CHAMPAIGN, Ill. - First Busey (NASDAQ:BUSE) Corporation (NASDAQ:BUSE), the parent company of Busey Bank, and CrossFirst Bankshares, Inc. (NASDAQ:CFB), the holding company for CrossFirst Bank, have entered into a definitive agreement for a merger valued at approximately $916.8 million. The all-stock transaction will see CrossFirst merge into Busey, creating a commercial banking franchise with around $20 billion in assets.
The deal, based on Busey's closing stock price as of August 26, 2024, is expected to extend Busey's market presence into Arizona, Colorado, Kansas, New Mexico, Oklahoma, and Texas. The combined entity will operate under the Busey brand and is set to have approximately $17 billion in deposits and $13 billion in wealth management assets under care.
Busey Chairman and CEO Van Dukeman highlighted the strategic, financial, and cultural fit of the partnership, emphasizing the opportunity to capitalize on growth potentials in 2025 and beyond. The merger is anticipated to serve as a catalyst for commercial banking growth and to expand wealth management and payment businesses.
Mike Maddox, CEO, President, and Director of CrossFirst, expressed confidence that the partnership will benefit teams, customers, communities, and shareholders, citing complementary business models and cultures.
The partnership is expected to enhance Busey's regional operating model in high-growth metro markets and strengthen its commercial banking and wealth management services. Projections estimate a 20% earnings per share accretion for Busey in 2026, the first full year of combined operations, excluding one-time charges and assuming fully phased-in cost savings.
Upon completion of the merger, Busey shareholders will own approximately 63.5% of the combined company, with CrossFirst shareholders owning about 36.5%. The combined company will continue to trade on the Nasdaq under the BUSE stock ticker symbol.
Subject to customary closing conditions, including approval from both Busey and CrossFirst shareholders and regulatory approvals, the parties expect the holding company merger to close in the first or second quarter of 2025.
The combined holding company will retain the First Busey Corporation name, with Busey Bank's headquarters remaining in Champaign, Illinois. The holding company headquarters will move to Leawood, Kansas, at the current site of CrossFirst's headquarters. The Board of Directors of the combined company will consist of members from both Busey and CrossFirst, with Van Dukeman serving as Executive Chairman and CEO.
This merger announcement is based on a press release statement from the companies involved.
In other recent news, First Busey Corporation announced a quarterly cash dividend of $0.24 per share on its common stock, payable to shareholders of record as of July 19, 2024. This decision, made by the Board of Directors, reflects the company's ongoing commitment to delivering shareholder value. In addition to this, DA Davidson, a financial services firm, has revised its price target for First Busey Corporation. The firm lowered the price target to $24 from the previous $25, while maintaining a Neutral rating on the stock. This adjustment is in response to recalibrated earnings per share estimates for the years 2024 and 2025, reflecting changes in First Busey's financial outlook. These recent developments provide investors with an updated perspective on the company's performance and strategies.
InvestingPro Insights
In light of the recent merger announcement between First Busey Corporation and CrossFirst Bankshares, Inc., it's important to consider the current financial health and market performance of Busey. According to recent data from InvestingPro, Busey maintains a market capitalization of $1.56 billion and offers a favorable price-to-earnings (P/E) ratio of 14.15, which is slightly adjusted to 13.57 when considering the last twelve months as of Q2 2024.
InvestingPro Tips suggest that Busey has a high shareholder yield, which is a promising sign for investors looking for returns. Additionally, the company has demonstrated a commitment to its shareholders by maintaining dividend payments for 36 consecutive years, with a current dividend yield of 3.5%. This consistent return to shareholders is particularly significant as the company enters into a major growth phase through its merger with CrossFirst.
While Busey has experienced a slight decline in revenue growth over the last twelve months, with a -4.54% change, it has shown strength over the past three months with a 20.62% total return on its stock price. This recent performance, coupled with analysts' predictions that Busey will be profitable this year, provides a positive outlook for the company's financial future.
For those interested in a deeper analysis, InvestingPro offers an additional 6 tips on Busey, providing a comprehensive view of the company's financial health and future prospects. These insights can be found at https://www.investing.com/pro/BUSE and may offer valuable guidance for making informed investment decisions in the context of the merger and beyond.
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