Dive Brief:

• The Federal Reserve has approved Tupelo, Mississippi-based Renasant Corp.’s bid to acquire smaller Mississippi rival The First Bancshares for about $1.2 billion.
• The central bank has also given the OK for Jacksonville, Florida-based EverBank Financial Corp. to buy Sterling Bank & Trust, a subsidiary of Southfield, Michigan-based Sterling Bancorp, in a $261 million deal. Sterling also received regulatory approval of the deal from the Office of the Comptroller of the Currency on Friday.
• Renasant announced its intention to buy The First last July; EverBank said last September it sought to buy components of Sterling Bank. Both approvals from the Fed were announced Friday.

Dive Insight:

The deal approvals may reflect the Trump administration’s pro-business approach, as Trump’s return to the White House has been widely expected to spur a wide-scale easing of regulation and result in more M&A.

But on-again, off-again tariffs and corresponding market volatility could be having a chilling effect on to-be-announced deals. Nineteen U.S. bank deals with a combined value of $985.5 million had been announced as of Feb. 28, according to S&P Global, compared with 21 worth $653.8 million during the same period in 2024.

Renasant’s and The First’s respective shareholders approved the proposed merger at special shareholder meetings in October. The companies expect the deal to close April 1, according to a Monday news release.

Renasant, which has about $18 billion in assets, operates in Alabama, Florida, Georgia, Mississippi and Tennessee. Hattiesburg, Mississippi-based The First operates in a similar footprint, but buying the $8 billion-asset bank would give Renasant a presence in Louisiana, too. With the merger, Renasant would become the 84th-largest insured depository organization in the country, the Fed noted in its order. 

In assessing the proposal, the Fed consulted with the Federal Deposit Insurance Corp., Renasant’s primary federal regulator, and the Federal Reserve Bank of Atlanta, which fulfills the same role for First Bank. The Fed said it didn’t receive any comments on the proposed deal. 

The combination will result in a bank with about 250 locations throughout the Southeast, the banks said in the release. 

Renasant indicated that branch closings or consolidations may occur due to the physical proximity of some of its branches and First Bank branches, but the Fed’s review concluded that Renasant has established programs and procedures designed to ensure its branch network is consistent with its Community Reinvestment Act and fair lending obligations, “and to mitigate the impact of any branch closures on communities to be served by the combined bank.”  

The Fed noted the approval is contingent upon commitments Renasant made in announcing the acquisition, which included raising $200 million in capital. When the bank proposed the deal last July, Renasant also announced a $10.3 billion, five-year community benefit plan “to foster economic growth, access to financial services and inclusion in Renasant’s and The First’s combined footprint.”

EverBank, with about $40.8 billion in assets, operates in Arizona, California, Florida, Illinois, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, Nevada, North Carolina and Texas. The lender is acquiring 24 Sterling Bank branches in California and one in New York City, along with $900 million in loans and $2 billion in deposits, in an effort to accelerate its efforts to expand in California. 

Sterling Bank, which counts roughly $2.4 billion in assets, operates in California, Michigan and New York. But EverBank is not taking on Sterling’s sole Michigan branch – which will close in connection with the transaction – or its $372.9 million portfolio of residential tenant-in-common mortgage loans, which is set to be sold to Delaware-based Bayview Acquisitions LLC.

The acquisition has EverBank remaining the 61st-largest bank in the U.S., the Fed said in its order.

Since EverBank and Sterling compete directly in the Los Angeles market, the Justice Department weighed in but didn’t view the proposal having any adverse effect on competition.  

The Fed received one negative comment on the proposed deal, which criticized Sterling’s CRA record with respect to its “needs to improve” rating on the investment test aspect of the bank’s statewide ratings in Michigan, New York and Washington. 

In response, EverBank said Sterling received overall ratings of “satisfactory” in each of those states during its most recent evaluation, and “satisfactory” ratings for lending, investment and service tests in California, where most of its deposits and branches reside. 

Because Sterling sold its only Washington branch in 2021 and the lender’s only Michigan branch will be closed, the combined bank wouldn’t have CRA assessment areas in either state, EverBank noted.

Since its 2022 evaluation, Sterling has focused on community development loans to third parties that support housing for low- to moderate-income individuals, and made investments in community development financial institutions and minority depository institutions, EverBank told the Fed. 

Sterling’s board and shareholders each approved the transaction last year. The companies expect the deal to close April 1. EverBank is owned by a group of private equity investors that includes Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management.