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Louisiana bank involved in stalled merger

 

Many of our previous posts here have discussed the advantages that businesses in Louisiana could see when they go through a merger with another company, or an acquisition of another company. For a company that is in a strong financial position, the appeal of mergers and acquisitions as a means of growing the company’s footprint is strong. Unfortunately, not all of these transactions go as smoothly as others. A company that was attempting to set up a merger with a bank in Louisiana has found this out the hard way.

According to a recent report, BancorpSouth has been working for two years to successfully merge with Ouachita Bancshares Corp., a banking company based in West Monroe, Louisiana. BancorpSouth was also attempting to set up a merger with another banking company based in Texas. However, BancorpSouth recently received some bad news.

The reports indicate that BancorpSouth’s Community Reinvestment Act rating was recently downgraded. As a result, the planned mergers are now on hold. BancorpSouth was notified by the Federal Deposit Insurance Corp. of the downgrade on August 11. But, on the good side, once BancorpSouth improves its rating back to “satisfactory,” which is where it was prior to the downgrade to “needs to improve,” the mergers may yet get back on track.

Buying a company or merging with another company is not without significant factors that can derail the whole process, as these southern companies have found out. However, with the right approach, companies in Louisiana that run into these speed bumps may be able to navigate a path back to the right track.

Source: djournal.com, “Pending FDIC Review, Bancorpsouth Mergers on Hold,” Dennis Seid, Aug. 15, 2016

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