LAFAYETTE, La., Sept. 26, 2012 /PRNewswire/ -- MidSouth Bancorp, Inc. ("MidSouth") (NYSE MKT: MSL), and PSB Financial Corporation ("PSB"), the holding company of Many, Louisiana based The Peoples State Bank, announced today the signing of a definitive agreement for MidSouth to acquire PSB. The transaction has been approved by the Board of Directors of each company and is expected to close in the fourth quarter of 2012. Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of PSB shareholders. Additional information on the acquisition can be found on the Investor Relations tab of MidSouth's website at www.midsouthbank.com.
Following the closing of the transaction, Leonard Q. "Pete" Abington, Chairman and CEO of PSB, will be named to the board of directors of MidSouth and its subsidiary, MidSouth Bank, and John J. "JJ" Blake III, President and CEO of Peoples State Bank, will be named Senior Vice President and Regional President of MidSouth Bank's Timber Region. Conversion of all 16 Peoples State branches to MidSouth Bank's computer systems is expected by
March 30, 2013.
Abington said joining forces with MidSouth Bank provides Peoples with the resources and expertise necessary to further expand in the Pineville, Alexandria, Shreveport- Bossier and Texarkana markets while filling in gaps in MidSouth Bank's Louisiana- Texas footprint. "Both Peoples and MidSouth experienced remarkable growth during an exceptionally challenging economic environment," Abington continued, "but everyone in this industry understands that in this burdensome and costly regulatory environment we must consolidate to remain competitive."
Blake stressed the importance of two like-minded community banks having the opportunity to merge with zero overlap in coverage areas. "From my perspective - and the way I'm confident our shareholders, customers and employees will view this - we have taken the very best of South Louisiana banking and combined it with the very best of North Louisiana banking," he said. "As Peoples approaches the centennial anniversary of its founding, we think that's a recipe for success for the next 100 years."MidSouth Bank President and CEO Rusty Cloutier echoed those sentiments, noting the magnitude to which the merger enhances the connection between Louisiana and Texas by expanding MidSouth Bank's presence north from Acadiana all the way up to Texarkana. "We've known each other for more than a decade and have always viewed Peoples as an attractive partner for those reasons and so many others, chief among them are the quality of the employees, the diversity of our loan portfolios and our philosophical similarities about community involvement, customer service and the basic principles of banking," Cloutier said. The MidSouth executive also emphasized the benefit of having North Louisiana operations should hurricanes force people in South Louisiana markets to evacuate north. "When this deal is done, the combined bank, with total assets of $1.9 billion, will have 58 banking centers up and running. This merger is but one step - though a very big and important one - in our continued expansion efforts to enhance our competitive stance and position us for successful growth to better serve our customers, investors and employees in the future," Cloutier said. Under the terms of the agreement, shareholders of PSB will receive, in the aggregate, approximately $16 million in cash, subject to certain adjustments, 756,534 shares of MidSouth common stock and $10 million liquidation value of 4% noncumulative convertible preferred stock. In addition, the agreement provides for potential additional cash consideration of up to $2 million based on the resolution of certain identified loans over a three-year period after the acquisition. As part of the transaction, PSB's preferred stock issued under the U.S. Treasury's Community Development Capital Initiative will also be redeemed in full. Based on MidSouth's 20-day average closing stock price as of September 25 of $14.54, the transaction would have an estimated pro forma value of $39.0 million, including the potential contingent cash consideration, roughly 1.5 times tangible book value at June 30, 2012. MidSouth expects the transaction to be accretive to earnings per share by 30% in 2013 based on annual pre-tax expense savings of 25%, excluding estimated merger and conversion related costs of approximately $0.5 million on an after-tax basis. The estimated internal rate of return for the transaction is expected to be in the "mid-teens" and in excess of MidSouth's cost of capital. About MidSouth Bancorp, Inc. MidSouth Bancorp, Inc. is a bank holding company headquartered in Lafayette, Louisiana, with assets of $1.4 billion as of June 30, 2012. Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas. MidSouth Bank currently has 40 banking centers in Louisiana and Texas with plans to open four additional branches before year-end and is connected to a worldwide ATM network that provides customers with access to more than 43,000 surcharge-free ATMs. Additional corporate information is available at www.midsouthbank.com. Additional Information about this Transaction In connection with the proposed transaction, PSB Financial Corporation ("PSB") will distribute to its shareholders a proxy statement that will also include information regarding MidSouth Bancorp, Inc. ("MidSouth") and the MidSouth securities that are expected to be privately issued in connection with the proposed transaction. SHAREHOLDERS OF PSB ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS DISTRIBUTED BY PSB WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders of PSB will be able to obtain a free copy of the proxy statement (when available) by directing a request by telephone or mail to PSB Financial Corporation, 880 San Antonio Avenue, Many, LA 71449, Attention: Clay Abington, 318.238.4489 THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE OR JURISIDICTION.