[11/16/01]BancorpSouth Inc. and Pinnacle Bancshares Inc. Thursday announced the two bank holding companies had signed a definitive agreement to merge.

BancorpSouth Inc. is the holding company for BancorpSouth Banks of Tupelo. The bank has five branches in the Vicksburg area. BancorpSouth acquired the branches when BancorpSouth merged with the locally owned Merchants Bank in 1998 in a deal that was worth $63.1 million to stockholders of Merchants Capital Corp., Merchants’ holding company. BancorpSouth had had a presence in Vicksburg before the merger, operating as the Bank of Mississippi.

BancorpSouth spokesman Randy Burchfield said this morning that the merger will have no effect on the local banking facilities.

Officials of BancorpSouth and Pinnacle said they expect the merger to be completed by the end of the first quarter of 2002. Before that, the deal must be approved by banking regulators and Pinnacle stockholders.

Terms of the deal were not disclosed.

Pinnacle Bank has $130 million in assets.

BancorpSouth has $9.4 billion in assets, 246 banking and mortgage locations and 233 automatic teller machines. They operate in Arkansas, Alabama, Louisiana, Mississippi, Tennessee and Texas. They also have BancorpSouth Investment Services Inc. and BancorpSouth Insurance Services.

The merger will create a banking company with about $9.5 billion in assets and about $7.9 billion in deposits.

“Our merger with BancorpSouth gives us the needed capital capacity to continue our rapid growth in the Little Rock metropolitan market,” said Bob Athoff, president and chief executive officer of Pinnacle. “We have experienced tremendous acceptance in this market. However, to continue to meet our customers’ expectations and expanding needs we realized we must join with a company with a similar operating philosophy, strong capital and with expanded resources and technological capabilities. With BancorpSouth we have found that partner.”

“We are pleased to have Pinnacle joining our banking family,” said Aubrey Patterson, BancorpSouth chairman and CEO.