Bank of the Ozarks has agreed to acquire Community & Southern Bank, an Atlanta bank with $4 billion in assets and 47 offices in Georgia, the Little Rock bank said Monday.
The deal is Bank of the Ozarks' largest of 14 purchases since 2010, and it's the largest ever by an Arkansas bank, based on the size of assets. It will make Bank of the Ozarks the seventh-largest bank in Atlanta, Matt Olney, a banking analyst with Stephens Inc., said in a research report.
The announcement came after the markets closed Monday. Bank of the Ozarks closed up 25 cents to $46.12 Monday in trading on the Nasdaq exchange.
Olney said he expects that Bank of the Ozarks' stock will receive a favorable reaction from investors today.
Bank of the Ozarks will pay $800 million in stock for Community & Southern, which also has a branch in Jacksonville, Fla. After the purchase, Bank of the Ozarks will have 75 offices in Georgia.
The acquisition "will give us a powerful presence in Georgia, providing customers with great access and convenience," George Gleason, Bank of the Ozarks' chairman and chief executive officer, said in a prepared statement. There is virtually no overlap in the banks' branches, Gleason said.
Pat Frawley, Community & Southern's founder and chief executive officer, will become Bank of the Ozarks' chief executive officer for Georgia.
The deal is expected to close next year and will put Bank of the Ozarks at about $13.7 billion in assets, well over the $10 billion level that brings added costs and triggers closer scrutiny by federal regulators. Arvest Bank is the largest bank in Arkansas, with about $15.4 billion in assets.
Because the deal won't close until next year, reaching the $10 billion level won't affect Bank of the Ozarks until July 1, 2017, when the bank expects about $5.35 million a year in costs, Gleason said in a conference call last week.
"This is a very strategic acquisition for Bank of the Ozarks," said Garland Binns, a Little Rock banking attorney. "It looks like [Bank of the Ozarks] will be able to retain [Community & Southern's] management. And the earnings of [Community & Southern] will be [profitable] for Bank of the Ozarks over 12 months."
Business on 10/20/2015