First Busey to Acquire CrossFirst Bankshares in $916.8 Million Deal - What You Need to Know
By Arasu Kannagi Basil
Regional lender First Busey has made a bold move in the financial industry by agreeing to acquire smaller rival CrossFirst Bankshares in a $916.8 million all-stock deal. This consolidation comes in the wake of industry turmoil since the collapse of three banks last year, signaling a trend of banks seeking to scale up and diversify in the face of challenges such as elevated interest rates and increased competition for deposits.
The deal, which is set to create a combined bank with $20 billion in total assets, will expand Busey's presence into new markets including Kansas City, Wichita, Dallas/Fort Worth, Denver, and Phoenix. Additionally, Old Second Bancorp has also announced its plans to acquire five Illinois branches from First Merchants, further strengthening its presence in Southeast Chicago.
Under the terms of the agreement, CrossFirst shareholders will receive 0.6675 shares of Busey for each stock held, valuing the lender at $18.28 each. Despite this, shares of both Busey and CrossFirst saw a slight decline in early trading.
The deal is expected to close in the first or second quarter of 2025 and is projected to boost Busey's earnings by 20% in 2026. Busey CEO Van Dukeman expressed confidence in the acquisition, stating that CrossFirst is a natural fit alongside Busey's existing commercial and wealth management offerings.
Analysts believe that the ability to utilize Busey's low-cost deposits to fuel commercial growth in CrossFirst's markets, combined with leveraging Busey's wealth management platform, could lead to revenue growth opportunities. With Busey's wealth management division already managing around $13 billion in assets, the potential for synergy between the two entities is promising.
As of June 30, Illinois-based Busey had $11.97 billion in assets, while Kansas-based CrossFirst had $7.6 billion. The companies have also established a $36.7 million termination fee in case the deal falls through under certain circumstances.
Analysis:
This article highlights a significant development in the financial sector, with First Busey's acquisition of CrossFirst Bankshares marking a notable consolidation in the industry. The move reflects a growing trend among regional lenders to expand their reach and diversify in response to challenging market conditions.
For investors, this acquisition presents an opportunity to potentially benefit from the synergies and revenue growth expected from the combined entity. By understanding the implications of such mergers and acquisitions, individuals can make informed decisions regarding their investments and financial strategies.
Overall, the deal between First Busey and CrossFirst Bankshares underscores the dynamic nature of the financial markets and the strategic moves being made by industry players to navigate a rapidly changing landscape.