Bulletin: BancorpSouth Bank's Announced Mergers Will Increase Assets But Not Meaningfully Alter Its Business Strategy

NEW YORK (S&P Global Ratings) Nov. 14, 2018--BancorpSouth Bank (BXS; BBB/Stable/A-2) announced on Nov. 13 it would acquire Dallas-based Casey Bancorp and Alabama-based Merchants Trust Inc. S&P Global Ratings expects these relatively small acquisitions, which in total we estimate will increase BXS's assets by about 3.5%, will deepen BXS's franchise in Texas and in Alabama. Nevertheless, we do not expect they will meaningfully change BXS's loan and deposit mix, nor alter its business strategy. The mergers are subject to customary regulatory and shareholder approvals, and we believe they introduce some execution risks for BXS, as well. Since the mergers will be paid for mostly with stock, as well as a small cash component, we expect they will slightly reduce BXS's

...NEW YORK (S&P Global Ratings) Nov. 14, 2018--BancorpSouth Bank (BXS; ###/Stable/A-2) announced on Nov. 13 it would acquire Dallas-based Casey Bancorp and Alabama-based Merchants Trust Inc. S&P Global Ratings expects these relatively small acquisitions, which in total we estimate will increase BXS's assets by about 3.5%, will deepen BXS's franchise in Texas and in Alabama. Nevertheless, we do not expect they will meaningfully change BXS's loan and deposit mix, nor alter its business strategy. The mergers are subject to customary regulatory and shareholder approvals, and we believe they introduce some execution risks for BXS, as well. Since the mergers will be paid for mostly with stock, as well as a small cash component, we expect they will slightly reduce BXS's capital ratios, though not enough to change our strong capital assessment. We project that BXS's S&P Global Ratings risk-adjusted capital ratio will remain slightly above 10% by year-end 2020, given we see continued strong earnings....

Bulletin