Renasant in Tupelo, Miss., has agreed to buy Commercial Holding in Paris, Tenn.
The $27.5 billion-asset Renasant said in a press release that it will pay $106.3 million in stock for the parent of the $1.1 billion-asset Commercial Bank & Trust. The seller will also pay a $35.7 million special dividend to its investors prior to closing.
The deal, which is expected to close in the first quarter, priced Commercial Holding at 163% of its tangible common equity.
Commercial Bank has nine branches, $648 million in loans and $983 million in deposits.
“For nearly 150 years, Commercial Bank has built a reputation across West Tennessee for exceptional service and deep community relationships – values that are central to who we are at Renasant,” Renasant President and CEO Kevin Chapman said in the release. “This partnership strengthens our presence in Memphis and provides solid, long-tenured deposit and wealth relationships throughout West Tennessee. We look forward to welcoming Commercial Bank’s employees, customers and shareholders to Renasant and to building on the foundation that Mott and his team have established.”
Mott Ford, Commercial Bank’s chairman and CEO, will join Renasant in a market executive role.
Renasant plans to cut a quarter of Commercial Holding’s annual noninterest expense. It expects to incur $19 million of after-tax merger-related expenses.
The deal should be 4% accretive to Renasant’s 2028 earnings per share. It will take about two years to earn back an estimated 1.5% dilution to Renasant’s tangible book value.
Keefe, Bruyette & Woods and Phelps Dunbar advised Renasant. Olsen Palmer and Alston & Bird advised Commercial Bank.