Investar revisits bank purchase it terminated during pandemic’s early days

Investar Holding in Baton Rouge, La., has agreed to buy Cheaha Financial Group in Oxford, Ala., for the second time.

The $2.3 billion-asset Investar said in a press release Monday that it will pay $41.1 million in cash for the $236 million-asset Cheaha. The deal is expected to close in the second quarter.

The agreement includes a stipulation that Cheaha must have at least $27.6 million in adjusted tangible shareholders equity when the deal closes.

Investar originally agreed to buy Cheaha in December 2019 but the acquisition was terminated six months later because of the unpredictable market conditions tied to the coronavirus pandemic. The original deal was also valued at $41.1 million.

Cheaha has four branches, $126 million of loans and $202 million of deposits.

“Last year we were disappointed that the uncertainty associated with the pandemic resulted in the termination of our agreement,” Shad Williams, Cheaha’s president and CEO, said in the release. “Both banks remain strong and the partnership that made sense then makes even more sense now.”

“Although we terminated the previous agreement … we continued to regard Cheaha as a strategic fit with our organization,” John D’Angelo, Investar’s president and CEO, said in the release. “We maintained a good relationship following the termination and are pleased that we were able to reach a new agreement once the environment made consummation of the transaction practical.”

Janney Montgomery Scott and Fenimore, Kay, Harrison & Ford advised Investar. Maynard Cooper & Gale and National Capital advised Cheaha.

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