Nearly a month after they worked to clear up rumors and confusion suggesting they were up for sale, officials at BancTrust announced late Wednesday the company is actively pursing a merger with another financial institution.

BancTrust Financial, which is the parent holding company for BankTrust, announced Wednesday — after markets had closed — that efforts to recapitalize the company with investments from two private equity firms did not work out ahead of a March 15 deadline, and company officials instead will seek potential merger partners.

“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 shareholder’s interest,” BancTrust Financial Group President and Chief Executive Officer Bibb Lamar Jr., said in a Thursday evening release. “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.”

BancTrust has hired Keefe, Bruyette & Woods, Inc. as its financial advisor and to assist in evaluating merger opportunities.

“They are engaged to identify possible prospects and I would imagine that will take two or three months for conversations and for other companies to take a look at us,” Lamar said in an interview with the Times-Journal Thursday evening. “Then if we can reach an agreement and find the right partner, I would think the transaction could be completed by the end of the year.”

As for the March 15 date, it was when the day the exclusivity agreement between BancTrust Financial and the two investment groups ended. In the past few days, Lamar said the two sides were not able to come to an agreement that was good for both sides and good for BancTrust Financial’s shareholders.

“It just came down to when you have investors and they are willing to pay a certain price …,” Lamar said. “ You look at the ‘x’ share you are selling to them and then you look what your bank might get with a merger partner and you have to compare the two.”

In addition to the merger plans, the company announced a number of financial moves, including the move to write down the net carrying value of other real estate owed by $27 million and planned to expense $1.2 million of previously deferred costs associated with the capital raise efforts during the 2011 fiscal year.

“By making these adjustments to its provision for loan losses and asset values, while still remaining well capitalized, we believe that BancTrust is now in a stronger position for the future and to engage in a strategic transaction to enhance shareholder value,” Lamar said in the release.

The company, which is based in Mobile, employs an estimated 488 in Alabama.

“We met pretty much all the employees down in Mobile and Baldwin County and I think everybody is anticipating — I think there’s a little bit of anxiety — but anticipating what might happen,” Lamar said. “I’ve been in this long enough that there are ups and downs, peaks and valleys, and I’m a firm believer that things work out for the best,” he said. “We are going to move ahead and make a success out of whatever we do.”