BancorpSouth Bank has agreed to acquire Alabama-based Merchants Trust and its wholly owned subsidiary, Merchants Bank.
As per the terms of the agreement, Merchants will be merged with and into BancorpSouth Bank.
Merchants, which is based in Jackson, Alabama, operates six full-service banking offices in Clarke and Mobile counties in Alabama.
The merger will expand BancorpSouth’s presence in Mobile County, Alabama and allow it to enter new markets in the surrounding counties. BancorpSouth Bank currently operates two full-service banking offices, two mortgage loan production offices and one regional insurance office in Mobile, Alabama.
As of September 30, 2018 (unaudited), Merchants, on a consolidated basis, reported total assets of $221 million, total loans of $152 million and total deposits of $195 million.
Under the terms of the merger agreement, BancorpSouth Bank will issue 950,000 shares of BancorpSouth Bank common stock, plus $8 million in cash, for all outstanding shares of Merchants Trust, Inc. capital stock, subject to certain conditions and potential adjustments.
The terms of the agreement provide for a collar with respect to the total deal value ranging from $37.5 million to $43 million. If necessary, the share count may be adjusted downward or the cash consideration adjusted upward to accommodate the respective boundaries of the collar.
BancorpSouth Bank chairman and CEO Dan Rollins said: “We’re pleased that Merchants agreed to join forces with us. Through this merger, we’ll be able to leverage our combined strengths in Southwest Alabama, which is a strategically important market for BancorpSouth.
“I want to commend Merchants’ leadership and teammates on their extraordinary efforts to help their customers and communities grow. I’m confident that we’ll be able to continue to build on their track record of success.”
Merchants Bank CEO Joe Bedwell said: “We’re excited to have this opportunity to partner with BancorpSouth. Its eight-state footprint and additional products and services will allow us to better meet the needs of our growing customer base and continue our legacy of supporting the economic growth of our communities.”
Upon completion of the transaction, Bedwell will serve as BancorpSouth’s Clarke County Chairman, and Jim Reid, President & Chief Financial Officer of Merchants Bank, will serve as BancorpSouth’s Clarke County President.
The merger has been unanimously approved by the boards of directors of both companies. The closing of the transaction is subject to certain conditions, including the approval by Merchant’s shareholders and the receipt of customary regulatory approvals.
The transaction is anticipated to close during the the first half of 2019, pending regulatory approval and satisfaction of the other customary closing conditions.
Merchants was advised in this transaction by Porter White Capital, LLC as financial advisor and Jones Walker LLP as legal counsel. Alston & Bird LLP acted as legal counsel to BancorpSouth.
Source: Company Press Release