Under the terms of the agreement, shareholders of Cameron, the subsidiary of Cameron Bancshares, will receive 3.464 shares of IBERIABANK common stock per share of Cameron common stock, subject to certain adjustments.
The stock issuance has been valued at approximately $133m in the aggregate, based on 688,404 shares of Cameron common stock outstanding. Cameron had no holding company debt outstanding at year-end 2010.
Roy Raftery, president and CEO of Cameron, will be appointed as new chairman of the Lake Charles region for IBERIABANK after the acquisition is consummated.
The bank expects that the transaction to be accretive to earnings per share approximately 3% to 5%, assuming synergies are fully phased in and excluding estimated one-time and merger-related costs of approximately $11m on a pre-tax basis.
Estimated synergies include annual expense savings of approximately $6m, pre-tax, to be fully achieved by the second half of 2012.
IBERIABANK estimates approximately $46m in goodwill will be created with this acquisition. The estimated internal rate of return for the transaction is above 20%, well exceeding IBERIABANK’s cost of capital.
IBERIABANK president and CEO Daryl Byrd said that Cameron has an enviable distribution network of 22 offices and 48 ATMs, a very successful operating strategy, as well as outstanding clients and associates. This combination provides interesting growth opportunities for the shareholders of both companies.
Raftery said that Cameron State Bank started in 1966 in Cameron, Louisiana and has grown to become the most convenient and customer-focused bank throughout the Lake Charles area.
"Our clients will have the added convenience of having access to 72 banking offices and 102 ATMs in Louisiana, and diversified banking, mortgage, title insurance, trust, and wealth management operations across a 12-state footprint. Our history of strength, growth, and profitability are a terrific fit with IBERIABANK and we expect a very smooth transition," Raftery said.
The transaction was approved by the board of directors of both the companies and is expected to close during the second quarter of 2011. However, the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of Cameron’s shareholders.
