BancorpSouth Inc. Announces Merger With Merchants Capital Corp.TUPELO tupelo, in botany tupelo: see black gum. Tupelo, city, United States Tupelo (t  `pĭlō, ty , Miss.--(BUSINESS WIRE)--May 4, 1998---The holding companies of Bank of Mississippi, headquartered in Tupleo, and Merchants Bank of Vicksburg have entered into a binding agreement to merge. BancorpSouth Inc., (NYSE NYSE See: New York Stock Exchange : BXS BXS Brussels Stock Exchange BXS Bronx X-Ray Server ) holding company of BancorpSouth Bank which does business in Mississippi as Bank of Mississippi, and Merchants Capital Corp., holding company of Merchants Bank, today announced the signing of a definitive agreement to merge Merchants Capital Corp. into BancorpSouth, subject to approval of the shareholders of Merchants Capital Corp. and federal and state regulatory authorities. Under the terms of the agreement, shareholders of Merchants Captial will receive 1.884 shares of BancorpSouth Inc. common stock in exchange for each share of Merchants Captial Corp. common stock. The exchange rate will be adjusted to reflect BancorpSouth's previously announced two-for-one stock split effected in the form of a 100% stock dividend that will be issued on May 15, 1998. On a post-split basis, Merchants' shareholders will receive 3.768 shares of BancorpSouth stock for each share of Merchants' Captial Corp. common stock. The subsidiary banks of the two bank holding companies will also be merged. The transaction will be structured as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and as a tax-free exchange tax-free exchange An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged. to the shareholders Merchants Capital. In connection with the transaction, BancorpSouth has been granted an option to acquire up to 19% of the common stock of Merchants, subject to certain limitations, terms, and conditions set forth in a stock option agreement between Merchants and BancorpSouth. The merger represents an in-market transaction between BancorpSouth and Merchants. The combination of the two banks will give Bank of Mississippi a more significant share of the Vicksburg and Warren County Warren County is the name of fourteen counties in the USA. They are named after General Joseph Warren, who was killed in the Battle of Bunker Hill in the American Revolutionary War:
As of March 31, 1998, BancorpSouth's total assets were $4.4 billion while Merchants Capital Corp. assets totaled $222.2 million. The combining of the two banks is expected to result in a reduction of duplicative operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . The merger is expected to be slightly dilutive to BancorpSouth's 1998 earnings per share but antidilutive in 1999. Based on the closing price of BancorpSouth's common stock as traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , the transaction is valued at $63,136,000. BancorpSouth has a total of 134 offices serving 55 Mississippi and Tennessee communities. BancorpSouth Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Aubrey B. Patterson said, "Merchants Bank is a truly outstanding institution. It is a bulwark of the Vicksburg business community, and Merchants' philosophy of planting deep roots in the Vicksburg market mirrors that of Bank of Mississippi. Like us, they have strong ties to the state and local economy, and they will bring great strength to our company. Together, we can lend a higher level of service to the Vicksburg, Edwards and Utica markets." Merchants' Chairman and CEO Howell N. Gage said, "Merchants is quite pleased to affiliate with such a fine company and such capable people. Bank of Mississippi is an extremely well run bank which shares our commitments of service to customers, concern for employees and development of the communities we serve. This merger will allow us to carry forward these commitments while remaining viable and competitive in the rapidly changing financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry." Statements are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are based on management's current expectations and the current economic environment. Actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. Additional discussions of factors affecting BancorpSouth Inc.'s business and prospects are contained in the company's periodic filings with the Securities and Exchange Commission. -0- Based on IBES IBES See: Institutional Brokers Estimate System consensus estimates of earnings for 1998 and 1999, the merger of BancorpSouth Inc. and Merchants Capital is expected to impact BancorpSouth's earnings as follows: 1998 - Dilutive by 3.0% 1999 - Accretive by 1.3% 14% Expected synergies (100% cost) CONTACT: BancorpSouth Inc., Tupelo Harry Baxter, 601/680-2410 http://www.bancorpsouth.com or Merchants Captial Corp. Howell N. Gage, 601/630-2211 |
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