Regional lender First Busey to buy CrossFirst in latest consolidation By Reuters

By Arasu Kannagi Basil

(Reuters) – Regional lender First Busey (NASDAQ: ) has agreed to buy smaller rival CrossFirst Bankshares (NASDAQ: ) in a $916.8 million all-stock deal, in another industry consolidation since crisis in March 2023 after three banks collapsed last time. year.

Regional US lenders have come under immense pressure as rising interest rates have dampened lending and increased competition for deposits, forcing banks to expand and diversify.

The deal will create a combined bank with total assets of $20 billion and expand Busey’s presence in new markets, including Kansas City, Wichita, Dallas/Fort Worth, Denver and Phoenix, the banks said Tuesday.

On Tuesday, Old Second Bancorp (NASDAQ: ) also said it will buy five Illinois branches from lender First Merchants (NASDAQ: ), strengthening its presence in southeast Chicago.

CrossFirst shareholders will receive 0.6675 Busey shares for each share held, valuing the lender at $18.28 each, representing a 0.3% discount to the closing price.

Shares of Busey and CrossFirst were down more than 1 percent in early trading.

The deal, expected to close in the first or second quarter of 2025, is likely to boost Busey’s earnings by 20 percent in 2026, the bank said.

“CrossFirst is a natural fit alongside Busey’s established commercial and wealth management offerings and our payment technology solutions business,” said Busey CEO Van Dukeman.

Busey’s wealth management division, which provides asset management, investment and brokerage services, has approximately $13 billion in assets under care.

The ability to use Busey’s low-cost deposits to fund commercial growth in CrossFirst’s markets and leverage Busey’s established wealth management platform should deliver incremental revenue, Stephens analyst Terry McEvoy said.

Illinois-based Busey had $11.97 billion in assets, while Kansas-based CrossFirst had $7.6 billion as of June 30.

The companies have agreed to a termination fee of $36.7 million if the deal falls through under certain circumstances.