Regions Financial Corp. to Acquire First National of Gainesville for $647 Million
GAINESVILLE, Ga. (AP) _ Regions Financial Corp. will acquire First National Bancorp of Gainesville in a $647 million stock deal that will more than double Regions’ branches in Georgia and Florida, the banks said Monday.
The proposed merger is the second big bank combination in Georgia this year. Just last month, Atlanta-based Bank South Corp. said it will be acquired by Charlotte, N.C.-based NationsBank Corp. for $1.6 billion.
First National operates 20 banks with 63 offices in north Georgia and central Florida. Birmingham, Ala.-based Regions operates 286 banking offices in five states, including nine in Georgia and 27 in Florida. Its flagship bank, First Alabama Bank, is that state’s largest.
By combining operations, Regions will be Georgia’s sixth largest bank ranked by share of deposits, according to SNL Securities, a research company in Charlottesville, Va.
``As we have looked to expand our franchise throughout the Southeast, a priority has been to increase our presence in the fast-growing Georgia market,″ said J. Stanley Mackin, Regions chairman. ``This affiliation will bring us into vital communities where we haven’t had a presence before.″
A wave of bank mergers is sweeping the country as financial institutions team up to increase market share and better compete against each other and nonbank companies that offer credit cards and other bank-like products.
First National’s $3.1 billion in assets would increase Regions’ total assets to $17.4 billion.
The deal calls for Regions to exchange .76 share of its common stock for each share of First National common stock. Based on Friday’s closing stock price of $41.50 per share of Regions stock, the transaction is worth about $647 million.
Region’s shares fell $1.12 1/2 to $40.37 1/2 on the Nasdaq Stock Market. First National’s shares rose 25 cents to $29 on the Nasdaq.
The merger is scheduled to close during the first half of 1996, subject to the approval of shareholders and regulatory agencies. First National’s affiliate banks will be renamed Regions Bank of Georgia.
The deal will lead to layoffs at First National, which employs 1,300 people, said Pete Miller, president and chief administrative officer. He said it’s too early to estimate how many jobs will be cut.
``We’re expecting some attrition, but they won’t be any of the people on the front line,″ Miller said.
Regions expects to cut $23 million in expenses after the merger.
First National has been one of Georgia’s most active bank acquirors, but has been viewed as a possible takeover candidate itself since its chairman resigned last spring after seven years at the helm.
In Georgia, Regions operates Regions Bank branches in Columbus and Rome, as well as offices of Fidelity Federal Savings in Dalton. It has mergers pending with two small Atlanta-area banks, Enterprise National Bank and Metro Bank.