BancorpSouth said it has completed its previously announced deals valued at nearly $200 million to expand its operations into the fast-growing Florida Panhandle and Dallas-Ft. Worth markets.
After gaining regulatory approvals from the Federal Deposit Insurance Corp. (FDIC) to complete its proposed acquisition of Panama City, Fla.-based Summit Financial Enterprises Inc. and Van Alstyne (Texas) Financial Corp. on Aug. 14, Tupelo, Miss-based BancorpSouth said those deals were effectively closed over the Labor Day weekend on Sunday, Sept. 1.
“We’re pleased to combine with these two great community banks that share our core values,” said BancorpSouth Chairman and Chief Executive Officer Dan Rollins. “These partnerships allow us to build scale and add talented bankers in strategically important markets for us in Florida and Texas.”
BancorpSouth officials said the Summit deal will substantially expand BancorpSouth’s presence in the Florida Panhandle area, where it now has one full-service banking office in Miramar Beach and one mortgage loan production office in Crestview. Operating under the Summit Bank name, the Florida community bank offers a wide range of personal and business accounts, lending solutions, wealth management and investment services through its four offices in Panama City, Panama City Beach, Fort Walton Beach and Pensacola, Florida.
Texas Star, which was founded in 1890 in Van Alstyne, operates eight locations across Collin and Grayson counties in Texas, and one loan production office in Durant, Okla. BancorpSouth officials said the acquisition will expand BancorpSouth’s presence in the Dallas-Fort Worth area, giving it a total of seven full-service banking locations in the market, as well as additional locations north of Dallas and one branch in Oklahoma.
As of June 30, 2019, Texas Star and Summit collectively reported total assets of $905.6 million, total loans of $610.7 million and total deposits of $799.8 million. Under the terms of the merger agreement with Summit, BancorpSouth Bank will issue 2.5 million shares of BancorpSouth common stock and $20 million in cash for all outstanding shares of Summit stock. The deal is valued at between $95 million to $107.5 million, based on a collar agreement that considers variable risks.
Similarly, BancorpSouth will issue 2.1 million shares of company stock and $20.5 million in cash for all outstanding shares of Van Alstyne stock. That deal also includes a collar agreement that values the acquisition in the range between $80 million to $86.7 million. On the high end, BancorpSouth will pay out $194.2 million for both banks.
BancorpSouth’s purchase of the small community banks in Texas and Florida continues a string of strategic acquisitions after the Mississippi banking group emerged from a four-year operational hiatus due to regulatory restrictions. In 2014, the FDIC downgraded the bank’s Community Investment Act rating after the Consumer Financial Protection Bureau (CFPB) and the Department of Justice announced a joint action against BancorpSouth for discriminatory mortgage lending practices that harmed African Americans and other minorities.
Since early 2018, however, the Mississippi regional bank with more than 40 branches in Arkansas has grown its southern footprint with five key acquisitions across Alabama, Louisiana and Texas that together have total assets of more than $3.5 billion.
In April, the Mississippi regional bank group closed on a deal to acquire Casey Bancorp Inc. and Merchants Bank in the Dallas area and Jackson, Ala., markets, respectively. Those two community banks had assets exceeding $550 million and total loans and deposit, of $309 million and $507 million, respectively.
Today, BancorpSouth has nearly $20 billion in assets with more than 300 full-service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas and Illinois.