BancTrust Financial Group, Inc. (NASDAQ: BTFG) (the “Company” or “BancTrust”) today announced it has ended its efforts to recapitalize the Company as an independent entity. Previously, the Company entered into an agreement with two private equity firms to serve as lead investors providing approximately 49% of the anticipated capital to be raised. In turn, the Company provided the investors an exclusivity commitment during the pendency of the additional capital raise. That exclusivity period has expired without a successful capital raise and without any obligation to pay a termination fee.
“While we began the capital raise believing we could generate significant shareholder value as a recapitalized independent entity competing through our franchise in the markets in which we operate, it became increasingly clear as the process neared conclusion that the recapitalization could only be effected at a price level that was not in our shareholders’ interest. Instead, the Board of Directors has authorized management to seek a recapitalization of the Company through a strategic merger, and we are in the process of pursuing that strategy,” stated Bibb Lamar, Jr., President and Chief Executive Officer of BancTrust Financial Group, Inc. BancTrust has hired Keefe, Bruyette & Woods, Inc. as its financial advisor and to assist BancTrust in evaluating strategic merger opportunities.
In connection with the capital raise due diligence process, BancTrust completed an in-depth review of asset quality, other real estate owned carrying values, and the adequacy of its allowance for credit losses. Earlier this month, management undertook a careful analysis as to whether, given the recently received information generated by this review, additional provisions and write-downs should be made in the fourth quarter of 2011. BancTrust, in consultation with its independent registered public accounting firm and with the concurrence of the Audit Committee of the Board of Directors, concluded that certain asset quality indicators and the expected liquidation horizon of nonperforming assets warrant an increase in its provision for loan losses and a decrease in the carrying value of certain other real estate owned, and that these matters should be included in the results of operations for the fourth quarter of 2011.