Reliant Bancorp, the parent company of Reliant Bank, has signed an agreement to acquire Tennessee Community Bank Holdings (TCB), which owns the Community Bank & Trust (CB&T), for $37.2m (£30m).
The transaction, comprising 50% stock and 50% cash, is expected to create the third-largest community bank by deposits, with headquarters in the Nashville-Davidson-Murfreesboro-Franklin, Tennessee Metropolitan Statistical Area.
As of 30 June, the combined company had assets of about $2bn (£1.61bn), deposits of about $1.8bn (£1.45bn) and gross loans of about $1.5bn (£1.21bn), operating from 22 full-service branches across Middle Tennessee and Chattanooga.
The deal is expected to strengthen and complement Reliant’s deposit market share in the Nashville MSA by adding $208m (£167m) in deposits, comprised mainly of transaction accounts (34%) and money market deposit accounts (MMDA) and savings accounts (34%), at an overall cost of deposits of 0.77% for the six months ending 30 June.
Reliant chairman, president and CEO DeVan Ard, Jr., said: “We are very excited about the proposed merger with Community Bank & Trust. Our companies share similar values, and our partnership will reinforce the foundation for an extraordinary financial services company that emphasizes service to our customers, employees and communities.
“The transaction meets all of our criteria for an acquisition, will be immediately accretive to earnings and provides a strong core deposit base. Community Bank & Trust also has excellent asset quality and the No. 1 deposit market share in a growing county in the Nashville MSA.
“The proposed acquisition adds four branches in Cheatham County, which is contiguous to our existing Nashville market, and expands our offices and market penetration in Robertson County, another strong market for Reliant.”
TCB shareholders will receive £13.8 in cash and 0.769 shares of Reliant for each TCB share
With the merger of TCB, Reliant will be the surviving company. As per the terms of the agreement, TCB shareholders will receive 0.769 shares of Reliant common stock and $17.13 (£13.8) in cash in exchange for each share of TCB common stock.
Reliant expects the deal to be about 10.5% and 12.5% accretive to earnings per common share in 2020 and 2021, respectively, and 5.3% dilutive to tangible book value per share at closing with an earnback period of less than three years.
The deal was unanimously approved by the boards of directors of Reliant, TCB Holdings and CB&T. The transaction is expected to be completed in the first quarter of next year, subject to regulatory approvals and approval from the shareholders of TCB.
CB&T president and CEO Debbie Small said: “We are proud to partner with Reliant Bank, and believe the merger is an excellent fit for our customers, employees, and shareholders.
“We believe this combination will better align our resources, enhance our financial strength, and expand our product offerings and technology solutions, all while allowing us to remain actively involved in our communities.”
