Heritage Financial Group Inc (HBOS)

[Enterprising Investor]

Renasant Corporation and Heritage Financial Group, Inc. Announce Definitive Merger Agreement (12/10/14)

TUPELO, Miss. and ALBANY, Ga., Dec. 10, 2014 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) and Heritage Financial Group, Inc. (NASDAQ: HBOS) jointly announced today the signing of a definitive merger agreement pursuant to which Renasant Corporation ("Renasant" or "the Company") will acquire, in an all-stock merger, Heritage Financial Group, Inc. ("Heritage"), a bank holding company headquartered in Albany, Georgia, and the parent of HeritageBank of the South ("HeritageBank"), a Georgia savings bank.

Upon completion of the transaction, the combined company will have approximately $7.5 billion in total assets, $5.2 billion in gross loans and $6.1 billion in deposits with 171 banking, mortgage, insurance, wealth management and investment offices in Mississippi, Alabama, Tennessee, Georgia and Florida. The transaction will add to Renasant approximately $1.9 billion in assets, $1.2 billion in loans and $1.3 billion in deposits, and 48 banking, mortgage and investment offices in Alabama, Georgia and Florida as of September 30, 2014, inclusive of Heritage's pending previously announced branch acquisition from The PrivateBank and Trust Company of a branch in Norcross, GA with $40 million in loans and $129 million in deposits.

The merger will solidify Renasant as one of the largest community banks operating in the Southeast with significant other business lines including insurance, mortgage and wealth management.

The transaction also enhances the Company's presence in the metro markets of Birmingham, AL and Atlanta, GA with minimal existing overlap while also providing entry into new markets, such as Albany, GA, Statesboro, GA, Savannah, GA, Auburn, AL, Ocala, FL and Gainesville, FL.

Additionally, the merger will provide a stable source of low-cost core deposits that are expected to support and enhance Renasant's future growth activities.

O. Leonard Dorminey, President and Chief Executive Officer of Heritage, said, "We are excited to partner with Renasant to provide enhanced value to our stockholders, clients, employees, and communities. This merger will provide greater resources and operational scale that will allow us to grow as part of a larger community bank. Renasant's strong fundamentals and superior service are consistent with our own culture. Their proven track record of profitable growth, ability to successfully execute acquisitions, and similar community bank culture makes Renasant an excellent choice for Heritage. We are confident that this merger will be positive for all of our constituents: our stockholders, clients, employees and communities."

Dorminey will join the Company as Executive Vice President of Renasant Corporation and will serve as the President of Renasant Bank's Georgia region. He has been with HeritageBank since 2001 and has served as President and CEO of Heritage since 2003. Dorminey began his career in banking as a lender more than 32 years ago.

According to the terms of the merger agreement, which has been approved by the Boards of Directors of both companies, Heritage stockholders will receive 0.9266 shares of Renasant common stock for each share of Heritage common stock, and the merger is expected to qualify as a tax-free reorganization for Heritage stockholders. Based on Renasant's 20-day average closing price of $29.14 per share as of December 9, 2014, the aggregate deal value is approximately $258 million or $27.00 per share. Under the proposed terms, the transaction is expected to be immediately accretive to Renasant's estimated earnings per share with the estimated tangible book value dilution being earned back in less than two years and an IRR which exceeds internal thresholds.

"This merger between Renasant and Heritage adds branch and mortgage locations to our legacy markets of Birmingham and Atlanta while providing for our entry into several attractive new markets in Alabama, Georgia and Florida," said Renasant Chairman and Chief Executive Officer, E. Robinson McGraw. "This merger will expand our market share, earnings growth and profitability and is expected to greatly benefit our current and future clients with expanded locations, services and products. Heritage is a community bank with a proven track record of success in serving their clients and communities, and we look forward to completing this acquisition."

The acquisition is expected to close during the third quarter of 2015 and is subject to Renasant and Heritage stockholder approval, regulatory approval and other conditions set forth in the merger agreement. Pursuant to the terms of the merger agreement, HeritageBank will merge with and into Renasant Bank immediately after the merger of Heritage with and into Renasant.

Renasant was advised by the investment banking firm of Raymond James & Associates, Inc., and the law firm of Phelps Dunbar LLP. Heritage was advised by the investment banking firm of Keefe, Bruyette & Woods and the law firm of Alston & Bird LLP.

Conference Call Information:

Renasant and Heritage will host an investor conference call and webcast on December 11, 2014, at 9:00 AM Eastern through http://services.choruscall.com/links/rnst141211.html.

The conference may be accessed via telephone by dialing 1-877-513-1143 in the United States and requesting the Renasant Corporation call. International participants should dial 1-412-902-4145. A presentation outlining this announcement will be available through the Company's IR site, www.renasant.com. The presentation will also be available through Heritage's website at www.eheritagebank.com. A replay of the conference call will be available by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally and entering access code 10057355. The webcast can be replayed until December 11, 2015, from either the Company's or Heritage's website.

ABOUT RENASANT CORPORATION:

Renasant Corporation is the parent of Renasant Bank, a 110-year-old financial services institution, and Renasant Insurance. Renasant has assets of approximately $5.8 billion and operates more than 120 banking, mortgage, financial services and insurance offices in Mississippi, Tennessee, Alabama and Georgia.

ABOUT HERITAGE FINANCIAL GROUP, INC.:

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily Georgia, Florida and Alabama through 36 banking locations, 20 mortgage offices, and 5 investment offices.

Additional Information about the Renasant/Heritage Transaction

This communication is being made in respect of the proposed merger transaction involving Renasant and Heritage. In connection with the proposed merger, Renasant and Heritage will file a registration statement on Form S-4 that will include a joint proxy statement/prospectus, and other relevant documents concerning the proposed merger, with the Securities and Exchange Commission (the "SEC"). This release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT RENASANT, HERITAGE AND THE PROPOSED MERGER. When available, the joint proxy statement/prospectus will be mailed to shareholders of both Renasant and Heritage. Investors will also be able to obtain copies of the joint proxy statement/prospectus and other relevant documents (when they become available) free of charge at the SEC's website (www.sec.gov). In addition, documents filed with the SEC by Renasant will be available free of charge from Kevin Chapman, Chief Financial Officer, Renasant Corporation, 209 Troy Street, Tupelo, Mississippi 38804-4827, telephone: [phone]. Documents filed with the SEC by Heritage will be available free of charge from Heritage by contacting T. Heath Fountain, Chief Financial Officer, Heritage Financial Group, Inc., 721 N. Westover Blvd, Albany, Georgia, telephone: [phone].

Renasant, Heritage and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Renasant and Heritage in connection with the proposed merger. Information about the directors and executive officers of Renasant is included in the proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on March 11, 2014. Information about the directors and executive officers of Heritage is included in the proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on April 25, 2014. Additional information regarding the interests of such participants and other persons who may be deemed participants in the transaction will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.

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