- The Mississippi-based bank merger is a $1.2 billion transaction.
At the first of the year, two Mississippi-based bank competitors will unite to become a stronger player in southeastern banking operations.
Tupelo-based Renasant Corporation and Hattiesburg-based The First Bancshares will unite to become a six-state southeastern banking franchise with approximately $25 billion in total assets, $18 billion in total loans, and $21 billion in total deposits, as of June 30.
The merger, unanimously approved by both banks, was announced July 29 as part of all-stock transaction valued at $1.2 billion, based on Renasant’s July 26 closing stock price. The First’s shareholders will receive one share of Renasant for each one held, valuing the lender at $37.09 per share. It represents a 20.4 percent premium to The First’s Friday close. Also, all options of The First will be cashed out at their in-the-money value at closing.
After the July 26 bell, The First’s shares ascended 5.7 percent, while Renasant shares dropped 1 percent.
Renasant, established in 1904, has about $17.5 billion in total assets and operates 185 banking, lending, mortgage and wealth management offices in Mississippi, Alabama, Florida, Georgia, Tennessee, and the Carolinas.
The First brings to the table $8 billion in total assets, $5.3 billion in total loans, and $21 billion in total deposits, as of June 30, and 111 branches across Mississippi, Alabama, Florida, Georgia and Louisiana.
If the deal falls through under certain circumstances, The First is liable for a $40 million termination fee.
Distinctly, Renasant priced a public offering of 6.3 million shares at $32 per share to raise $200 million. The merger is expected to have a positive long-term impact on Renasant’s key profitability and operating ratios.
Renasant CEO Mitch Waycaster pointed out that both banks have expanded “into some of the most dynamic, fastest-growing markets in the southeast.”
“Together, we create a more valuable company with the meaningful scale needed to compete in today’s operating environment,” he said.
M. Ray “Hoppy” Cole, CEO of The First, who will join Renasant as a senior executive vice president and board member, said The First has always operated with a community-first mindset, building strong, trust-based relationships with our clients and the markets we serve.
“Going forward, we’re excited for our customers, bankers, and shareholders to experience our next chapter as we join Renasant and form a leading southeast regional bank with the scale and capabilities of a larger bank, while maintaining the community bank touch our customers have come to expect,” Cole said.
In connection with the announcement of the merger, Renasant revealed its adoption of a Community Benefit Plan. Under this plan, effective upon merger completion, Renasant is committed to an $10.3 billion, five-year plan to advance economic growth, access to financial services, and inclusion in Renasant’s and The First’s combined footprint.
Lynne Jeter
