Bank of the Ozarks in Little Rock, Ark., is set to catapult over $10 billion in assets after agreeing to buy Community & Southern Holdings in Atlanta.
The $9.3 billion-asset Bank of the Ozarks said in a press release Monday that it will pay nearly $800 million, or $20.50 a share, in stock for the $4.4 billion-asset Community & Southern. The deal, set to close by the second quarter, values Community & Southern at 200% of its tangible book value.
Bank of the Ozarks, which will have nearly $14 billion in assets after completing the purchase, said it expects the deal to be immediately accretive to its tangible book value per share. The transaction should start to be accretive to Bank of the Ozarks' diluted earnings per share about 12 months after the transaction closes, including merger-related expenses.
Community & Southern is expected to incur up to $25 million in merger-related expenses before the deal's closing, while Bank of the Ozarks is planning on up to $10 million in additional costs after completing the purchase.
Community & Southern Holdings was recapitalized in 2010 to buy other banks. It has acquired 14 banks, amassing 47 branches in Georgia and one in Jacksonville, Fla., along with $3 billion in loans and $3.7 billion in deposits. The company recently bought some branches from CertusBank.
"This combination is a hand-in-glove fit," George Gleason, Bank of the Ozarks' chairman and chief executive, said in the release. "The synergies created by our highly complementary combined network of 75 Georgia banking offices, with virtually no overlap, will give us a powerful presence in Georgia, providing customers with great access and convenience."
Pat Frawley, Community & Southern's chief executive, will become CEO of Bank of the Ozarks' operations in Georgia.
"Our teammates have worked incredibly hard over the past six years building a quality franchise," Frawley said in the release. "As a result of this transaction, our shareholders will be rewarded, and our employees, customers and communities will have enhanced opportunities available to them by being associated with the highest performing community bank in the United States."
The acquisition, Bank of the Ozarks' 14th since 2010, is its largest to date.
Community & Southern was advised by Sandler O'Neill and Alston & Bird. Bank of the Ozarks was advised by FIG Partners and Kutak Rock.