BancorpSouth To Buy Texas First, Expand In Central Texas
Zacks Investment Research | Sep 23, 2019 10:29PM ET
BancorpSouth Bank (NYSE:BXS) announced plans to merge with Texas First Bancshares, with an objective of boosting presence in the Central Texas region. Notably, this agreement provides a collar with respect to the total deal value ranging from $38.8-$46.5 million. Upon receiving all the necessary regulatory approvals, the deal is expected to close in first-half 2020.
Founded in 1906, the company and its subsidiary, Texas First State Bank, operate through six banking offices in the Waco, Texas and Killeen-Temple, Texas metropolitan statistical areas. As of June 2019-end, the group reported total assets, loans and deposits of $391.3 million, $162.6 million and $356.6 million, respectively.
Per the terms of the agreement, BancorpSouth will issue 1,065,000 shares of common stock and pay $13 million in cash, for all outstanding shares of Texas First, subject to certain conditions and potential adjustments.
In order to maintain the deal value within specified collar, the number of shares of BancorpSouth common stock may be adjusted downward or the cash consideration may be adjusted upward.
With this deal, BancorpSouth seeks to boost its deposit market share and exploit opportunities for continued expansion along the rapidly growing I-35 corridor between Austin and Dallas/Fort Worth, TX.
Prior Acquisitions Closed in 2019
In September, the company completed proposed mergers with Van Alstyne Financial Corporation and Summit Financial Enterprises. With this merger, BancorpSouth will fortify foothold in Dallas-Fort Worth, TX (CMSA) and Florida.
Further, in April, it acquired Jackson, AL-based Merchants Trust, Inc. and its wholly-owned subsidiary, Merchants Bank, along with Casey Bancorp, Inc. and its arm, Grand Bank of Texas.
Our Take
BancorpSouth’s inorganic moves reflect its strong capital position, and focused approach to expand reach and product offerings. However, elevated merger-related expenses and investments in digital offerings might deter its bottom-line growth in the near term.
Year to date, the stock has rallied nearly 12% compared with 16.8% growth recorded by the Original post
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