BancorpSouth Again Delays Central Community, Ouachita Deals

BancorpSouth in Tupelo, Miss., has again extended the deadline to complete its acquisitions of Central Community in Temple, Texas, and Ouachita Bancshares in Monroe, La.

Additionally, the $13.6 billion-asset BancorpSouth has agreed to cancel either deal if its stock dips below a certain price, and it increased the size of the termination fee it would pay Central if that deal collapses.

Both deals are expected to close by Dec. 31, BancorpSouth said in a regulatory filing Wednesday; the previous target was June 30. The company said it needed more time to get regulatory approvals and to satisfy closing conditions, without providing additional details.

The postponements mark the second time that BancorpSouth has delayed the closing of its purchases of the $1.4 billion-asset Central and the $654 million-asset Ouachita. Both deals were announced in January 2014.

Last July BancorpSouth delayed the closings after it said it was under investigation for compliance with anti-money-laundering and fair-lending rules; regulators hit it with a consent order in September tied to anti-laundering compliance.

BancorpSouth later resubmitted the merger applications, and it was freed from the anti-laundering consent order in April. However, BancorpSouth is still subject to an ongoing investigation by the Consumer Financial Protection Bureau and Justice Department related to its fair lending practices, according to its latest 10-Q.

Under the deal modifications announced Wednesday, BancorpSouth will allow Central or Ouachita to terminate its acquisition if BancorpSouth's stock dips below $19.20 per share. BancorpSouth shares were trading at $26.01 per share as of midafternoon Wednesday.

BancorpSouth also increased the termination fee that it would pay Central if the deal falls through to a maximum of $1.25 million; the ceiling had been $750,000.

Also as part of the deadline extensions, BancorpSouth extended its exclusivity agreement with both Central and Ouachita; neither target can shop itself to other potential buyers for the next six months.

Both deals have received the board and shareholder approvals they need but await regulatory OKs.