BankTrust purchased: Merger with Trustmark valued at $55.4 million

Published 11:09 pm Tuesday, May 29, 2012

Mobile-based BancTrust, the holding company that operates BankTrust Bank, announced Tuesday that it has been purchased by Trustmark Corp. in a stock deal valued at approximately $55.4 million.

The move is designed to help Mississippi-based Trustmark expand into both the Florida and Alabama markets.

“BancTrust is a respected financial institution with long-standing customer relationships,” Trustmark Chairman Daniel A. Grafton said in a news release. “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.”

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The deal values BancTrust stock at $3.08 per share based on Trustmark’s closing stock of $24.66 Friday. This is a 62 percent premium to BancTrust’s closing price of $1.90 on Friday.

According to media releases Tuesday morning, each BancTrust stockholder will receive 0.125 shares of Trustmark common stock for each BancTrust share they own.

In a conference call with market analysts, Trustmark President and CEO Gerald Host said the main job for Trustmark right now is easing the transition for BankTrust customers and employees.

“We are going to do everything we can to take care of the BankTrust customers and the BankTrust associates as we went into this. That is going to be our primary focus,” Host said in response to a question from an analyst asking if this move into Alabama is just the first step into moving into the Georgia market. “If there are opportunities, certainly we will look into them, but for right now, our focus is going to be working through the consolidation of BancTrust and Trustmark.”

BancTrust has 49 offices in Alabama and Florida, with $1.3 billion in loans and $1.8 billion in deposits as of March 31. Trustmark, based in Jackson, Miss., has more than 170 offices in Florida, Mississippi, Tennessee and Texas.

“We are delighted to become a part of the Trustmark organization and believe that the combination created by our two companies will enable us to better serve our customers through a broader array of products and services,” BancTrust President and CEO Bibb Lamar Jr. said in a company release. “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.”

Trustmark also said it plans to buy back $50 million in preferred stock and warrants from the Treasury Department. The stock and warrants were issued by BancTrust as part of the government’s bank bailout during the 2008 financial crisis.

According to media and business news outlets, both companies’ boards have unanimously approved the transaction, which is targeted to close in the fourth quarter. The acquisition still needs the approval of BancTrust shareholders.