the normal cost of changing signs, the Citizens and Southern Georgia Corp. in Atlanta agreed to buy the $2.3 billion-asset Citizens and southern Corp., Charleston, S.C., for about $400 million in cash. In July, the Atlanta corporation completed the acquisition of Landmark Banking Corporation of Florida in Fort Lauderdale.
* For its third interstate transaction, First Union Corp., Charlotte, NC., signed on Couthern Bancorp., Columbia, S.C., for about $216 million in cash or debt. Also last month, shareholders of Atlantic Bancorp. in Jacksonville, Fla., ratified a plan to affiliate the holding company with First Union. Also on tap for First Union is the acquisition of Central Florida Bank Corp., Dade City, and a large in-state merger with Northwestern Financial Corp., Greensboro, N.C.
Another large southeastern deal moved a step closer to completion last month when shareholders approved the planned merger of Wachovia Corp. of Winston-Salem, N.C., and First Atlanta Corp.
On a smaller scale, two southeastern companies made their initial interstate moves: First American Corp., Nashville, announced plans to buy the $170 million-asset First Ashland Corp., Ashland, Ky., and Southern National Corp., Lumberton, N.C., agreed to acquire the $40 million-asset Horry County National Bank, Loris, S.C.
The feverish interstate banking in the Southeast and other regions of the U.S. followed the June 10 decision of the U.S. Supreme Court affirming the constitutionality of state laws that restrict mergers and acquisitions to a specified region.
In the Southeast, regional interstate banking laws have been enacted in Florida, Georgia, South Carolina, North Carolina, Kentucky, Tennessee, Virginia, and Maryland.
Alabama has not passed an interstate banking law, but the state's four largest bank holding companies for the first time have agreed to work toward passage of a bill in 1986.
Robinson-Humphrey's report identifies what it considers the hot and tepid takeover prospects in several southeastern states.
Georgia: "The Georgia market is Atlanta," according to the report, noting that the market contains 49% of the state's employment base and 7. …