In a significant move within the financial sector, CrossFirst Bankshares and First Busey have announced their agreement to merge in a transaction valued at approximately $916.8 million. This all-stock deal, confirmed by both lenders in a joint statement on a Tuesday, marks a pivotal moment for both banks as they aim to combine their resources and enhance market competitiveness. Under the proposed terms of the merger, shareholders of CrossFirst Bankshares will receive 0.6675 shares of First Busey stock for each share they own.
The valuation of this transaction is predicated on the closing share price of First Busey from the previous Monday. However, market reactions have seen fluctuations; shares of First Busey fell by 1.8% during Tuesday's trading session while CrossFirst's shares declined by 2.1%. The merger is contingent upon approval from financial regulatory authorities as well as the shareholders of both lending institutions.
It is anticipated that the transaction will close in the first or second quarter of 2025. Upon completion, shareholders of First Busey are projected to own 63.5% of the newly merged entity, while the remaining 36.5% will be owned by CrossFirst's stockholders. Notably, CrossFirst shareholders will be eligible to receive dividends from First Busey as declared after the transaction is finalized. Van Dukeman, CEO of First Busey, expressed enthusiasm about the merger, describing it as a “great fit from a strategic, financial and cultural perspective.” He further articulated the potential to leverage opportunities arising from the merger into 2025 and beyond. The combined entity is expected to emerge as a full-service commercial bank, boasting total assets of around $20 billion, $17 billion in deposits, $15 billion in loans, and $13 billion in assets under management.
Furthermore, this merger is expected to expand First Busey's market reach significantly, covering states like Arizona, Colorado, Kansas, New Mexico, Oklahoma, and Texas, thereby presenting new growth avenues in wealth management and payment technology solutions. Financial projections indicate that the merger would be accretive by approximately 20% to First Busey's earnings per share by 2026, excluding any one-time costs related to the merger.
This growth is expected once cost efficiencies are fully realized. Post-merger, the combined banking entity will operate under the First Busey brand. Its new holding company headquarters will relocate to Leawood, Kansas, the current base of CrossFirst. The merged company will continue to trade under the ticker symbol BUSE. Mike Maddox, CEO of CrossFirst, noted that shared cultural values and complementary business models underpin the merger’s anticipated success.
He remarked, “We are confident this partnership will create significant benefits for our teams, customers, communities and shareholders.” In terms of leadership structure following the merge, Van Dukeman will take on the role of executive chairman and CEO of the new entity, while Mike Maddox will serve as president and executive vice chairman.
Notably, Maddox is expected to succeed Dukeman as CEO of First Busey either one year after the bank merger or 18 months after the merging of the holding companies, whichever comes first. As the financial landscape shifts, this merger between CrossFirst Bankshares and First Busey signifies a strategic collaboration aimed at enhancing operational efficiencies and market presence in a competitive environment.
Both companies are poised to navigate the evolving banking needs of their customers as they prepare for this union—a notable event in the contemporary banking narrative..