Bank OZK announced Wednesday (July 1) that it has entered into two separate Purchase and Assumption Agreements to sell its only two Alabama branches.
The bank has agreed to sell its Mobile, Alabama branch to Merchants & Marine Bank, a wholly owned subsidiary of Merchants & Marine Bancorp, Inc. headquartered in Pascagoula, Mississippi.
It will sell its Geneva, Alabama branch to 22nd State Bank, a wholly owned subsidiary of FEB Bancshares, Inc., headquartered in south Alabama.
Terms of the sales were not disclosed.
Pursuant to the terms of the Purchase and Assumption Agreements, M&M and 22nd State have agreed to assume certain deposit liabilities and to acquire certain loans, as well as cash, real property, personal property and other fixed assets associated with the Mobile Branch and Geneva Branch, respectively.
Subject to obtaining the necessary regulatory approvals, the pending sales are expected to close in the fourth quarter of 2020 and should result in small gains on sale.
The deposit and loan balances at the Mobile Branch as of March 31, 2020 were approximately $26 million and $23 million, respectively. The deposit and loan balances at the Geneva Branch as of March 31, 2020 were approximately $66 million and $8 million, respectively.
Bank OZK said it was “difficult to operate efficiently within Alabama with just two branches that are in separate markets.” After the transactions close, Bank OZK will have no branch offices in the state of Alabama.
DD&F Consulting Group served as financial advisor to the bank in the transactions. ProBank Austin served as financial advisor and Bass, Berry & Sims PLC served as legal advisor to M&M in the Mobile Branch transaction. Olson Palmer LLC served as financial advisor and Jones Walker LLP served as legal advisor to 22nd State in the Geneva Branch transaction.