Houston, Texas-based Cadence, the parent of Cadence Bank, has agreed to merge with Tupelo, Mississippi-based BancorpSouth Bank (BXS).
The combined group will be the fifth largest bank headquartered in the combined nine-state footprint.
BXS has around 305 full-service branch locations and oversees around $24bn in assets.
Cadence managed $18.7bn in assets at the end of December 2020. Its subsidiary Cadence Bank has 98 branch locations.
The all-stock deal is said to offer improved opportunities for employees, customers, and shareholders, boosting balance sheet, capital, and reserve levels.
It will be based in both Tupelo as well as Houston. It will also have operations centres in Tupelo, and Birmingham, along with specialty sites in Macon, Starkville, and Houston.
The merged business will be led by Dan Rollins as the chairman and CEO and Paul Murphy as the executive vice chairman.
Its board will initially comprise 20 directors, including 11 from BancorpSouth and nine from Cadence.
Murphy noted: “The scale of our combined bank, our collective talent, our similar cultures and our footprint in some of the fastest-growing markets in the country have us extremely excited about the future.”
The deal offers Cadence shareholders 0.70 shares of BXS for each share held.
Upon merger completion, CADE shareholders are also entitled to receive a one-time special cash dividend of $1.25 per share.
BXS shareholders will own around 55% of the consolidated group, with shareholders of Cadence shareholders owning the remainder.
The transaction has already secured the nod from the firms’ boards and is currently pending the nod of regulators and shareholders.
The deal is expected to be immediately accretive to tangible book value per share upon closing in the final quarter of 2021.
Rollins stated: “This strategic merger will allow us to expand our reach and offerings with minimal overlap in our existing branch network. Culturally speaking, our mission and values align really well together. Mergers are all about people, and what’s important to note here is that our leadership teams are in sync.”