BusinessReport.com

The Business Bank of Baton Rouge, founded in 1998 and headed by former Gov. Buddy Roemer, will merge with BancorpSouth Inc., the Mississippi company that last year bought the Wright & Percy insurance firm.

The Business Bank announced the deal this morning at its Corporate Boulevard headquarters in a joint news conference with officials from the $11 billion, Tupelo-based BancorpSouth, which operates in six states.

Officials refused to discuss the value of the deal, which will involve a combination of stock and cash. The merger still must undergo the scrutiny of state and federal regulators and both bank boards before being finalized. That process is likely to take three to six months.

The acquisition is BancorpSouth's first foray into the Baton Rouge market, where it plans a big roll-out of additional branches. The merged bank will operate under the BancorpSouth name.

BancorpSouth entered Louisiana in 2000 and has grown its presence largely by acquiring community banks and building new branches. It has 13 branches in Louisiana, including in Ruston, Monroe and Shreveport.

After the deal closes, BancorpSouth will have assets in Louisiana of about $600 million, its chairman and CEO, Aubrey Patterson, said this morning.

Despite a huge difference in size-The Business Bank has assets of about $170 million and 175 investors-both banks stressed that the merger won't sever the local bank's ties to the community or dilute its local management authority.

'We will lose our name but not our attitude,' Roemer said.

The local bank's 19-member board of directors will continue to exist. The board includes many prominent local business figures, including developer Tommy Spinosa and cookbook author Holly Clegg. Business Report Publisher Rolfe McCollister helped found the bank and is a member of the board of directors.

Roemer said The Business Bank began to explore merger options because it needed to grow to better serve its local customers. He noted that it currently sells about 20% of its loans, a practice that will cease once the banks are merged.

The merged bank will offer customers a wider array of financial products, including insurance and investment services, Roemer said.

He also said The Business Bank has rebuffed past offers from larger banks, partly because it wanted to ensure a continued commitment to the local community. He said BancorpSouth has an excellent track record of nurturing community banks without undercutting their local connections.

Patterson said BancorpSouth views its mission as 'strengthening and supporting' the existing team of managers. As evidence of its respect for local autonomy, he noted that BancorpSouth hasn't lost market share after past mergers, something that typically occurs after a buyout.

To that end, the merger will not involve layoffs, he said, noting that the Business Bank already runs a lean operation with just 29 employees.

Bank officials would not say which bank jump-started discussions about a merger. But Patterson said they've been in close talks for five or six months.

BancorpSouth has about 4,000 employees in Mississippi, Alabama, Arkansas, Tennessee, Texas and Louisiana.