BancorpSouth on Monday (Sept. 23) continued its acquisition spree with the signing of a definitive merger agreement with Texas First Bancshares Inc., expanding the Tupelo, Miss.-based regional banking group’s presence in growing rural and urban markets in central Texas.
Under terms of the deal, BancorpSouth will issue 1,065,000 shares of common stock, plus $13million in cash, for all outstanding shares of Texas First, which was founded in 1906 in Riesel, Texas. Texas First operates six full-service banking offices in the Waco, Texas and Killeen-Temple, Texas metropolitan statistical areas.
The terms of the agreement also provides a collar with respect to the deal value ranging from $38.8 million to $46.5 million. If necessary, bank officials said, the number of shares of BancorpSouth common stock may be adjusted downward or the cash consideration may be adjusted upward to accommodate boundaries of the collar.
“We’re looking forward to welcoming Texas First’s customers, teammates and shareholders to the BancorpSouth family,” stated BancorpSouth Chairman and CEO Dan Rollins. “This merger is a great fit both geographically and culturally for the bank. It will allow us to enhance our market presence in Central Texas, as well as add a great team of bankers who share our focus on customer commitment and community involvement.”
BancorpSouth officials said the acquisition of Texas First will expand the bank’s presence in central Texas by increasing the bank’s deposit market share and providing opportunities for continued expansion along the rapidly growing I-35 corridor between Austin, Texas and Dallas/Fort Worth, Texas.
As of June 30, 2019, Texas First reported total assets of $391.3 million, total loans of $162.6 million and total deposits of $356.6 million. Upon the consummation of the merger, BancorpSouth will have 76 full-service banking offices, five mortgage loan production offices and four insurance offices in Texas with total deposits in Texas of approximately $3.8 billion and total loans of approximately $4.3 billion. The merger has been unanimously approved by the boards of directors of both companies. The merger is anticipated to close during the first half of 2020, pending the receipt of regulatory approval, the approval of Texas First shareholders and the satisfaction of other customary closing conditions.
BancorpSouth’s purchase of the small Texas community bank continues a string of strategic acquisitions after the 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 regional bank with more than 40 branches in Arkansas has grown its southern footprint with five acquisitions in Alabama, Louisiana, Florida and Texas that together have total assets of nearly $4 billion.
Over the Labor Day weekend, BancorpSouth completed its proposed acquisition of Panama City, Fla.-based Summit Financial Enterprises Inc. and Van Alstyne (Texas) Financial Corp. As of June 30, 2019, Summit Bank and Van Alstyne Financial, operative under the Texas Star name, collectively reported total assets of $905.6 million, total loans of $610.7 million and total deposits of $799.8 million.
BancorpSouth officials said the Summit deal will 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. 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 that 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.
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. BancorpSouth shares (NYSE: BXS) closed Monday at $29.37, down four cents. During the past 52 weeks the share price has ranged between $34.75 and $24.30.