Louisiana bank awaiting federal approval of acquisition

Louisiana bank awaiting federal approval of acquisition

On Behalf of | Nov 20, 2012 | Uncategorized |

When a person or group of individuals starts a business in Louisiana, the first of its business goals is always to establish the company in the local market. Soon, if the business finds success, in many cases the leaders may turn their attention to expanding operations. Initially, this may mean opening additional locations; at some point, however, those in power may look into the option of acquiring other companies to enhance the original business. Although this can sometimes lead to business litigation, if proper planning is involved, the interested parties may be able to reap great rewards.

This may be the case for one Louisiana business currently going through the acquisition process. Red River Bank, which has locations through much of northern Louisiana, is attempting to acquire Fidelity Bancorp Inc., which operates in the Baton Rouge area. The acquisition is currently being reviewed by federal regulators, who must approve the merger.

Red River Bank boasts that it is the seventh largest bank based in the state. Although the purchase price is not being publicized, the acquisition is likely part of a business strategy to grow and establish a further foothold in Louisiana – and possibly beyond. Red River Bank currently has over $1 billion in assets with 15 banking centers, while Fidelity has about $125 million in assets and 5 locations. If all goes well, the merger should be completed in the first quarter of 2013.

In general, mergers or acquisitions are a hallmark of a healthy, growing company. However, such complex business transactions are the result of a strategic planning process. Along the way, many considerations must be addressed to ensure the transaction itself goes smoothly. In many cases, laws and regulators – as noted in Red River Bank’s ongoing acquisition – will need to be addressed during the process; proper planning is key when attempting to avoid business litigation. With the appropriate approach, however, such a business transaction can turn out to be just what the company hoped for when looking to expand and enhance the original business.

Source: Shreveport Times, “Buzz on Business: Red River Bank to acquire Fidelity Bank,” Nov. 17, 2012