As of 31 March 2012, BancTrust operates 49 offices in Alabama and the Florida Panhandle with $1.3bn in loans and $1.8bn in deposits.
Trustmark chairman Daniel A Grafton said BancTrust is a respected financial institution with long-standing customer relationships.
"This transaction provides an excellent opportunity for Trustmark to enhance its franchise by expanding into attractive Alabama markets, including Mobile and Montgomery, as well as increase scale in our existing Florida Panhandle markets," Grafton added.
Commenting on the acquisition of BancTrust, Trustmark president and chief executive officer Gerard R Host said this is a strategic opportunity that will be meaningfully accretive to Trustmark’s earnings per share in 2013 and beyond.
"We have completed extensive due diligence, including multiple reviews of BancTrust’s loan portfolio and significant real estate collateral. We understand the inherent credit risk of the portfolio, and we have a proven record of managing real estate related assets in a challenging economic environment," Host said.
According to the terms of the merger deal, BancTrust common stock holders will receive 0.125 shares of Trustmark common stock for each share of BancTrust common stock in a tax-free exchange.
Trustmark will issue nearly 2,245,923 shares of its common stock for all issued and outstanding shares of BancTrust common stock. Based upon a price of $24.66 per share of Trustmark common stock, the transaction is valued at nearly $55.4m, or $3.08 per share of BancTrust common stock.
Trustmark is also considering buying back the $50m of BancTrust preferred stock and associated warrant issued to the US Department of Treasury under the Capital Purchase Program.
BancTrust president and chief executive officer W Bibb Lamar said the combination created by the two companies will enable the firm to better serve its customers through a broader array of products and services.
"Trustmark’s reputation, financial strength and capabilities will enhance our ability to meet the expanding needs of our customers. Our shareholders will be receiving shares of a very strong, successful banking company," Lamar commented.
After obtaining concerned regulatory approvals and other customary closing conditions, the deal is expected to complete in the fourth quarter of 2012.
Trustmark received the advice from the investment banking firm Sandler O’Neill + Partners, as well as the law firm Wachtell, Lipton, Rosen & Katz.
BancTrust was advised by the investment banking firm Keefe, Bruyette & Woods, and the law firms Hand Arendall and DLA Piper (US).
