June 27, 2013 9:47:20 AM
JACKSON -- Shareholders overwhelmingly approved Renasant Corp.'s purchase of fellow Mississippi bank First M&F Corp. Tuesday.
Tupelo-based Renasant will pay $143 million in stock to First M&F shareholders. Under the deal, First M&F common shareholders will receive 0.6425 share of Renasant common stock for each share of First M&F common stock. Shareholders of First M&F -- based in Kosciusko -- will own about 20 percent of the merged bank.
More than 99 percent of shareholders of both companies approved the deal.
Renasant also will repay $30 million in federal bailout funds First M&F received.
Renasant spokesman John Oxford said the banks are still waiting on regulatory approvals, but expect the merger to close before Sept. 30. The federal money should be repaid before then.
Oxford said M&F Bank branches should be converted to Renasant branches before the end of the year.
The banks will also combine their insurance agencies.
The merger will create the fourth-largest bank in Mississippi, with $5.8 billion in assets. Renasant will have 76 bank offices in Mississippi, 14 in Alabama, 15 in Tennessee and 12 in Georgia. Nine overlapping branches are likely to close, though, Renasant said in an April stock filing, including three M&F offices in Tupelo and one each in Grenada, Starkville and Southaven. Renasant says it plans to close one of its own branches apiece in Oxford, Horn Lake and suburban Birmingham, Ala.
Oxford said some of those decisions aren't final yet, pending the consideration of leases and other items. "There will be some consolidation, I can confirm that for sure," he said.
The branch closures are part of Renasant's plan to boost profits by cutting 25 percent of First M&F's expenses. Renasant projects $12 million in savings by expense cuts in 2014, the first full year after the merger. Oxford couldn't say for sure whether employees would be laid off, or how many. Any personnel cuts could be concentrated at First M&F's home office in Kosciusko.
First M&F Chairman and CEO Hugh Potts, whose family has steered the bank for decades, plans to step down. First M&F President Jeffrey Lacey is expected to be named a "senior executive officer" at Renasant.
First M&F saw losses as loans deteriorated starting in 2008. It was hit with a regulatory order to shape up in 2009, and did so, pulling out of Florida and cutting nearly 20 percent of its employees. But even as regulatory scrutiny eased, prospects to increase profits in the near future remained uncertain, leading the bank to agree to sell out.
First M&F lost $118 million on bad loans starting in 2008, but Renasant estimated it would mark down the value of the bank's loans and foreclosed properties by another $60 million.