Massive $917m merger: First Busey and CrossFirst Bankshares team up to dominate 10-state market

In a significant move set to reshape the commercial banking landscape, First Busey Corporation (“Busey”) (Nasdaq: BUSE) and CrossFirst Bankshares, Inc. (“CrossFirst”) (Nasdaq: CFB) have announced a definitive agreement for a merger. The merger, valued at approximately $916.8 million based on Busey’s closing stock price of $27.39 as of August 26, 2024, will see CrossFirst merge into Busey in an all-common stock transaction. The new entity, operating under the Busey brand, will boast around $20 billion in total assets, $17 billion in total deposits, and $13 billion in wealth management assets.

Strategic Expansion and Enhanced Market Presence

The merger represents a strategic alignment designed to leverage both companies’ strengths. Busey’s Chairman and CEO, Van Dukeman, emphasized the merger’s potential, stating, “The partnership between our high-quality franchises is a great fit from a strategic, financial, and cultural perspective. This merger will help us capitalize on numerous opportunities and expand our commercial and wealth management offerings.” The combined entity will extend Busey’s footprint into high-growth markets such as Kansas City, Wichita, Dallas/Fort Worth, Denver, and Phoenix.

Benefits and Projections

The merger is expected to enhance the combined company’s operational capabilities and financial performance. Pro forma calculations suggest a 20% increase in Busey’s earnings per share by 2026, the first full year of combined operations, excluding one-time merger-related costs and assuming full realization of cost savings. The tangible book value per share dilution is anticipated to be modest at -0.6%, with a projected earnback period of approximately six months. Capital ratios will be robust, with leverage at 9.6%, CET1 at 11.0%, and total risk-based capital at 14.1%. The merger will result in a loan-to-deposit ratio of 86%, with substantial concentrations in C&D and CRE sectors, positioning the combined entity for future growth.

Merger Details and Shareholder Impact

Under the terms of the merger, CrossFirst shareholders will receive 0.6675 shares of Busey common stock for each share of CrossFirst common stock they hold. CrossFirst shareholders, who currently do not receive dividends, will become eligible for Busey’s dividends post-merger. Upon completion, Busey’s shareholders will own approximately 63.5% of the merged company, while CrossFirst’s shareholders will hold about 36.5%. The combined entity will continue to trade on Nasdaq under the ticker symbol “BUSE.”

Both companies’ boards of directors have unanimously approved the merger. It remains subject to approval by both companies’ shareholders and regulatory authorities. The transaction is expected to close in the first or second quarter of 2025.

About the Companies

The merger will create a premier full-service commercial bank with 77 locations across 10 states. Busey, headquartered in Urbana, Illinois, and CrossFirst, headquartered in Leawood, Kansas, will bring together their extensive banking networks and expertise to form a more diversified and robust banking institution.