The Signature Bank, publicly traded BancorpSouth merge in $170M deal

The 34-year banking veteran retired as The Signature Bank’s president a little more than a year ago after helping to orchestrate the 2004 merger of The Bank and Signature Bank.

“When The Bank merged with Signature Bank,” Parnell said, “it was a great move for the community and for shareholders and employees. I feel the same way about this one.”

Parnell and fellow The Signature Bank board members unanimously approved the BancorpSouth merger less than two weeks ago.

Tupelo, Miss.-based BancorpSouth will pay The Signature Bank shareholders about $170 million in 50 percent cash and 50 percent BancorpSouth common stock if federal and state regulators approve the merger, which BancorpSouth CEO Aubrey Patterson expects to happen early next year. The Signature Bank’s 400 shareholders are expected to vote on the deal by year’s end.

Ron Neville, Parnell’s college buddy and an original The Bank investor, said the merger couldn’t have worked out better for shareholders.

“As a shareholder, we really think we did a good job,” he said. “Three-times book (value), that’s what we sold for, and that’s pushing the top.”

The Signature Bank’s book value is $56.6 million, according to controller Kirk Bossert.

Both Parnell and Neville said the beauty of the merger is that The Signature Bank, which will adopt BancorpSouth’s name eventually, would retain local control. BancorpSouth will create a Missouri region managed by The Signature Bank CEO David Kunze and President Rob Fulp.

“He’s running Missouri,” said BancorpSouth’s Patterson, pointing to Kunze after the Oct. 31 merger announcement at Springfield Area Chamber of Commerce.

With the merger, BancorpSouth would enter Missouri for the first time. It plans to expand on The Signature Bank’s portfolio, which has $847 million in assets at six Springfield locations and one St. Louis-area loan production office. New branches could spring up in Kansas City, Columbia, Joplin, Nixa, Ozark and Branson as soon as late next year, Kunze said.

Randy Burchfield, senior vice president of marketing for BancorpSouth, said he couldn’t comment on whether a federal lawsuit between U.S. Bancorp and The Signature Bank financial adviser Nadia Cavner impacted the merger decision.

Shopping for funds

The Signature Bank has experienced rapid growth, reaching its current status in just eight years. But self-funded growth hit a wall, so the board decided to shop for a larger bank that could fund growth, Neville said.

BancorpSouth’s $11.9 billion in assets gives The Signature Bank the needed capital for expansion.

BancorpSouth is publicly traded on the New York Stock Exchange under the ticker symbol BSX. It operates 282 locations in Arkansas, Texas, Louisiana, Mississippi, Tennessee, Alabama and Florida.

“BancorpSouth brings a lot of resources that we don’t have access to and it will allow us to better serve our customers,” Parnell said.

Kunze said the merger would give The Signature Bank technology upgrades and the ability to issue larger loans to institutions such as hospitals and universities.

Market impact

Gov. Matt Blunt, who was in Springfield for the announcement, said the merger is good news for area banking customers.

“It’s an investment in our state,” Blunt said. “I think we benefit from competition in banking.”

Still, one Springfield banker doesn’t foresee a rippling effect on his bank from the merger. That’s because BancorpSouth is planning to keep The Signature Bank’s employees in place.

“People still do business with people, not with institutions,” said Mick Nitsch, community bank president of The Bank of Missouri, which opened in Springfield Sept. 12. “If BancorpSouth is capable of retaining the employees of Signature, they won’t see much change. If they don’t retain employees, then there will be customer defections.”[[In-content Ad]]