BancorpSouth Bank BXS has secured consent from the Federal Deposit Insurance Corporation (FDIC) for the acquisitions of Texas based Casey Bancorp, Inc. and its subsidiary, Grand Bank of Texas, and Alabama based Merchants Trust, Inc., along with the company’s arm, Merchants Bank.
The company expects to close both transactions on Apr 1, subject to fulfillment of customary closing conditions. These deals were announced on Nov 13, 2018.
Following the closure of the deals, BancorpSouth will have roughly $18.6 billion in assets.
Per the terms of the deal, announced in November 2018, for the acquisition of Merchants Trust, BancorpSouth will likely issue 950,000 shares of common stock for all outstanding shares of capital stock of the former. Further, the bank will likely pay $8 million in cash, subject to certain
conditions and adjustments. The total deal value, which has been set at $37.5 million, provides for a collar of $37.5-$43 million.
Likewise for the Casey Bancorp buyout, BancorpSouth will issue 1,275,000 shares of common stock for all outstanding shares of capital stock of the former. Along with this, the company will likely pay $11 million in cash, subject to certain conditions and adjustments. The deal, valued at $51.75 million, provides for a collar ranging between $51.75 million and $56.75 million.
Post merger, Michael Casey, present chairman of the board of directors and CEO of Grand Bank, will serve as BancorpSouth’s Dallas Area chairman. Also, Merchant Bank CEO Joe L. Bedwell will serve as BancorpSouth's Clarke County chairman. In addition, Jim Reid, president and chief
financial officer of Merchant Bank, will take charge as BancorpSouth's Clarke County president.
Driven by a solid liquidity position, the bank has been making strategic investments through M&As for the past few years. Recently, the bank entered into agreement to acquire Van Alstyne Financial Corporation and Summit Financial Enterprises, Inc.
The company has maintained an impressive acquisition spree, fortifying its footprint in various areas. These initiatives will likely keep boosting its earnings in the days ahead.
Shares of the company have gained 18.7%, over the past three months, compared to the 21.2% rise registered by the industry.
Currently, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Key Picks
City Holding Company’s CHCO shares have gained 13.7% over the past three months. Its earnings estimate for 2019 remained unchanged, over the past 60 days. The stock currently sports a Zacks Rank #1.
Franklin Financial Network, Inc’s FSB shares have appreciated 19.2% in three months’ time. Its current-year earnings estimate has been revised 1.9% upward, in 30 days’ time. At present, it flaunts a Zacks Rank of 1.
Shares of Southern National Bancorp of Virginia, Inc SONA have rallied 13.8% over the past three months. Its earnings estimate for the ongoing year remained unchanged, over the past 60 days. Currently, it sports a Zacks Rank of 1.
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