By Dennis Seid/NEMS Daily Journal
Renasant Corp. will become the state’s fourth-largest bank by deposits with its acquisition of First M&F Corp.
The deal, announced Thursday, is a $119 million stock transaction, with First M&F shareholders getting 0.6425 shares of Renasant stock for each share of M&F stock.
Both companies’ boards have approved the deal, which still must meet shareholder and regulatory approval. Renasant expects to close the merger by the third quarter of this year.
However, the bigger question will be how the merger will affect overlapping operations of Renasant and M&F branches.
Seven of M&F’s 36 branches are within a mile of a Renasant branch, and 13 are within 5 miles.
Renasant has 75 offices in Mississippi, Alabama, Tennessee and Georgia. First M&F’s locations are in Mississippi, Alabama and Tennessee.
“During this transition, we’ll look at every location and carefully review several factors to determine their strategic fit,” said John Oxford, Renasant’s director of external affairs.
The merger is expected to result in cost savings of $12 million a year.
Remaining M&F locations will adopt the Renasant brand.
With the merger, Renasant said it will double the size of its insurance operations and strengthen its mortgage and wealth management divisions.
“This merger creates a stronger Renasant franchise that allows for not only new market entries and additional branch locations within our legacy markets, but provides the realization of significant cost savings through strategic branch consolidations and future earnings growth by combining two strongly competitive community banking institutions,” said Renasant Chairman, President and CEO Robin McGraw.
First M&F Chairman and CEO Hugh Potts Jr. will remain in a management role after the merger, Renasant said.
The combined company will have $5.8 billion in total assets and $4.9 billion in total deposits. Renasant accounts for the bulk of the figures, with $4.2 billion in assets and $3.5 billion in deposits.
Renasant said the merger would grow its market share in Birmingham and Memphis, as well as “key” Mississippi markets in Tupelo, Oxford and Starkville.
In its home base of Lee County, Renasant already has the largest market share with 36 percent. Adding First M&F’s operations will give it a 43 percent slice.
Renasant (Nasdaq: RNST) shares closed Thursday at $18.96, down 48 cents.