By Ted Carter
Indianola’s Planters Bank & Trust Co. has completed its acquisition of Covenant Bank of Clarksdale, raising its assets to more than $1 billion and extending its reach into North Mississippi.
Acquiring the $222 million Covenant made Planters the ninth largest bank in Mississippi and the first Delta-based bank to exceed $1 billion in assets. It went into the acquisition with assets of $813 million and deposits of $733 million.
Planters’ net income at the close of the third quarter of 2015 was $6.6 million, according to the FDIC.
The acquisition recently received federal regulatory approval from the FDIC, the Federal Reserve Board of Governors and the Securities and Exchange Commission. The FDIC regulates both banks.
The acquisition gives Planters five locations to add to its current 14. The 16-year-old Covenant, a $222 million bank, has two locations in Clarksdale, two in Batesville and one each in Southaven and Tunica.
Covenant had $174 million in deposits at the end of 2015’s third quarter and net income of $484,000, FDIC reports show.
The acquisition marks a change in Planters’ growth strategy, the 96-year-old bank having started banks in markets such as Greenville and Cleveland from the ground up. Founded in Ruleville in 1920, Planters opened in its current home base of Indianola in 1940. From there, it branched into Sunflower and Louise in the early 1950s and expanded to Greenville in 1970.
One break with the organic growth occurred in 1986, when it bought the Inverness branch of Deposit Guaranty National Bank. The Cleveland branch opened in 1996 and branches in Greenwood and Leland in 1999.
An opportunity to gain efficiencies to offset the rising cost of doing business and meeting new regulatory rules influenced the decision to buy Covenant, Randy Randall, Planters president and COO, said in an interview Tuesday.
“In today’s regulatory environment, banks are finding it important to integrate capital as much as they can,” Randall said.
The lure of new markets, especially in fast-growing Desoto County, also influenced the purchase decision, he said. “We saw this as a great opportunity to move northward to six or seven counties in the Northwest Mississippi region.”
Conversion of Covenant locations to Planters Bank is scheduled for the weekend of March 18. The locations will reopen March 21 under the Planters name.
All former Covenant branches will remain open and branch presidents will remain in place. Covenant’s top management team of Willis Frazer, Freddie Britt and Charles Burnett will join Planters’ leadership, Randall said.
Planters’ current workforce of about 165 will grow to more than 225 people, according to Randall.
As the takeover nears, Covenant customers will receive a conversion guide. The guide will also be online at the websites of both banks: covenantbank.net and planters-bank.com.
Planters did not disclose financial terms of the acquisition.
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