Synergy Bancshares in Houma, Louisiana, is making good on a long-sought goal to expand into Baton Rouge with a plan to acquire Peoples Bancshares of Pointe Coupee Parish.
The $763 million-asset Synergy, based near New Orleans, said in a press release that it expects to close its buyout of the parent of the $337 million-asset Peoples Bank and Trust Co. of Pointe Coupee Parish in the third quarter. It did not disclose a price.
Peoples Bank and Trust is based in New Roads, a suburb of Baton Rouge — the state capital and home to Louisiana State University. Baton Rouge is the state’s second-largest market after New Orleans.
“Our board has long contemplated a strategic expansion into the Baton Rouge and the surrounding area market,” Synergy Chairman Morris Hebert said in the release last week. “We are excited to achieve this goal through a partnership with Peoples Bank and Trust and to expand Synergy Bank’s brand of community banking to Pointe Coupee and the surrounding parishes.”
Peoples has four branches, $257 million of loans and $273 million of deposits around the Baton Rouge market. Peoples’ president and CEO, Stephen David, plans to become an executive officer of Synergy after the deal closes.
“Synergy Bank is proud to become a part of the vibrant and dynamic community of Baton Rouge and beyond,” Jerry Ledet, Synergy’s president and CEO, said in the release. “We are committed to fostering growth, development, and prosperity of central Louisiana and the Bayou Region while meeting the unique needs of these communities.”
The deal comes at a time when overall merger-and-acquisition activity is relatively light across the banking industry amid heightened regulatory scrutiny and recession concerns. Only a few bank deals were announced in February — an official tally is pending — following just six acquisition announcements in January. That marked the slowest start to a year since the beginning of 2020, when the pandemic stunted deal volume across all sectors.
Robert Bolton, president of bank investor Iron Bay Capital, said that while M&A overall is clearly sluggish, small community banks remain under pressure to gain scale in order to invest in technology and compete with larger players. Many are also eager to enter new growth markets, he said in a recent interview, and this is bound to drive continued consolidation, at least among small lenders.
“You are seeing caution generally,” Bolton said. “But there’s still plenty of logical motivation for M&A out there.”
For the deal in Baton Rouge, Fenimore Kay Harrison served as legal adviser and CC Capital Advisors as financial advisor to Synergy. Maynard Cooper & Gale served as legal advisor and American Planning Corp. as financial advisor to Peoples.
