BancorpSouth to Acquire Knox Insurance Assets
On Wednesday, BancorpSouth, Inc. (BXS), a bank holding company headquartered in Tupelo, MS, announced the inking of an acquisition deal through its subsidiary, BancorpSouth Insurance Services, Inc. (‘BXSI’). As per the announcement, BancorpSouth Insurance Services will take over the assets of Lafayette, LA-based Knox Insurance Group, LLC (Knox). Though financial terms of the deal have not been publicly revealed, it is expected to close soon.
Knox is an independent full-service commercial insurance brokerage firm in operation since 1972. Currently, it generates annual revenue of nearly $3 million and has a large commercial client base. Knox Insurance Group specializes in offering complete risk management package to the clients from various sectors such as marine, energy and industrial coverage.
BancorpSouth’s acquisition of the company is anticipated to increase the former’s market share in Southwest Louisiana. Additionally, the strong commercial network of Knox will benefit BancorpSouth going forward.
This is not the first time BancorpSouth has entered into an acquisition deal this year. In fact, this South-East bank has already signed two merger and acquisition (M&A) deals earlier. On Jan 22, 2014, BancorpSouth inked a deal with Central Community Corp., headquartered in Temple, TX.
According to the terms of this deal, Central Community Corp. will merge with it. Again, on Jan 8, 2014, Bancorp had penned a merger agreement with Ouachita Bancshares Corp., the parent company of Ouachita Independent Bank, headquartered in Monroe, LA. The current acquisition announcement is perfectly in line with the M&A strategy that the company is pursuing.
Moreover, being a “well capitalized” financial holding company with both Tier 1 risk-based capital and total risk based capital (for the last reported quarter) well above the minimum required levels, financing the latest deal should not be too difficult for BancorpSouth.
The agreement will aid Knox, too, as BancorpSouth Insurance Services’ wide array of products and services as well as large scale operations will complement its line of business.
BancorpSouth currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the regional bank space include BNC Bancorp (BNCN), Capital City Bank Group Inc. (CCBG) and Farmers Capital Bank Corp. (FFKT). All of these sport a Zacks Rank #1 (Strong Buy).
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