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BancorpSouth to buy Texas-based Central Community

TUPELO, Miss. (AP) -- Mississippi's BancorpSouth Inc. will acquire Central Community Corp., the parent of Austin-based First State Bank Central Texas, pushing the bank much deeper into the competitive Texas banking market.

BancorpSouth said Wednesday that its offering Central Community stockholders shares of its own stock worth $182.3 million, plus $28.5 million in cash.

If Central Community shareholders and regulators approve, the deal could close by June 30.

After no acquisitions since 2007, it's the second announced in a month by Tupelo-based BancorpSouth. It's also seeking to buy Ouachita Independent Bancorp of Monroe, La., for $115 million in stock and cash. The aggressive moves come after the bank named new CEO Dan Rollins and worked through bad-loan problems that had depressed earnings.

The Central Community acquisition will give BancorpSouth 11 offices in the Austin area, 11 offices in the Killeen-Temple-Fort Hood area and nine offices in other parts of central Texas.

"This merger will give us the opportunity to expand our footprint into the vibrant central Texas market," Rollins said in a statement. "The Austin, Texas MSA consistently ranks at or near the top of almost all statistical publications regarding economic drivers and activity."

In a slide presentation to investors, BancorpSouth said the acquisition would add to profits. The company already has a small branch network in East Texas, but it said the merger would make BancorpSouth the 29th largest among the state's more than 600 banks, setting the stage for it to acquire more banks there.

The acquisition would add $1.3 billion in assets to BancorpSouth, on top of the $653 million that Oauchita Independent would add.

Also Wednesday, BancorpSouth announced that its fourth-quarter 2013 profit rose 63 percent over the same three months of 2012.

Quarterly profit rose to $27.7 million, or 29 cents per share. That's up from $17 million or 18 cents per share in 2012's fourth quarter.

For all of 2013, profit rose 12 percent to $94.1 million, or 99 cents per share.

Analysts surveyed by FactSet had estimated 28 cents per share for the quarter, on average.

The company didn't set aside any money to cover future bad loans in the fourth quarter, down from $6 million in 2012's fourth quarter.

Return on average assets, a key measure of bank profitability, rose to 0.85 percent in the fourth quarter. That's the highest in more than a year, but still below national averages.

BancorpSouth said that loans rose by $184.9 million, the third straight quarter of loan growth.

The amount that the company collected in interest from borrowers, net of what it paid out to savers, rose to $102 million. The net interest margin, a measure of that spread divided by all loans, rose to 3.52 percent in 2013's fourth quarter, up from 3.44 percent for the fourth quarter of 2012. That spread is traditionally a basic ingredient of bank profits.

Based in Tupelo, the $13 billion bank has offices in Mississippi, Arkansas, Alabama, Florida, Louisiana, Missouri, Tennessee and Texas.