Renasant (RNST) in Tupelo will buy First M&F (FMFC) in Kosciusko in a merger of Mississippi banks.

The $4.2 billion-asset Renasant agreed to pay about $119 million in stock for First M&F in a deal announced Thursday. The acquisition would give Renasant an additional $1.6 billion in assets, $1.4 billion in deposits and 36 branches in Mississippi, Alabama and Tennessee.

First M&F's shareholders will recent about 0.6 shares of Renasant stock of each of their existing shares, or a premium of roughly 119% of tangible book value.

The deal will also double the size of Renasant's insurance operations and expand its mortgage and wealth management divisions, E. Robinson McGraw, the company's chief executive, said in a press release. "This merger creates a stronger Renasant franchise that allows for not only new market entries and additional branch locations within our legacy markets, but provides the realization of significant cost savings through strategic branch consolidations and future earnings growth by combining two strongly competitive community banking institutions."

Sandler O'Neill and the law firm of Phelps Dunbar advised Renasant. First M&F was advised by Keefe, Bruyette & Woods and the law firm of Jones, Walker, Waechter, Poitevent, Carrere & Denegre.

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