Name change seals BancorpSouth merger

The match began when the institutions’ holding companies merged March 1 and was sealed July 1 when six Springfield-based Signature locations took the name of Tupelo, Miss.-based BancorpSouth.

While new signage is the most visible indicator of change, customers will soon be seeing new banking products and services, new technology, regional branch expansion and the launch of a commercial insurance division.

The goal on both sides of the merger has been a “seamless” transition with little or no disruption to employees or customers.

In that sense, “the merger between The Signature Bank and BancorpSouth has gone exceedingly well,” said David Kunze, BancorpSouth’s Missouri president.

The local operation has retained 100 percent of staff, and no customers have had to change their account numbers because of duplication between the two banks.

Kunze noted that an American Bankers Association survey of CEOs at recently merged banks defined a “successful” merger as one in which a bank loses no more than 3 percent to 4 percent of its customer base.

“In our case here, we’ve actually picked up market share since we announced our merger,” Kunze said.

Since the Oct. 31, 2006, merger announcement, the local operation reports total loans have increased by more than $100 million; total assets have risen to just less than $1 billion; the mortgage bank racked up $20 million in loans in a single month, the highest level since 2005; assets under management by financial adviser Nadia Cavner’s Signature Investments are increasing daily; and the bank has $150 million in commercial loans in the pipeline.

Convergence

With the completion of a system conversion in mid-September, local BancorpSouth customers will have access to a menu of enhanced services, many related to cash management.

Commercial customers are particularly excited about remote deposit, which allows businesses to deposit customer checks electronically by scanning the checks and transmitting the images via computer, said Jan Baumgartner, senior vice president, cash management services.

And BancorpSouth’s enhanced cash-management offerings are already netting new business for the local operation.

“Larger corporations, hospitals and universities use sophisticated financial tools like sweep accounts, cash-concentration accounts and zero-balance accounts,” Kunze said.

The bank was recently the successful bidder on an eight-figure account “because we were able to offer all those cash-management accounts that they wanted which we couldn’t have done previously,” he added.

With the help of BancorpSouth’s technological resources, the bank will expand and strengthen its presence in retail banking, aggressively pursuing new branches in Branson, Rogersville, Republic, Monett, West Plains and points in between, said BancorpSouth Springfield President Rob Fulp.

BancorpSouth also brings new revenue streams to the table. The bank has a successful commercial insurance division, and its business model has been to grow that business by acquiring strong independent agencies in its various markets.

“We have been very successful with that particular line of business, and it adds some much-needed noninterest revenue to our revenue mix,” said Randy Burchfield, senior vice president and corporate director of marketing for BancorpSouth. “We will have an interest in insurance when that opportunity presents itself in the Springfield area.” (See box.)

Meanwhile, information packets have been sent to local bank customers, detailing BancorpSouth products and services and giving a timeline for changes, Baumgartner said, and corporate customers are also being updated in one-on-one business development meetings.

The urge to merge

The Signature Bank became an attractive acquisition target in 2004 when it merged with The Bank and hit close to $700 million in assets, Kunze said.

“We had entertained several offers through the years,” Kunze said. “But there were really two main reasons why we got associated with BancorpSouth,” he said, noting specifically that the deal itself, in excess of $170 million, was a handsome return on the $34 million put up by Signature’s investors in the last decade. Also attractive to Signature was access to technology offered by BancorpSouth.

“We were at a crossroads,” Kunze said of the bank’s technological needs. “In order to take our bank to the next level and continue our long-term business plan, which was to grow in all the metropolitan markets in Missouri … we would have to invest millions of dollars in technology to expand.”

Technology includes data processing, information technology and communications. “When you operate multiple locations in more than one market, it requires a whole new infrastructure to process deposits,” Kunze added.

From BancorpSouth’s perspective, economically vibrant Springfield “definitely had the growth and demographics we were interested in,” Burchfield said.

The merger with Signature also provided BancorpSouth’s entrée to the St. Louis market. Prior to the merger, Signature had a loan production office in Clayton and an O’Fallon branch under construction, in addition to its six Springfield locations.

Under the BancorpSouth banner, the loan production office will become a full-service location on or about Aug. 1, when the new O’Fallon branch also is set to open, Burchfield said.

BancorpSouth’s decentralized approach to decision-making has also allowed the Missouri operation to retain much of its autonomy.

“With local control, local decision making and now, with the latest technology, we’re very excited about the future,” Fulp said.

Shares of publicly traded BancorpSouth (NYSE:BXS) closed July 10 at $24.03, with a 52-week range of $23.22–$28.60.

Southern Flavor

In celebration of the BancorpSouth merger, Springfield locations are offering free Moon Pies and sweet tea. “We’re having a little fun with our Southern brethren, if you will,” said BancorpSouth Missouri President David Kunze.[[In-content Ad]]