Hammond-based First Guaranty Bancshares, the parent company of First Guaranty Bank, plans to acquire Union Bancshares in a $43 million deal by the fourth quarter.
First Guaranty would acquire all of the outstanding common stock of the parent company of Marksville-based The Union Bank and pay cash to all stockholders of the bank pending regulatory approval. The deal is based on 1.5 times the estimated tangible book value of Union Bank as of Sept. 30. Darrel Ryland, an attorney in Marksville, controlled about 53% of the bank as of 2016, according to Federal Reserve bank ownership records.
It will expand First Guaranty's market share across the northern part of the state.
"This acquisition will move First Guaranty into a part of Louisiana where we have never done business and also tie together all of our operations," said Alton Lewis, CEO of First Guaranty.
First Guaranty has more than two dozen branches across Louisiana from Hammond to Lake Charles. The Union Bank has nearly a dozen branches in its network from Alexandria to Lafayette.
The Union Bank generated $1.6 million in net income as of June 30, up from $1.3 million as of June 2018. The Union Bank had $209 million in deposits and $261 million in total assets. The Marksville-based bank had 85 employees and also operated Union Insurance Agency and Union Bank Mortgage Co.
First Guaranty had about $1.7 billion in deposits and nearly $1.9 billion in total assets as of June 30. First Guaranty generated $7.2 million in net income as of second quarter this year, down from $9.2 million as of June 2018. It has about 347 employees.
The Hammond-based bank set aside $2.4 million for potential loan defaults, known as provision for loan losses, as of June 30, up from $196,000 as of June 2018.