First Guaranty Bank announced today that it will acquire Homestead Bancorp for approximately $13 million in cash. Under the terms of the agreement, First Guaranty Bancshares will acquire all of the issued and outstanding shares of common stock of Homestead Bancorp for the cash purchase price of $17.60 per share. Outstanding and unexercised stock options will be redeemed for cash at $17.60 per share, the companies said.
The aggregate purchase price to be paid in the acquisition represents 1.26 times Homestead Bancorp's fully diluted book value at September 30, 2006. At September 30, 2006, Homestead Bancorp had $132.3 million in total assets, $68.9 million in total loans, $69.5 million in total deposits and $10.3 million in shareholders' equity. Michael R. Sharp, president and CEO of First Guaranty Bank and First Guaranty Bancshares commented, “We are delighted to have the opportunity to associate with Homestead Bancorp and expand our operations. This acquisition will expand our presence into Walker, Louisiana in Livingston Parish, which is one of the fastest growing parishes in the state. "This acquisition will strengthen our number one position in terms of having the largest deposit base in Amite and Hammond, Louisiana. In addition, Homestead Bank is a major home loan lender in our area. We expect that their expertise and knowledge of their respective markets will enhance the combined entity's mortgage lending activities." Upon completion of the proposed transaction, it is anticipated that the combined financial institution will have approximately $863.6 million in total assets, $579.5 million in total loans, $709.1 million in total deposits and $57.6 million in shareholders' equity on a proforma basis as of September 30, 2006. The merger is expected to close in the second quarter of 2007, both companies said.