BancorpSouth withdrew its applications to merge with two banks, but in a regulatory filing today said it expects to “subsequently refile.”
Last month, the company said it needed additional time to complete its mergers with Ouachita Bancshares Corp. of West Monroe, Louisiana, and Central Community Corp. of Temple, Texas. BancorpSouth had announced the deals in January and had expected their completion by June 30 of this year.
BancorpSouth said on July 21 more time was needed to get regulatory approvals and to meet “closing conditions necessary to complete” the mergers. BancorpSouth said then that its procedures, systems and processes related to some of its compliance programs, including its Bank Secrecy Act and anti-money-laundering programs, were being reviewed by federal regulators. In addition, the Consumer Financial Protection Bureau was reviewing the company’s fair lending practices.
The merger agreements, valued at a combined $325 million in stock and cash, were to have been completed by June 30 of next year.
However, in its filing Wednesday, BancorpSouth said the Federal Reserve Bank of St. Louis would not consider regulatory approval of the mergers until the Tupelo-based company addressed the issues identified by the Federal Deposit Guaranty Corp.
BancorpSouth said it is working with the FDIC on a proposed order to review and revise its BSA risk assessment, BSA compliance program and related procedures and processes.
Ouachita Bancshares and Central Community Corp. do have the option to terminate the merger if BancorpSouth hasn’t reapplied for regulatory approval by Feb. 28 with the FDIC or the Federal Reserve of St. Louis.
However, BancorpSouth said it is “implementing corrective action” for the deficiencies and expects to meet the requirements of the order in a “timely fashion.”
It also said it does not expect to pay a civil penalty. However, it could face civil fines if either the FDIC or the CFPB or both agencies decide to pursue penalties.
Last month, BancorpSouth Chairman and CEO Dan Rollins said, “We continue to believe our proposed mergers with Ouachita Bancshares Corp. and Central Community Corporation are in the best interest of our shareholders, customers and communities.”