06:55 AM EDT, 07/30/2024 (MT Newswires) -- Renasant ( RNST ) will acquire The First Bancshares (FBMS) in an all-stock deal worth roughly $1.2 billion, expanding its footprint in the US southeast.

Investors of The First will receive one share of Renasant ( RNST ) stock for each share owned, the lenders said in a joint statement late Monday. This implies a transaction value of about $37.09 per share of The First, based on Renasant's ( RNST ) closing price on Friday. All options of The First will be cashed out at their in-the-money value at the completion of the deal, according to the statement.

Shares of Renasant ( RNST ) declined 4.7% in premarket activity Tuesday, while The First rose 7.7%.

The deal, which will see The First merge into Renasant ( RNST ), is projected to create a six-state southeastern banking franchise with roughly $25 billion in assets, $18 billion in loans and $21 billion in deposits, according to the lenders. The merger requires approval from regulators and the banks' shareholders and is expected to close in the first half of next year.

"As with Renasant ( RNST ), The First has expanded into some of the most dynamic, fastest growing markets in the southeast," Renasant ( RNST ) Chief Executive Mitch Waycaster said in the joint statement. "Together, we create a more valuable company with the meaningful scale needed to compete in today's operating environment."

Excluding one-time transaction costs, the merger is estimated to be immediately accretive to Renasant ( RNST ) earnings per share. The First has 111 branches across Mississippi, Louisiana, Alabama, Florida and Georgia, and the deal is expected to expand Renasant's ( RNST ) locations, services and products, President Kevin Chapman said.

"RNST gains a quality franchise within its existing southeastern footprint and also gains presence in higher growth markets," Truist Vice President Brandon King said in a note. Still, he said the deal's pricing and common equity raise at $32 a share "dull the financial merits of this deal, in our view."

Renasant ( RNST ) said separately on Monday it raised $200 million in an equity offering of 6.25 million shares, with proceeds earmarked for acquisitions and investments. Underwriters have an option to buy another 937,500 shares, the firm said.

The First CEO Ray Cole will become a senior executive vice president and join the board of directors of Renasant ( RNST ) and its Renasant Bank unit. Renasant ( RNST ) also announced a $10.3 billion five-year community benefit plan to promote economic growth, access to financial services and inclusion in the lenders' combined footprint.

Price: 34.00, Change: -1.95, Percent Change: -5.42