Renasant in Tupelo, Miss., has agreed to buy The First Bancshares in Hattiesburg, Miss.
The $17 billion-asset Renasant said in a press release that it will pay $1.2 billion in stock for the $8 billion-asset First. The deal, which is expected to close in the first half of next year, priced First at 184% of its tangible book value.
Separately, Renasant said it will sell $200 million of common stock at $32 each.
First has $6.6 billion of deposits and 111 branches in five states.
“As two of the largest banks headquartered in Mississippi, each with a footprint across the Southeast, both Renasant and The First have grown to know and respect each other’s operating philosophy, dedication to providing best-in-class customer service and commitment to the communities in which we operate,” said Renasant CEO Mitch Waycaster said in a press release.
“As with Renasant, The First has expanded into some of the most dynamic, fastest growing markets in the Southeast,” Waycaster added.. Together, we create a more valuable company with the meaningful scale needed to compete in today’s operating environment.”
Hoppy Cole, First’s president and CEO, will become a senior executive vice president. Four First directors will join Renasant’s board.
Renasant plans to cut about 30% of First’s annual noninterest expenses. It expects to incur $75 million in merger-related expenses.
Excluding merger-related costs, the deal is expected to be immediately accretive to Renasant’s earnings per share. It should take three years for Renasant to earn back an estimated 9% dilution to its tangible book value.
Renasant announced the creation of a five-year, $10.3 billion community benefit plan.
Stephens and Covington & Burling advised Renasant. Keefe, Bruyette & Woods and Alston & Bird advised First.