Renasant Corp, Heritage Financial To Merge

(RTTNews) - Renasant Corp (RNST) said Wednesday it will buy Heritage Financial Group Inc (HBOS) in an all stock deal.

As per the terms of the deal, which has been approved by the Boards of both companies, Heritage stockholders will receive 0.9266 shares of Renasant common stock for each share of Heritage common stock, and the merger is expected to qualify as a tax-free reorganization for Heritage stockholders.

Based on Renasant's 20-day average closing price of $29.14 per share as of December 9, 2014, the aggregate deal value is about $258 million or $27.00 per share.

The deal is expected to be immediately accretive to Renasant's estimated earnings per share with the estimated tangible book value dilution being earned back in less than two years and an IRR which exceeds internal thresholds.

The deal is expected to close during the third quarter of 2015 and is subject to Renasant and Heritage stockholder approval, among others.

Pursuant to the terms of the merger agreement, HeritageBank will merge with and into Renasant Bank immediately after the merger of Heritage with and into Renasant.

Upon completion of the deal, the combined company will have about $7.5 billion in assets, $5.2 billion in gross loans and $6.1 billion in deposits with 171 banking, mortgage, insurance, wealth management and investment offices in Mississippi, Alabama, Tennessee, Georgia and Florida. Heritage Financial, a bank holding company headquartered in Albany, Georgia, is the parent of HeritageBank of the South, a Georgia savings bank.

The deal will add to Renasant about $1.9 billion in assets, $1.2 billion in loans and $1.3 billion in deposits, and 48 banking, mortgage and investment offices in Alabama, Georgia and Florida as of September 2014.

Renasant said the merger will solidify the company as one of the largest community banks operating in the Southeast with significant other business lines including insurance, mortgage and wealth management.

The deal also enhances the company's presence in the metro markets of Birmingham, AL and Atlanta, GA with minimal existing overlap while also providing entry into new markets, such as Albany, GA, Statesboro, GA, Savannah, GA, Auburn, AL, Ocala, FL and Gainesville, FL.

Also, Renasant said the deal would provide a stable source of low-cost core deposits that are expected to support and enhance Renasant's future growth activities.