Market Overview

Renasant Corporation and First M&F Corporation Announce Definitive Merger Agreement


Renasant Corporation (NASDAQ: RNST) and First M&F Corporation (NASDAQ: FMFC) jointly announced today the signing of a definitive merger agreement pursuant to which Renasant Corporation ("Renasant" or "the Company") will acquire First M&F Corporation ("M&F"), a bank holding company headquartered in Kosciusko, Mississippi, and the parent of Merchants & Farmers Bank, a Mississippi banking corporation.

Upon completion of the transaction, the combined company will have approximately $5.8 billion in total assets and will rank as the 4th largest bank by deposits in Mississippi. The transaction will add $1.6 billion in assets, $1.4 billion in deposits and 36 full-service locations throughout Renasant's Mississippi, Alabama and Tennessee banking franchises. The merger will significantly increase the Company's deposit market share in the Birmingham and Memphis MSAs and the key Mississippi markets of Tupelo, Oxford and Starkville, and will provide entrance into the suburban markets surrounding Jackson, Mississippi. Additionally, the merger will provide a stable source of low-cost core deposits which will supplement and enhance Renasant's future growth activities. Finally, the merger will strengthen the Company's overall business lines by doubling its insurance operations and complementing its mortgage and wealth management divisions.

"We are excited for the opportunity to expand our reach within every Renasant region, double our insurance operations, and enhance our mortgage and wealth management divisions. This merger creates a stronger Renasant franchise that allows for not only new market entries and additional branch locations within our legacy markets, but provides the realization of significant cost savings through strategic branch consolidations and future earnings growth by combining two strongly competitive community banking institutions," said Renasant Chairman, President and Chief Executive Officer, E. Robinson McGraw. "M&F is a community bank with an operating philosophy centered on fast, simple and local service with a banking culture similar to our own. We believe that this partnership between these two strong, likeminded community banks will greatly benefit both Renasant's and M&F's current and future clients with our combined locations, services and product offerings."

According to the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, M&F common shareholders will receive 0.6425 shares of Renasant common stock for each share of M&F common stock, and the merger is expected to qualify as a tax-free reorganization for M&F shareholders. Based on Renasant's 10-day average closing price of $19.22 per share as of February 4, 2013, the aggregate common stock consideration is approximately $118.8 million or 119% of tangible book value per share. Under the proposed terms, the transaction is expected to be accretive to Renasant's 2013 estimated earnings per share with the estimated tangible book value dilution being earned back within 2.5 years.

Commenting on the transaction, Hugh S. Potts, Jr., Chairman and Chief Executive Officer of First M&F Corporation said, "The combination of M&F and Renasant, two banks with deep roots philosophically and physically, will create a much stronger competitor throughout our various markets. Our capacity and commitment to both personal and technological convenience will be materially enhanced by offering our clients all the products and services of a much larger financial services institution with the high degree of service found in a local community bank. The talents and efforts of both Renasant and M&F Bank families will now extend into a future filled with a sense of grateful history, tradition, optimism, and great promise."

The acquisition is expected to close during the third quarter of 2013 and is subject to Renasant and M&F shareholder approval, regulatory approval, and other conditions set forth in the merger agreement. Pursuant to the terms of the merger agreement, M&F Bank will merge with and into Renasant Bank immediately after the merger of M&F with and into Renasant. Subject to the receipt of regulatory approvals, it is expected that all M&F preferred stock and warrants held by the U.S. Treasury under the Community Development Capital Initiative will be redeemed prior to the closing of the merger.

Posted-In: News M&A


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