Home Federal Bancorp in Shreveport, La., has agreed to buy Northwest Bancshares in Benton, La.
The $590.5 million-asset Home said in a press release that it will pay $10.1 million in cash for the $81.7 million-asset parent of First National Bank of Benton. The deal is expected to close in the first quarter.
A portion of the purchase price will be based on Northwest’s assets at the end of the last month before the deal closes. Home also agreed to let Northwest pay an estimated $8.4 million special distribution to its shareholders prior to closing.
First National has one branch, $52 million of loans and $65 million of deposits.
“First National provides a natural expansion of our franchise within our home market,” James Barlow, Home Federal’s chairman, president and CEO, said in the release. “First National has developed an exceptional customer base in its market area. We are excited to expand to the Benton community and increase our market share in Bossier Parish.”
Home Federal said it expects the deal to be more than 20% accretive to its earnings per share after cost savings are realized. It should take about three years for the company to earn back any dilution to its tangible book value.
Raymond James and Silver, Freedman, Taff & Tiernan advised Home Federal, while Hillworth Bank Partners provided a fairness opinion. SEACAP Financial and Butler Snow advised Northwest.