TUPELO, Mississippi – Affirmative shareholder votes Tuesday will clear the way for Renasant to begin a $119 million acquisition of Kosciusko’s First M&F Corp. in a move designed to give the $4.2 billion regional bank a Central Mississippi presence and increased market shares in the northern part of the state as well as in Tennessee and Alabama.
Tupelo’s Renasant announced the acquisition of First M&F, parent of the $1.6 billion Merchant & Farmers Bank, in February, with terms that included a $119 million common stock transaction. The combined company will make Renasant the fourth largest bank in Mississippi. In total, Renasant will gain 36 locations in Mississippi, Alabama and Tennessee, though how many will remain open has not been decided, Renasant officials say.
With a green light from shareholders of both institutions Tuesday, Renasant will seek to complete the deal by the third quarter and begin convergence of banking operations in the final quarter. All locations will carry the Renasant name upon completion of the convergence.
Renasant will gain 36 locations, though how many remain open will depend on overlap between the two. Renasant locations will also be examined for overlap and some could be closed, said Scott Cochran, president of Renasant’s Mississippi Division.
One of Renasant’s two Oxford branches will be merged into the First M&F location on The Square in Oxford, Cochran said.
With the acquisition, Renasant gains First M&F’s metro Jackson branches in Flowood, Brandon
Pearl and Clinton.
Just what the merged operations mean for the 100 or so employees at First M&F’s K Kosciusko is not yet clear. Some will continue to serve the combined bank’s operation through remote locations. Some job cuts are planned, however, according to Renasant.
Hugh Potts, chairman and CEO of First M&F, will step down after 40 years at First M&F. Potts said previously that the merger will give First M&F customers a menu of services that a much larger financial institution can offer and “a high degree of service found in a local community bank.”
With the acquisition, Renasant will grow its property & casualty insurance operations by about a quarter and expand its mortgage lending as well.
Matt Olney, analyst with Stephens Inc., said he expects the acquisition to propel Renasant to 16 percent increase in earnings per share, from $1.47 to $1.71. Olney set a EPS price target of $1.89 for 2015.