Little Rock-based Bank of the Ozarks announced Thursday that it has entered into a definitive agreement and plan of merger with Summit Bancorp, Inc. and its wholly-owned bank subsidiary Summit Bank.
Bank of the Ozarks will acquire the Arkadelphia-based bank for $216 million.
Summit Bank operates 23 banking offices and one loan production office in nine Arkansas counties. At December 31, 2013, Summit Bank had approximately $1.2 billion of total assets, $778 million of loans and $994 million of deposits.
The move will push Bank of the Ozarks to more than $6 billion in total assets.
Summit Bank originated from a charter granted in 1996 to Horizon Bank of Columbia County, Arkansas. In February 2000, its name was changed to Summit Bank and expansion began throughout southwest and central Arkansas.
“I’m proud of the organization we’ve built over the past fourteen years at Summit Bank and equally proud to join forces with Bank of the Ozarks. We are very pleased to partner with one of the nation’s most respected banking organizations,” said Summit Bank Chairman and CEO Ross Whipple.
“Today, two premier Arkansas banking organizations, who share very similar philosophies and cultures, are joining to create an even more powerful banking franchise for our customers, employees and shareholders,” said George Gleason, Chairman and CEO of Bank of the Ozarks. “Bank of the Ozarks has built its Arkansas presence primarily in the northern and central parts of the state, while Summit Bank has built a strong presence primarily in southwest and central Arkansas. The synergies created by combining these two complementary, high performing community banks are significant.”
“Given the similarities in our cultures and business models, this combination should be very positive and a smooth transaction for our combined customers and employees. Our customers will undoubtedly benefit from our expanded offices and product offerings,” Gleason added.
DETAILS FOR SHAREHOLDERS
Both bank’s boards have approved the deal.
Under the terms of the agreement, each outstanding share of common stock of Summit will be converted, at the election of each Summit shareholder, into the right to receive shares of the Bank of the Ozark’s common stock, plus cash in lieu of any fractional share, or the right to receive cash, all subject to certain conditions and potential adjustments, provided that at least 80% of the merger consideration paid to Summit shareholders will consist of shares of the company’s common stock.
The number of company shares to be issued will be determined based on Summit shareholder elections and the company’s ten day average closing stock price as of the fifth business day prior to the closing date, ranging between $43.58 per share and $72.63 per share.
Upon the closing of the transaction, Summit will merge into Bank of the Ozarks. Completion of the transaction is subject to certain closing conditions, including customary regulatory approvals and the approval of the shareholders of Summit.
The transaction is expected to close by the end of the second quarter of 2014.
Following closing of the transaction, Ross Whipple is expected to serve on the board of directors for Bank of the Ozarks bank and holding company.
Bank of the Ozarks said this is the company’s eleventh acquisition transaction since March 2010 and the largest in its history.
Summit was advised by the investment banking firm of Stephens Inc. and the law firm of Dover Dixon Horne PLLC. Bank of the Ozarks, Inc. was represented by the law firm of Kutak Rock LLP.
Bank of the Ozarks acquisition of Summit Bank adds another dimension to consolidations in Arkansas’ banking sector.
Last year, Home Bancshares closed on a $286 million acquisition of Liberty Bancshares. Simmons First National Bank acquired Metropolitan National Bank for $53.6 million.